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SAN MIGUEL CORP., VS.

CA
G.R. NO. 146775, JAN. 30, 2002
Facts: On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District Office,
conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan
City. It was discovered that there was underpayment by SMC of regular Muslim holiday pay to its
employees. DOLE sent a copy of the inspection result to SMC and it was received by and explained to
its personnel officer Elena dela Puerta. SMC contested the findings and DOLE conducted summary
hearings on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof
that it was paying regular Muslim holiday pay to its employees. Hence, Alan M. Macaraya, Director IV of
DOLE Iligan District Office issued a compliance order, dated 17 December 1993, directing SMC to
consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees
holiday pay within thirty (30) days from the receipt of the order.
SMC appealed to the DOLE main office in Manila. However, the appeal was dismissed for lack of merit
and the order of Director Macaraya was affirmed. SMC went to SC for relief via a petition for certiorari,
which the Court referred to the Court of Appeals. The appellate court modified the order with regards
the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary. Its motion for
reconsideration having been denied for lack of merit, SMC filed a petition for certiorari before the SC
Issues:
1. Whether or not public respondents seriously erred and committed grave abuse of discretion
when they granted Muslim Holiday Pay to non-Muslim employees of SMC.
2. Whether or not SMC was not accorded with due process of law in the issuance of the
compliance order.
3. Whether or not regional director Macaraya, undersecretary Trajano and undersecretary Espanol
have jurisdiction in issuing the assailed compliance orders.
Ruling: The court ruled the issues in negative. Muslim holidays are provided under Articles 169 and 170,
Title I, Book V, of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws,
which states:
Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays:
a) ‘Amun Jadīd (New Year), which falls on the first day of the first lunar month of Muharram;
b) Maulid-un-Nabī (Birthday of the Prophet Muhammad), which falls on the twelfth day of the
third lunar month of Rabi-ul-Awwal;
c) Lailatul Isrā Wal Mi’rāj (Nocturnal Journey and Ascension of the Prophet Muhammad), which
falls on the twenty-seventh day of the seventh lunar month of Rajab;
d) ‘Īd-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of
Shawwal, commemorating the end of the fasting season; and
e) ‘Īd-ūl-Adhā (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of
Dhū’l-Hijja.
Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially
observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato,
Iligan, Marawi, Pagadian, and Zamboanga and in such other Muslim provinces and cities as may
hereafter be created; (2) Upon proclamation by the President of the Philippines, Muslim holidays may
also be officially observed in other provinces and cities.
The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which
provides:
Art. 94. Right to holiday pay. –
a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10) workers;

Thus. there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. In addition. In the case before us. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders." However. the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. Further. Section B of the Labor Code. 28 May 1993 and 4 and 5 October 1993. there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection. both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays. petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. agencies. Hence. categorically stated: Considering that all private corporations. Anent the allegation that petitioner was not accorded due process. Article 128. Macaraya. as amended by Republic Act No. In addition. and in cases where the relationship of employer-employee still exists. a series of summary hearings were conducted by DOLE on 19 November 1992. offices. . Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. On the question regarding the jurisdiction of the Regional Director Allan M. and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays. (b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary. Petitioner asserts that Article 3(3) of Presidential Decree No. In any case. Wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker’s faith or religion. SMC could not claim that it was not given an opportunity to defend itself. 7730. 1083 provides that "the provisions of this Code shall be applicable only to Muslims. the court finds that SMC was furnished a copy of the inspection order and it was received by and explained to its Personnel Officer.b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. the 1999 Handbook on Workers’ Statutory Benefits. the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. provides: Article 128. Visitorial and enforcement power. Indeed. the issue could be resolved even without documentary proofs.

without any deduction or qualification. Issue: Whether or not the respondent was illegally dismissed and thus entitled to payment of benefits provided by law. Labor Arbiter Rogelio P. there is an employer-employee relationship. petitioner made it plain that Lagrama was dismissed. The first involves an element of control and supervision over the manner the work is to be performed. (1) those whose time and performance is supervised by the employer. in accordance with the ruling in Bustamante v. The Bureau of Working Conditions 32 classifies workers paid by results into two groups. August 15. It declared that the dismissal illegal and order the payment of monetary benefits." ("You again urinated inside your work area. However. Legaspi directed the parties to file their position papers.TAN VS. This is of course in addition to the payment of bac kwages which. no more drawing. If a piece worker is supervised. The illegality of the act of dismissal constitutes discharge without just cause. 1998. by his refusal to give Lagrama work to do and ordering Lagrama to get out of his sight as the latter tried to explain his side. From now on. while illegality in the manner of dismissal is dismissal without due process. However. service incentive leave pay. 1988 to October 17. everytime he spoke. Ruling: The respondent was illegally dismissed and entitled to benefits." ("Don't say anything further. as in this case. In this case. 1998. the grant of separation pay in lieu of reinstatement is appropriate. wala nay drawing. such an employee is . Urinating in a work place other than the one designated for the purpose by the employer constitutes violation of reasonable regulations intended to promote a healthy environment under Art. making ad billboards and murals for the motion pictures shown at the Empress. while the second does not. He claimed that he was not the only one who entered the drawing area and that. Hence. Private respondent Leovigildo Lagrama is a painter. Get out.") When Lagrama asked what Tan was saying. 2002 Facts: Petitioner Rolando Tan is the president of Supreme Theater Corporation and the general manager of Crown and Empire Theaters in Butuan City. No. Supreme. Guikan karon. Here there is no evidence that Lagrama did urinate in a place other than a rest room in the premises of his work. leaving him with no other choice but to leave the premises. This provision has two aspects: (1) the legality of the act of dismissal.R. from September 1. I don't want you to draw anymore. Tan shouted "Gawas" ("Get out"). As no amicable settlement had been reached. Lagrama filed a complaint with the National Labor Relations Commission (NLRC) in Butuan City. and (2) those whose time and performance is unsupervised by the employer. LAGRAMA G. but the same must be shown by evidence. Tan appealed to the NLRC and reversing the decision of the Labor Arbiter. it was a minor infraction to warrant his dismissal. On October 17. The parties do not dispute this finding. that is. 151228. dismissal under the grounds provided for under Article 282 of the Labor Code and (2) the legality in the manner of dismissal. Gawas. Instead of ordering his reinstatement as provided in Art. He alleged that he had been illegally dismissed and sought reinvestigation and payment of 13th month pay. and damages. Dili ko gusto nga mo-drawing ka pa. namely. even if the charge was true. the Labor Arbiter found that the relationship between the employer and employee has been so strained that the latter's reinstatement would no longer serve any purpose. private respondent Lagrama was summoned by Tan and upbraided: "Nangihi na naman ka sulod sa imong drawinganan. Tan told him. NLRC should be computed from the time of Lagrama's dismissal up to the time of the finality of this decision. "Ayaw daghang estorya.") Lagrama denied the charge against him. salary differential. The Implementing Rules of the Labor Code provide that no worker shall be dismissed except for a just or authorized cause provided by law and after due process. 279 of the Labor Code. 282(1) of the Labor Code for purposes of terminating employment. and Crown Theaters for more than 10 years.

). (Here.m. the NLRC reversed the decision of the Labor Arbiter. such as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify. sick leave and vacation leave. capable of being expressed in terms of money whether fixed or ascertained on a time. according to the style of suits they made. They worked from 8:00 a. They deny that they abandoned their work. 1985. (Here. There are two categories of employees paid by results: (1) those whose time and performance are supervised by the employer.R. A piece-rate worker belongs to this category especially if he performs his work in the company premises. NLRC. 4 Petitioners belong to the first category. petitioners worked in the company’s premises from 8:00 a. Ruling: The petitioners are entitled to the minimum benefits provided by law. On January 17. separation pay. regardless of the time he spent in accomplishing such work. October 26. On appeal. daily. Payment by the piece is just a method of compensation and does not define the essence of the relations. Piece-rate payment is generally practiced in garment factories where work is done in the company premises. piece or commission basis. to 7:00 p. . In this case. 34 he is paid a fixed amount for work done.e. i. The NLRC held petitioners guilty of abandonment of work and accordingly dismissed their claims except that for 13th month pay. service incentive leave pay. NLRC 33 and Mark Roche International v. and attorney’s fees. Tailor Shop and/or Johnny Co on September 10. NLRC G.m. task. petitioners filed a complaint against private respondents for illegal dismissal and sought recovery of overtime pay.m. and (2) those whose time and performance are unsupervised. holiday pay. Issue: Whether or not the petitioners are entitled to the minimum benefits provided by law. There is no dispute that petitioners were employees of private respondents although they were paid not on the basis of time spent on the job but according to the quantity and the quality of work produced by them. Labor Arbiter found private respondents guilty of illegal dismissal and accordingly ordered them to pay petitioners’ claims. 1999 Facts: Petitioners Avelino Lambo and Vicente Belocura were employed as tailors by private respondents J. 111042.not entitled to service incentive leave pay since. Nor does the fact that petitioners are not covered by the SSS affect the employer-employee relationship. Petitioners allege that they were dismissed by private respondents as they were about to file a petition with the Department of Labor and Employment (DOLE) for the payment of benefits such as Social Security System (SSS) coverage.. while payment on pakyao and takay basis is commonly observed in the agricultural industry. As in the case of the other 100 employees of private respondents. premium pay on holiday and rest day. the employer’s control is over the result of the work. supervised employees. they were each given a daily pay of at least P64. 1989. The mere fact that they were paid on a piece-rate basis does not negate their status as regular employees of private respondents. LAMBO VS. respectively. Regardless of the number of pieces they finished in a day. As tailors. After hearing. daily. 1985 and March 3. The term "wage" is broadly defined in Art. petitioners were paid on a piece-work basis.00.m. including Sundays and holidays. Workers on pakyao and takay basis belong to this group. to 7:00 p.) Both classes of workers are paid per unit accomplished.C. 13th month pay. as pointed out in Makati Haberdashery v. private respondents exercised control over the work of petitioners. there is an element of control and supervision over the manner as to how the work is to be performed. 97 of the Labor Code as remuneration or earnings. including Sundays and holidays. No.

They deny that they abandoned their work. while payment on pakyao and takay basis is commonly observed in the agricultural industry. private respondents exercised control over the work of petitioners. In lieu of reinstatement. service incentive leave pay. to 7:00 p. according to the style of suits they made. A piece-rate worker belongs to this category especially if he performs his work in the company premises. with a fraction of at least six (6) months of service being considered as one (1) year. there is an element of control and supervision over the manner as to how the work is to be performed. Workers on pakyao and takay basis belong to this group. The Labor Arbiter correctly ordered private respondents to give separation pay. petitioners were paid on a piece-work basis. they were each given a daily pay of at least P64. i. Issue: Whether or not the petitioners are entitled to the minimum benefits provided by law. As tailors. supervised employees. On January 17. Petitioners allege that they were dismissed by private respondents as they were about to file a petition with the Department of Labor and Employment (DOLE) for the payment of benefits such as Social Security System (SSS) coverage. (Here. On appeal.As petitioners were illegally dismissed.m. Ruling: The petitioners are entitled to the minimum benefits provided by law. holiday pay and 13th month pay are in accordance with our finding that petitioners are regular employees.m. sick leave and vacation leave.) Both classes of workers are paid per unit accomplished. 1999 Facts: Petitioners Avelino Lambo and Vicente Belocura were employed as tailors by private respondents J.C. they are entitled to reinstatement with back wages. holiday pay. Piece-rate payment is generally practiced in garment factories where work is done in the company premises. October 26. respectively. As in the case of the other 100 employees of private respondents.R. separation pay should be awarded to petitioners at the rate of one month salary for every year of service. There are two categories of employees paid by results: (1) those whose time and performance are supervised by the employer.). Regardless of the number of pieces they finished in a day.m. and (2) those whose time and performance are unsupervised. 111042. In this case. LAMBO VS.m. (Here. Any award in excess of three years is null and void as to the excess. The Arbiter applied the rule in the Mercury Drug case. such as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify. Labor Arbiter found private respondents guilty of illegal dismissal and accordingly ordered them to pay petitioners’ claims. and attorney’s fees. The NLRC held petitioners guilty of abandonment of work and accordingly dismissed their claims except that for 13th month pay. the employer’s control is over the result of the work. according to which the recovery of back wages should be limited to three years without qualifications or deductions. so that reinstatement would now be impractical and hardly in the best interest of the parties. Tailor Shop and/or Johnny Co on September 10. petitioners worked in the company’s premises from 8:00 a. separation pay. 1989. .00. including Sundays and holidays. NLRC G. After hearing. 1985 and March 3. 1985. There is no dispute that petitioners were employees of private respondents although they were paid not on the basis of time spent on the job but according to the quantity and the quality of work produced by them. The awards for overtime pay. to 7:00 p.. premium pay on holiday and rest day. daily. the NLRC reversed the decision of the Labor Arbiter. including Sundays and holidays. petitioners filed a complaint against private respondents for illegal dismissal and sought recovery of overtime pay. although paid on a piece-rate basis. No. 13th month pay.e. 4 Petitioners belong to the first category. daily. Considerable time has elapsed since petitioners’ dismissal. They worked from 8:00 a.

As petitioners were illegally dismissed. Any award in excess of three years is null and void as to the excess. however. Petitioners interposed an appeal before NLRC. Feb. he got sick and was forced to apply for partial disability with the SSS. upon cessation of La Mallorca’s business operations. he was transferred to the petitioner R & E Transport. according to which the recovery of back wages should be limited to three years without qualifications or deductions. Latag asked the petitioner. Labor Arbiter rendered a decision in favour of Latag. Ruling: The Supreme Court ruled that the respondent is entitled to retirement benefits despite of the waiver of quitclaims. No. the CA committed no error when it ruled that the document was invalid and could not bar her from demanding the benefits legally due her husband. he reported back to work in September 1998 but was no longer allowed on account of his old age. 97 of the Labor Code as remuneration or earnings. piece or commission basis. are wary of schemes that frustrate workers' rights and benefits. Payment by the piece is just a method of compensation and does not define the essence of the relations. he was substituted by his wife. 155214. although paid on a piece-rate basis. who has served at least five . Upon recovery.The mere fact that they were paid on a piece-rate basis does not negate their status as regular employees of private respondents. which was then granted. In lieu of reinstatement.R. Nor does the fact that petitioners are not covered by the SSS affect the employer-employee relationship. task. Latag filed a case for payment of his retirement pay before the NLRC. 1961. Petitioner filed the quitclaim and motion to dismiss where the Labor Arbiter issued an order for Writ of Execution. they are entitled to reinstatement with back wages. The term "wage" is broadly defined in Art. Courts. As to the Quitclaim and Waiver signed by Respondent Latag. and look with disfavor upon quitclaims and waivers that bargain these away. Article 287 of the Labor Code. In January 1995. Inc. as amended by Republic Act No. The Labor Arbiter correctly ordered private respondents to give separation pay. Latag was credited with 14 years of service with R & E Transport. 1999. The awards for overtime pay. Appeal was dismissed for failure to post a cash or surety bond. R&E TRANSPORT VS. holiday pay and 13th month pay are in accordance with our finding that petitioners are regular employees. with a fraction of at least six (6) months of service being considered as one (1) year. 30 provides: Retirement. Upon Pedro Latag’s death on April 30. capable of being expressed in terms of money whether fixed or ascertained on a time. Pedro M. separation pay should be awarded to petitioners at the rate of one month salary for every year of service. This is not say that all quitclaims are invalid per se. through its administrative officer for his retirement pay pursuant to Republic Act 7641 but he was ignored. The Arbiter applied the rule in the Mercury Drug case. 13. so that reinstatement would now be impractical and hardly in the best interest of the parties. an employee upon reaching the age of sixty (60) years or more. 2004 Facts: Pedro Latag was a regular employee of La Mallorca Taxi since March 1. — In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment. Considerable time has elapsed since petitioners’ dismissal. LATAG G. as mandated by law. Issue:Whether or not Latag is entitled to retirement benefits considering she signed a waiver of quitclaim. 7641. However. Inc. Undisputably. the respondent Avelina Latag. but not beyond sixtyfive (65) years which is hereby declared the compulsory retirement age.

The Voluntary Arbitrator favored the Bisig ng Asian Transmission Labor Union (BATLU). Ruling: The Court dismissed the petition and ruled that petitioners should pay its employees “200% and not just 100% of their regular daily wages for the unworked April 9. his holiday pay. In the assailed decision. Despite the explanatory bulletin.(5) years in said establishment. CA. In this case. Hence. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested. the CA found that Pedro was earning an average of five hundred pesos (P500) per day. whether unworked. it is clear that the late Pedro M. which is a management prerogative. that is. the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day. Thus. opted to pay its daily paid employees only 100% of their basic pay on April 9. 425 SCRA 478 [2004] Facts: The Department of Labor and Employment (DOLE). hence. Issue: Whether or not daily-paid employees are entitled to be paid for two regular holidays which fall on the same day.] apart from being Good Friday [and. namely. We thus compute his retirement pay as follows: P500 x 15 days x 14 years of service equals P105. may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. when April 9. 1998 which covers two regular holidays. although the worker is forced to take a rest. Trajano. regardless of whether an employee is paid on a monthly or daily basis. Since Pedro was paid according to the "boundary" system. a legal holiday]. 1993 wherein it clarified. is also Araw ng Kagitingan [which is also a legal holiday]. Araw ng Kagitingan and Maundy Thursday. Unless the parties provide for broader inclusions. therefore. . petitioner. a fraction of at least six (6) months being considered as one whole year. he earns what he should earn. Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. Asian Transmission Corporation. but retain only those sums in excess of the "boundary" or fee they pay to the owners or operators of their vehicles. 1998. 1998. holiday pay is a statutory benefit demandable under the law. which[. the term one halfmonth salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. the basis for computing their benefits should be the average daily income. his retirement pay should be computed on the sole basis of his salary. Said bulletin was reproduced on January 23. 1998 was both Maundy Thursday and Araw ng Kagitingan.” Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. issued an Explanatory Bulletin dated March 11. he is not entitled to the 13th month 32 and the service incentive pay. Latag is entitled to retirement benefits. In other words. 1993. through Undersecretary Cresenciano B. inter alia. the Court of Appeals upheld the findings of the Voluntary Arbitrator. Unlike a bonus." The provision is mandatory. like on April 9. It is accepted that taxi drivers do not receive fixed wages. and held that Article 94 of the Labor Code provides for holiday pay for every regular holiday. The rules implementing the New Retirement Law similarly provide the above-mentioned formula for computing the one-half month salary. that employees are entitled to 200% of their basic wage on April 9.000. ASIAN TRANSMISSION VS. 1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday.

Nueva Vizcaya. it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable certainty. Isabela. (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.50. After a month. on a twice a month basis. A careful examination of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. although he had not slept for almost twenty-four (24) hours. Rule V.. seven percent (7%) of the total gross income per travel. Isabela. Moreover. representing thirty percent (30%) of the cost of repair of the damaged buses and that despite respondent's pleas for reconsideration. Rather. while respondent was driving Autobus No." applying the rule on ejusdem . as he had just arrived in Manila from Roxas. Labor Arbiter decided that the complaint be dismissed where the respondent must pay to the complainant Issue:Whether or not respondent is entitled to service incentive leave. the same was ignored by management. the bus he was driving accidentally bumped the rear portion of Autobus No. On 29 September 2000." The phrase "other employees whose performance is unsupervised by the employer" must not be understood as a separate classification of employees to which service incentive leave shall not be granted. 2005 Facts:Respondent Antonio Bautista has been employed by petitioner Auto Bus Transport Systems. 124. Thus. 156364. based on the pleadings and supporting evidence presented by the parties. Respondent was paid on commission basis. as driver-conductor with travel routes Manila-Tuguegarao via Baguio. BaguioTuguegarao via Manila and Manila-Tabuk via Baguio. or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof. 114 along Sta. Respondent further alleged that he was not allowed to work until he fully paid the amount of P75." The same is true with respect to the phrase "those who are engaged on task or contract basis." Said phrase should be related with "field personnel. The disposition of the issue revolves around the proper interpretation of Article 95 of the Labor Code vis-à-vis Section 1(D). Inc. Rule V: SERVICE INCENTIVE LEAVE also states that this rule shall apply to all employees except: (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis. on 02 February 2000. purely commission basis. as the latter vehicle suddenly stopped at a sharp curve without giving any warning. Book III of the Implementing Rules and Regulations of the Labor Code which provides: RIGHT TO SERVICE INCENTIVE LEAVE. On January 2000. management sent him a letter of termination. No.R. According to the Implementing Rules. purely commission basis. BAUTISTA G. Respondent averred that the accident happened because he was compelled by the management to go back to Roxas. Fe. Book III. respondent instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leave pay against Autobus. May 16.551.AUTOBUS TRANSPORT SYSTEM VS. Service Incentive Leave shall not apply to employees classified as "field personnel. since May 1995. Ruling:The respondent is entitled to service incentive leave.

an employee who has served for one year is entitled to it. This definition is further elaborated in the Bureau of Working Conditions (BWC). On March 13. Rule V. On March 9." In other words. field personnel are those whose performance of their job/service is not supervised by the employer or his representative. 2000. VS. including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy. The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments. petitioner informed respondent that her probationary employment will be severed at the close of the business hours of March 12. "field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. He may use it as leave days or he may collect its monetary value. Section 2. Dec. What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to respondent is whether or not he is field personnel? According to Article 82 of the Labor Code. In so doing. Thus. respondent is entitled to the grant of service incentive leave. it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. in order to conclude whether an employee is a field employee.. Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association 10 which states that: As a general rule. 2001. At this point. 2001. As discussed above. 168194. unless. No. To limit the award to three years. is less than 12 months. Accordingly.R. 13. DEL ROSARIO G. an inquiry must be made as to whether or not the employee's time and performance are constantly supervised by the employer. field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave. hence. as the solicitor general recommends. in which case said period shall be considered as one year. is to unduly restrict such right. employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee." Service incentive leave is a right which accrues to every employee who has served "within 12 months. it is necessary to stress that the definition of a "field personnel" is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee's performance is unsupervised by the employer. respondent was refused entry to ." It is also "commutable to its money equivalent if not used or exhausted at the end of the year.generis that the general and unlimited terms are restrained and limited by the particular terms that they follow. 2005 Facts: On April 17. 2001. Hence. they fall under the classification of field personnel. the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty. subject to a few exceptions. whether continuous or broken reckoned from the date the employee started working. If required to be at specific places at specific times. SAN MIGUEL CORP. they are paid specific amount for rendering specific service or performing specific work. Respondent is not a field personnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner's business. respondent was employed by petitioner as key account specialist. or that provided in the employment contracts. Book III of the Implementing Rules and Regulations provides that "every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

decreased volume of business. 2001. i. like the present controversy. 2000. Neither will petitioner’s belated claim that respondent became a probationary employee starting October 1. At any rate. Succinctly put. 2000 to March 12. 2000. provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. the continuous employment of respondent as an account specialist for almost 11 months. 2000 to September 3. In termination cases. On June 24. Redundancy. and superfluity of a position or positions may be the outcome of a number of factors. Hence. And while it is true that by way of exception. feasibility studies/proposal. The following evidence may be proffered to substantiate redundancy: the new staffing pattern. Regarding the argument of redundancy.e. therefore. Ruling: Affirmative. 2002. As earlier stated. Hence. The determination that the employee’s services are no longer necessary or sustainable and. 2000 work against respondent. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. since it was shown that he was terminated four days after the 6th month of his purported probationary employment. is only temporary. it is not enough for a company to merely declare that it has become overmanned. or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. properly terminable is an exercise of business judgment of the employer. the contract of employment in the instant case. Moreover. which appears to be an oral agreement since no written form was presented by petitioner. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC. having been presented. or when it is required by the nature of the work. such as when the same is established by company policy. six months and eight days to be precise. for purposes of the Labor Code. a position is redundant where it is superfluous.petitioner’s premises. respondent filed a complaint against petitioner for illegal dismissal and underpayment/non-payment of monetary benefits. on the viability of the newly created positions. A worker was found to be a regular employee notwithstanding the presentation by the employer of a Payroll Authority indicating that said employee was hired on probation. the burden of proving the circumstances that would justify the employee’s dismissal rests with the employer. all doubts must be resolved in favor of labor. exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. The best proof that petitioner should have presented to prove the probationary status of respondent is her employment contract. . the period of probationary employment may exceed six months when the parties so agree. job description and the approval by the management of the restructuring. such as overhiring of workers. her alleged probationary employment already exceeded six months. should be construed as one vesting respondent with a regular status and security of tenure. None. and that the reckoning period of her probationary employment is September 4. the payroll authorities indicating that respondent’s probationary status became effective as of such date are of scant evidentiary value since it does not show the conformity of respondent. none of these exceptional circumstance were proven in the present case. 2001.. respondent whose employment exceeded six months is undoubtedly a regular employee of petitioner. in the interpretation of employment contracts. whether oral or written. means that she was a regular employee and not a temporary reliever or a probationary employee. In other words. Issue: Whether or not respondent is a regular employee of petitioner. even assuming that the employment of respondent from April 7. from April 17. she should still be declared a regular employee because by the time she was dismissed on March 12.

These documents. BAGANGA PLYWOOD CORP. e. and (c) seniority. Section 8. May 3. are in the possession of employers. a maximum of 10% of the total monetary award by way of attorney’s fees is justifiable under Article 111 of the Labor Code. In balancing the interest between labor and capital. do not satisfy the requirement of substantial evidence that a reasonable mind might accept as adequate to support a conclusion. . resulting in the dismissal of the latter. No. up to her actual reinstatement. Verily. in the implementation thereof. especially so because in most cases. petitioner erroneously classified respondent as a probationary employee. Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance of its steam plant boiler. shall be presumed to be paid for all the days in the month whether worked or not. 2006 Facts: Sometime in June 1999. There need only be a showing that the lawful wages were not paid accordingly. irrespective of the number of working days therein. both render invalid the redundancy because both have the ultimate effect of illegally dismissing an employee.. Under Section 2. Book III of its Implementing Rules. A contrary ruling would encourage employers to prevent the regularization of an employee by simply invoking a feigned or unsubstantiated redundancy program. Moreover. Respondent is not. is highlighted by the non-presentation by petitioner of the required notice to the DOLE and to the separated employees. petitioner presented an affidavit of its Sales Manager and a memorandum of the company both to the effect that there is a need to redeploy its regular employees and terminate the employment of temporary employees. entitled to holiday pay because the records reveal that she is a monthly paid regular employee. in actions for recovery of wages or where an employee was forced to litigate and thus incurred expenses to protect his rights and interests. these notices and the proof of payment of separation pay to the dismissed regular employees should have been offered to establish that there was excess manpower in petitioner’s GMA-KAG caused by a decline in the sales volume. the absence of criteria and the erroneous implementation of the criterion selected. The award of attorney’s fees is proper and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. the prudent recourse in termination cases is to safeguard the prized security of tenure of employees and to require employers to present the best evidence obtainable.R. however. If there was indeed a valid redundancy effected by petitioner. 2000. temporary employee. Article 2208 of the Civil Code. the documents or proof needed to resolve the validity of the termination. the lingering doubt as to the existence of redundancy or of petitioner’s so called “restructuring. as in the instant controversy. PENARANDA VS. in view of an excess in manpower. however. G. it nevertheless. The criteria in implementing a redundancy are: (a) less preferred status.. Rule VIII.e. Granting that petitioner was able to substantiate the validity of its reorganization or restructuring. failed to effect a fair and reasonable criterion in dismissing respondent. service incentive leave pay and 13th month pay computed from such date also up to her actual reinstatement. and paragraph 7. 159577. Book III of the Omnibus Rules Implementing the Labor Code. Anent attorney’s fees. employees who are uniformly paid by the month. 2001. realignment or reorganization” which resulted in the dismissal of not only probationary employees but also of regular employees. i.g. However. computed from the time her compensation was actually withheld from her on March 13. It is evident from the foregoing that the criterion allegedly used by petitioner in reorganizing its sales unit was the employment status of the employee. Rule IV. she is likewise entitled to other benefits. Considering that respondent was illegally dismissed. As a regular employee of petitioner from the date of her employment on April 17.In the case at bar. (b) efficiency. she is entitled not only to reinstatement but also to payment of full back wages.

The Court disagrees with the NLRC's finding that petitioner was a managerial employee. Customarily and regularly exercise discretion and independent judgment. 3. common employee entitled to monetary benefits under Art. premium pay for working during holidays/rest days. After the parties failed to settle amicably. And due to the insistence of herein complainant he was paid his separation benefits. However. The Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and responsibilities: 1. when respondent BPC partially reopened in January 2001. to shut down and to dismiss employees." The petitioner’s work involves: 1. The labor arbiter ruled that there was no illegal dismissal and that petitioner's Complaint was premature because he was still employed by BPC. he was not paid his overtime pay. he alleges that his services were terminated without the benefit of due process and valid grounds in accordance with law. or knowledge. Hudson Chua.In May 2001. Respondents allege that complainant's separation from service was done pursuant to Art. (2). which also takes him out of the coverage of labor standards. the labor arbiter directed the parties to file their position papers and submit supporting documents. Ruling: The petitioner is not entitled to overtime pay and other monetary benefits. and (3) above. Regional Office No. 2000. officers and member of the managerial staff are not entitled to the provisions of law on labor standards. or (ii) execute under general supervision work along specialized or technical lines requiring special training. XI. the individual respondent. Respondent BPC is a domestic corporation duly organized and existing under Philippine laws and is represented herein by its General Manager HUDSON CHUA. before the NLRC. 2. . Peñaranda alleges that he was employed by respondent Banganga on March 15. Furthermore. The respondent BPC was on temporary closure due to repair and general maintenance and it applied for clearance with the Department of Labor and Employment. or (iii) execute under general supervision special assignments and tasks. sick and vacation leave conversions and thirteenth month pay. Consequently. petitioner was a member of the managerial staff. experience. night shift differentials and finally claimed for payment of damages and attorney's fees having been forced to litigate the present complaint.00 as Foreman/Boiler Head/Shift Engineer until he was illegally terminated on December 19. Who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1). 1999 with a monthly salary of P5. Petitioner’s money claims for illegal dismissal was also weakened by his quitclaim and admission during the clarificatory conference that he accepted separation benefits. Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof.000. Issue: Whether or not Peñaranda is a regular. 283 of the Labor Code. To supply the required and continuous steam to all consuming units at minimum cost. The primary duty consists of the performance of work directly related to management policies of the employer. 82 of the Labor Code and is entitled to the payment of overtime pay and other monetary benefits. and 4. Like managerial employees. Peñaranda failed to reapply. Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its general manager.

Petitioner supervised the engineering section of the steam plant boiler. 8. 6. 9. particularly items. Recommend parts and suppliers purchases. This work necessarily required the use of discretion and independent judgment to ensure the proper functioning of the steam plant boiler. 3. 10. .2. To supervise. even petitioner admitted that he was a supervisor. In his Position Paper. 1." 34 The foregoing enumeration. The term foreman implies that he was the representative of management over the workers and the operation of the department. His classification as supervisors is further evident from the manner his salary was paid. he stated that he was the foreman responsible for the operation of the boiler. To evaluate performance of machinery and manpower. Petitioner's evidence also showed that he was the supervisor of the steam plant. 4. 5 and 7 illustrates that petitioner was a member of the managerial staff. feedwater and softener. or disciplinary action. 3. He belonged to the 10% of respondent's 354 employees who were paid on a monthly basis. petitioner is deemed a member of the managerial staff. To recommend personnel actions such as: promotion. the others were paid only on a daily basis. 5. Implement Chemical Dosing. 2. To train new employees for effective and safety white working. check and monitor manpower workmanship as well as operation of boiler and accessories. Perform other task as required by the superior from time to time. His work involved overseeing the operation of the machines and the performance of the workers in the engineering section. acEHSI 7. As supervisor. To check water from the boiler. Noteworthy. To follow-up supply of waste and other materials for fuel. regenerate softener if beyond hardness limit. His duties and responsibilities conform to the definition of a member of a managerial staff under the Implementing Rules.

including regular and special holidays. 2000. through its Regional Vice-President. Considering that petitioner used the 360-day divisor. Trajano. It was also applied in Odango v. LEYECO IV EMPLOYEES UNION-ALU. sent a letter to petitioner demanding holiday pay for all employees. June 10. the 51 un-worked Sundays and the 51 un-worked Saturdays. citing Wellington Investment vs. 245 SCRA 561 [1995]. Held: Leyte IV Electric Cooperative is not liable for underpayment of holiday pay. as provided for in the CBA. Such literal interpretation ignores the admission of respondent in its Position Paper that the employees were paid all the days of the month even if not worked. petitioner's employees are being given their holiday pay. NLRC. G. as well as days when no work was done by reason of fortuitous cause. The monthly salary thus fixed actually covered payment for 314 days of the year. which is clearly above the minimum. the employees were required to work only from Monday to Friday and half of Saturday. 314. Issue: Whether or not Leyte IV Electric Cooperative is liable for underpayment of holiday pay. In granting respondent's claim of non-payment of holiday pay. which is the result of 365 days. G. which is arrived at by deducting 51 un-worked Sundays and 51 un-worked Saturdays from 365 days. Leyte IV Electric Cooperative. petitioner's submission of its 360 divisor in the computation of employees' salaries gains significance. In light of such admission. the days when no work is done. This ruling was applied in Wellington Investment and Manufacturing Corporation v. In fixing the salary. it simply deducted 51 Sundays from the 365 days normally comprising a year and used the difference. insisted payment of the holiday pay in compliance with the CBA provisions. that is. stating that payment was presumed since the formula used in determining the daily rate of pay of the covered employees is Basic Monthly Salary divided by 30 days or Basic Monthly Salary multiplied by 12 divided by 360 days. Thus. Trajano. the Voluntary Arbitrator should not have simply brushed aside petitioner's divisor formula. October 19. 147420. 2007. Thus. 43 Producers Bank of the Philippines v. thus with said formula.LEYTE IV ELECTRIC COOPERATIVE INC VS. In said case. Casilan. . Inc. 1577745. In this case. a "double burden" was imposed upon petitioner because it was being made to pay twice for its employees' holiday pay when payment thereof had already been included in the computation of their monthly salaries. in its Position Paper. No. Vicente P. where Court ruled that the use of a divisor that was less than 365 days cannot make the employer automatically liable for underpayment of holiday pay. (petitioner) and Leyeco IV Employees UnionALU (respondent) entered into a Collective Bargaining Agreement (CBA) covering petitioner rank-andfile employees. riot. and Odango vs. less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). the employees are required to work only from Monday to Friday. respondent. the minimum allowable divisor is 263. such as transportation strike. Thus. On June 7.R. indubitably. the minimum allowable divisor is 287. or cause not attributable to the employees. or typhoon or other natural calamity. Any divisor below 287 days meant that the employees were deprived of their holiday pay for some or all of the ten legal holidays. No.The Voluntary Arbitrator gravely abused its discretion in giving a strict or literal interpretation of the CBA provisions that the holiday pay be reflected in the payroll slips. In this case. 2004 Facts: On April 6. National Labor Relations Commission. Wellington used what it called the "314 factor". the monthly salary was fixed by Wellington to provide for compensation for every working day of the year including the holidays specified by law — and excluding only Sundays. for a period of five (5) years effective January 1.Petitioner. 1998. as basis for determining the monthly salary.R. on the other hand. 1998. the employees are already paid their regular and special days. National Labor Relations Commission. The 304-day divisor used by the employer was clearly above the minimum of 287 days.

Aside from underpayment. herein petitioner. on March 9. respondent was dismissed from service on the strength of an unsigned and undated notice of dismissal. respondent filed a complaint for illegal dismissal and other monetary claims. About four months into his employment. or on February 15. which was stipulated in his contract. 1997. who likewise conducted an inquisitorial hearing to investigate the incident on March 8. 162195.BAHIA SHIPPING SERVICES VS. NLRC. on board the cruise ship. as a restaurant waiter on board the M/S Black Watch . herein respondent. Due to the incident. Petitioner’s contention that there is no factual or legal basis for the inclusion of said amount since respondent‘s repatriation is well-taken. 195 SCRA 533 [1998] Facts: Reynaldo Chua. 1997. National Labor Relations Commission. England. was under the employ of Bahia Shipping Services. 1996 for a period of nine (9) months from October 18. The Court ruled in Cagampan v. since he was only paid US$300. 1996 to July 17. 1997. 2008. 17.00 per month. 1997. Attached to the dismissal notice is the alleged minutes or records of the investigation and hearing. 2002.00 per month was also deducted from his salary by petitioner for union dues. responded reported to work an hour and a half (1 ½) late. 2010 Facts: Petitioner PNCC Skyway Corporation Traffic Management and Security Division Workers' Organization (PSTMSDWO) is a labor union duly registered with the Department of Labor and Employment (DOLE). petitioner and respondent entered into a Collective Bargaining Agreement (CBA) incorporating the terms and conditions of their agreement which included vacation leave and expenses for security license provisions. respondent was issued a warning-termination form by the master of the cruise ship. G. PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS ORGANIZATION. that although an overseas employment contract may guarantee the right to overtime pay.00 per month for a period of five (5) months. His employment is pursuant to a Philippine Overseas Employment Administration (POEA) approved employment contract dated October 9. Inc. He claims that he was underpaid in the amount of US$110. A memorandum was passed by the respondents scheduling the leaves of the laborers. Respondent PNCC Skyway Corporation is a corporation duly organized and operating under and by virtue of the laws of the Philippines.. respondent argued that Article . GR No. otherwise the same cannot be allowed. On March 24. Thereafter. On October 18. left Manila for Heathrow. Thor Fleten on February 17. instead of US$410. a luxury cruise ship liner. Issue: In the computation of the award. April 8. citing Cagampan vs. CHUA.R. Feb. On November 15. 1997. 1996. Petitioner objected to the implementation of this memorandum and contended that their union members have the preference in scheduling their vacation leave. 171231. No. he alleged that US$20. respondent. On the other hand.00 per month. entitlement to such benefit must first be established. 1997. should the “guaranteed overtime” pay per month be included as part of his salary? Ruling: There is no factual or legal basis in the inclusion of his "guaranteed overtime" pay into his monthly salary computation for the entire unexpired period of his contract.

1977 and June 1.00 for Ybarola and P 40.00 for Rivera.250. they were given their separation pay – P 631. they executed release/quitclaim affidavits. They belied the respondents’ claimed salary rates. Stated differently. Issue: Whether or not it is the prerogative of PNCC to schedule leaves of its employees. the respondents filed separate complaints (which were later consolidated) against RMN and its President. Article VIII. Jr. YBAROLA Facts: Respondents Domingo Z. as shown by the payrolls. In fine.00. as a general rule. and Alfonso E. its meaning should be determined without reference to extrinsic facts or aids. as attested to by the release/quitclaim affidavits which they executed freely and voluntarily. Rivera.55 for Rivera. where the language of a written contract is clear and unambiguous. but the same is not controlling. RADIO MINDANAO NETWORK. it purports to mean. were hired on June 15. being the law between the parties. the contract must be taken to mean that which. The respondents’ services were terminated as a result of RMN’s reorganization/restructuring. while they admitted that they signed release documents.250. The preference requested by the employees is not controlling because respondent retains its power and prerogative to consider or to ignore said request. They eventually became account managers. for illegal dismissal with several money claims. Canoy. Dissatisfied with their separation pay. the contested provision of the CBA is clear and unequivocal. The rule is that where the language of a contract is plain and unambiguous.000. Ruling: Yes. The intention of the parties must be gathered from that language.VIII. respectively. and from that language alone. The petitioners denied liability.00 for Ybarola and P 429. Jr. Section 1 (b) of the CBA categorically provides that the scheduling of vacation leave shall be under the option of the employer. but ordered the payment of additional separation pay to the respondents – P 490. On appeal by the petitioners to the National Labor Relations Commission (NLRC). by RMN. unless some good reason can be assigned to show that the words used should be understood in a different sense. commissions cannot be included in the base figure for the computation of the separation pay because . INC.00 for Ybarola. Ybarola. Eric S. In the case at bar.517. The respondents argued that the release/quitclaim they executed should not be a bar to the recovery of the full benefits due them. 1983. they did so due to dire necessity. Respondent may take into consideration the employees' preferred schedule. VS. They indicated that their monthly salary rates were P 60. Thus. the CBA must be strictly adhered to and respected if its ends have to be achieved. It ruled that the withholding tax certificate cannot be the basis of the computation of the respondents’ separation pay as the tax document included the respondents’ cost-of-living allowance and commissions.00 for Rivera.066. Sometime in December 2002.000. alleging that they each received a monthly salary of P 9. if the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties. Section 1 (b) gives the management the final say regarding the vacation leave schedule of its employees. including attorney’s fees.177. and P 481. the literal meaning of its stipulation shall prevail. The Labor Arbiter Patricio Libo-on dismissed the illegal dismissal complaint. contending that the amounts the respondents received represented a fair and reasonable settlement of their claims. the NLRC set aside the labor arbiter’s decision and dismissed the complaint for lack of merit. on its face. soliciting advertisements and servicing various clients of RMN.

it was their dire circumstances and inability to support their families that finally drove them to accept the amount offered. they were given only half of the amount they were legally entitled to. No.00 for each of them. were part of their salary. It reinstated the labor arbiter’s separation pay award. 2012. it was their dire circumstances and inability to support their families that finally drove them to accept the amount the petitioners offered. September 12. 198662. the separation pay the respondents received was deficient by at least P 400. Radio Mindanao Network. but were eventually forced to sign given their circumstances. Issue:Whether or not the release/quitclaim affidavits are invalid for being against public policy. The CA granted the petition and set aside the assailed NLRC dispositions.R. and (2) the absence of voluntariness when the employees signed the document. the respondents earned their commissions through actual market transactions attributable to them. Domingo Z. and Eric S. et al. Significantly. To be sure. The release/quitclaim affidavits are invalid for being against public policy for two reasons: (1) the terms of the settlement are unconscionable. and (2) the absence of voluntariness when the respondents signed the document. G.000. they dallied and it took them three months to sign the release/quitclaim affidavits. they dallied in executing the quitclaim instrument. Separation pay. Ybarola.000. given especially the respondent’s length of service – 25 years for Ybarola and 19 years for Rivera. therefore. Canoy vs. Without jobs and with families to support. citing two reasons: (1) the terms of the settlement are unconscionable. The appellate court declared the release/quitclaim affidavits executed by the respondents invalid for being against public policy.they have to be earned by actual market transactions attributable to the respondents From the NLRC. a settlement under these terms is not and cannot be a reasonable one. Ruling: Release/Quitclaim. the separation pay for termination due to reorganization/restructuring was deficient by Php400. rejecting the NLRC’s ruling that the respondents’ commissions are not included in the computation of their separation pay. these commissions. Inc. . the respondents sought relief from the CA through a petition for certiorari under Rule 65 of the Rules of Court.00 for each employee. It pointed out that in the present case.