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National Waterworks and Sewerage Authority v NWSA Consolidated Unions, Et

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Date: August 31, 1964
Ponente: Bautista Angelo


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Facts:
NWSA (P) is a GOCC governed by RA 1383. NWSA Consolidated Unions (R) are
various labor organizations composed of laborers and employees of the NAWASA.
The intervenors are Centeno, et. al.
CIR conducted a hearing regarding the controversy between NWSA and NWSA
Consolidated Unions on the following:
Implementation of the 40-Hour Week Law (RA 1880); alleged violations of the
collective bargaining agreement dated December 28, 1956 concerning "distress pay";
minimum wage of P5.25; promotional appointments and filling of vacancies of newly
created positions; additional compensation for night work; wage increases to some
laborers and employees; and strike duration pay.
NWSA Consolidated Unions also raised the issue of whether the 25% additional
compensation for Sunday work should be included in computing the daily wage and
whether, in determining the daily wage of a monthly-salaried employee, the salary
should be divided by 30 days.
Intervenors’ issues: Additional compensation for night work and new demand for
overtime pay in favor of Jesus Centeno, Cesar Cabrera, Feliciano Duiguan, Cecilio
Remotigue, and other employees receiving P4,200.00 per annum or more.
Respondent Court ruled as follows:
The NAWASA is an agency not performing governmental functions and, therefore, is
liable to pay additional compensation for work on Sundays and legal holidays
conformably to Commonwealth Act No. 444, known as the Eight-Hour Labor Law,
even if said days should be within the staggered five work days authorized by the
President.
The intervenors do not fall within the category of "managerial employees" as
contemplated in Republic Act 2377 and so are not exempt from the coverage of the
Eight-Hour Labor Law.
Those intervenors attached to the General Auditing Office and the Bureau of Public
Works come within the purview of Commonwealth Act No. 444.
The computation followed by NAWASA in computing overtime compensation is
contrary to Commonwealth Act 444.
The undertime of a worker should not be set-off against the worker in determining
whether the latter has rendered service in excess of eight hours for that day.
In computing the daily wage of those employed on daily basis, the additional 25%
compensation for Sunday work should be included.
The computation used by the NAWASA for monthly salaried employees to wit,
dividing the monthly basic pay by 30 is erroneous.
The minimum wage awarded by respondent court way back on November 25, 1950 in
Case No. 359-V entitled MWD Workers Union v. Metropolitan Water District, applies
even to those who were employed long after the promulgation of the award and even
if their workers are hired only as temporary, emergency and casual workers for a
definite period and for a particular project.
The authority granted to NAWASA by the President to stagger the working days of its
workers should be limited exclusively to those specified in the authorization and
should not be extended to others who are not therein specified.

10. Under the collective bargaining agreement entered into between the NAWASA and
respondent unions on December 28, 1956, as well as under Resolution No. 29, series
of 1957 of the Grievance Committee, even those who work outside the sewerage
chambers should be paid 25% additional compensation as "distress pay."
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Issues, Held & Ratio:
I: WON NAWASA is performing governmental functions and, therefore, essentially a
service agency of the government
H: No. NAWASA, though a public corporation, does not perform governmental
functions. It performs proprietary functions, and hence, it is covered by
Commonwealth Act No. 444.
The National Waterworks and Sewerage Authority was not created for purposes of
local government. It was created for the "purpose of consolidating and centralizing all
waterworks, sewerage and drainage system in the Philippines under one control and
direction and general supervision."
Its functions are but mere ministrant functions of government which are aimed at
advancing the general interest of society.
I: WON NAWASA is a public utility and, therefore, exempted from paying additional
compensation for work on Sundays and legal holidays
H: NAWASA is a public utility. Although pursuant to Section 4 of Commonwealth Act
444 it is not obliged to pay an additional sum of 25% to its laborers for work done on
Sundays and legal holidays, YET IT MUST PAY said additional compensation by
virtue of the contractual obligation it assumed under the collective bargaining
agreement.
NAWASA is a public utility because its primary function is to construct, maintain and
operate water reservoirs and waterworks for the purpose of supplying water to the
inhabitants, as well as consolidate and centralize all water supplies and drainage
systems in the Philippines.
While under Commonwealth Act No. 444 a public utility is not required to pay
additional compensation to its employees and workers for work done on Sundays and
legal holidays, there is, however, no prohibition for it to pay such additional
compensation if it voluntarily agrees to do so. NAWASA committed itself to pay this
additional compensation. It must pay not because of compulsion of law but because
of contractual obligation. In the collective bargaining agreement entered into between
the NAWASA and respondent unions it was agreed that all existing benefits enjoyed
by the employees and laborers prior to its effectivity shall remain in force and shall
form part of the agreement, among which certainly is the 25% additional
compensation for work on Sundays and legal holidays therefore enjoyed by said
laborers and employees.
I: WON the intervenors are "managerial employees" within the meaning of Republic
Act 2377 and, therefore, not entitled to the benefits of Commonwealth Act No. 444, as
amended
H: No. The intervenors are not "managerial employees" as defined in Republic Act
No. 2377, hence they are covered by Commonwealth Act No. 444 (Eight Hour Labor
Law), as amended.
Discussion on Managerial Employees:
Section 2, RA 2377: This Act shall apply to all persons employed in any industry or
occupation, whether public or private with the exception of farm laborers, laborers
who prefer to be paid on piece work basis, managerial employees, outside sales
personnel, domestic servants, persons in the personal service of another and
members of the family of the employer working for him. The term "managerial

after examining carefully their respective functions. Precedent: National Marketing Corporation. The Court of Industrial Relations has jurisdiction to adjudicate overtime pay in the case at bar there being an employer-employee relationship existing between intervenors and petitioner. especially in a firm which is a public utility? H: In the computation of the daily wages of employees paid by the month distinction should be made between government employees like the GAO employees and those who are not. Respondent court. and many other chiefs of divisions or sections and others are supervisors and overseers.  employee" in this Act shall mean either (a) any person whose primary duty consists of the management of the establishment in which he is employed or of a customarily recognized department or subdivision thereof. They are employees of the national government and are not covered by the Eight-Hour Labor Law. WON the undertime for that day should be set off H: No. 6. the intervenors are required to observe working hours and record their time work and are not free to come and go to their offices.   5. This is so even if petitioner is a public utility in view of the contractual obligation it has assumed on the matter. 444. or (b) ally officer or member of the managerial staff. Court of Industrial Relations which ruled that members of audition force are not employees of now defunct PRISCO but of the Auditor General. Into as many parts as there are days in the particular month) while for others the correct computation is the monthly salary divided by the actual number of working hours in the month or the regular monthly compensation divided by the number of working days in the month. WON the additional compensation for Sunday work should be included H: Yes. it is clear that the matter subject of intervention comes within the jurisdiction of respondent court. Another is a public relations officer. The computation for government employees is governed by Section 254 of the Revised Administrative Code (i. The proper method should be to deduct the undertime from the accrued leave but pay the employee the overtime to which he is entitled. It happens that many months or years are allowed to pass by before he could be made to present such claim against his employer. One of them is the Secretary of the Board of Directors. as amended H: The GAO employees assigned to work in the NAWASA cannot be regarded as employees of the NAWASA on matters relating to compensation. 9. The Court of Industrial Relations did not err in ordering the payment of night compensation from the time such services were rendered. as their main function is merely to carry out the company's orders. it was correctly included in computing the weekly wages of those employees and laborers who worked seven days a week and were regularly receiving the 25% salary differential for a period of three months prior to the implementation of Republic Act 1880. The laborer must be compensated for nighttime work as of the date the same was rendered. The chiefs of divisions and sections are given ready policies to execute and standard practices to observe for their execution. v. et al. The true worth of his service does not depend so much on the time he spends in office but more on the results he accomplishes.  It is of common occurrence that a working man who has already rendered night time service takes him a long time before he can muster enough courage to confront his employer with the demand for payment for it for fear of possible reprisal. whether the same can be made retroactive and cover a period prior to the promulgation of the award H: Yes. In fact. The differential pay for Sundays is a part of the legal wage. whether hired as temporary. he is free to go out of office anytime. or perform work related to management policies or general business operations along specialized or technical lines. the one who appointed and supervised them. 359-V) applies to those employed long after the promulgation thereof. o   4. The intervenors are holding position of responsibility. I: Considering that the payment of night compensation is not by virtue of any statutory provision but emanates only from an award of respondent Court of Industrial Relations. Hence. SC has held time and again that disputes that call for the application of the 8-Hour Labor Law are within the jurisdiction of the Court of Industrial Relations if they arise while the employer-employee relationship still exists. I: In determining whether one has worked in excess of eight hours. emergency and casual workers for a definite period and for a specific project . in making payments for part of a month. For these workers it is not feasible to provide a fixed hourly rate of pay or maximum hours of labor. 7. however. and so it is neither fair nor just that he be deprived of what is due him simply because of his silence for fear of losing the means of his livelihood. Another is the private secretary of the general manager.e. duties and responsibilities found that their primary duties do not bear any direct relation with the management of the NAWASA. I: WON minimum wage fixed and awarded by respondent Court of Industrial Relations in another case (MWD Workers Union v. I: WON respondent Court of Industrial Relations has jurisdiction to adjudicate overtime pay considering that this issue was not among the demands of respondent union in the principal case but was merely dragged into the case by the intervenors H: Yes. the amount to be paid for each day shall be determined by dividing the monthly pay. plans and policies. Distinguishing Characteristic of Managerial Employees (RA 2377 Explanatory Note): He is not subject to the rigid observance of regular office hours. MWD CIR Case No. 10. experience or knowledge which requires the exercise of discretion and independent judgment. As a matter of fact.  This is unfair for under such method the employee is made to pay twice for his undertime because his leave is reduced to that extent while he was made to pay for it with work beyond the regular working hours. 8. This method also obviates the irregular schedule that would result if the overtime should be set off against the undertime for that would place the schedule for working hours dependent on the employee. nor move about at their own discretion. I: WON those attached to the General Auditing Office and the Bureau of Public Works come within the purview of Commonwealth Act No. nor do they participate in the formulation of its policies nor in the hiring and firing of its employees. it concludes. Reason behind exemption: The philosophy behind the exemption of managerial employees from the 8-Hour Labor Law is that such workers are not usually employed for every hour of work but their compensation is determined considering their special training. I: What is the correct method to determine the equivalent daily wage of a monthly salaried employee. The same may be said of the employees of the Bureau of Public Works assigned to work in the NAWASA. they have little freedom of action. The method used by the NAWASA in off-setting the overtime with the undertime and at the same time charging said undertime to the accrued leave is unfair. In labor disputes technicalities of procedure should as much as possible be avoided not only in the interest of labor but to avoid multiplicity of action. In computing the daily wage. Hence.

1880 could prescribe the working days of employees and laborers in government-owned and controlled corporations depending upon the exigencies of the service. under the first indorsement of the President of the Philippines dated August 12. vs. petitioners. Inciong. and by sewerage chambers should be understood to mean as the surroundings where the work is actually done. et. set aside . five days per week for health personnel.  CBA: “Because of the peculiar nature of the function of those employees and laborers of the Sewerage Division who actually work in the sewerage chambers. They emit foul and filthy odor dangerous to health. manholes. they shall receive extra compensation equivalent to twenty-five (25%) of their basic wage. let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be. then there appears to be no sense at all why Section 15 of the implementing rules grants additional compensation equivalent to the regular rate plus at least twenty-five percent thereof for work performed on Sunday to health personnel.A. o The wet pits.H: Yes. 1997 FACTS: Then Labor Secretary Franklin M. maintenance. SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW et. watchmen. I: How should the collection bargaining agreement of December 28. 1956 and Resolution No. 1956 25% additional compensation for those who actually work in and outside sewerage chambers in accordance with Resolution No. watchmen and guards. 4 in line with R."  SC finds that those who are entitled to the distress pay are those employees and laborers who work in the sewerage chambers whether they belong to the sewerage division or not. The Labor Arbiter and NLRC both dismissed their complaints and MR was also denied. 1979. Insular Bank of Asia and America" (respondent-appellant). the industrial court justified the staggering of the work days of those holding positions as pump operators. medical services.R. 29. No. H: There is no valid reason to disturb the finding of the Court of Industrial Relations that the work of the personnel in the construction. HELD: No. this petition..£îhqw⣠xxx xxx xxx ALL THE FOREGOING CONSIDERED. valve. sewerage. in NLRC case No. al. 83. Petitioners filed a complaint for the expeditious implementation and payment by respondent” Juan De Dios Hospital “. or an “additional straight-time pay which must be equivalent at least to the regular rate” ” for work performed in excess of forty hours a week. I: WON.”  November 25. stated that the staggering should not apply to the personnel in the construction. 359-V are applicable not only to those who were already in the service as of the date of the decision but also to those who were employed subsequent to said date. vs. In said Policy Instruction. which authorizes herein petitioner to stagger the working days of its employees and laborers. as it is hereby. RB-IV-1561-76 entitled "Insular Bank of Asia and America Employees' Union (complainant-appellee). and (c) installation and repairs of house sewer connections. respondents G. machineries and shops because they work below 365 days a year and their services are not continuous to require staggering. The court." It is clear then that all the laborers whether of the sewerage division or not assigned to work in and outside the sewerage chambers and suffer in unusual distress because of the nature of their work are entitled to the extra compensatory. are filthy sources of germs and different diseases. There is nothing in the law that supports then Secretary of Labor’s assertion that “personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40hour/5-day workweek in any given workweek”. Drilon issued Policy Instruction No. filter and chlorine operators. the dispositive portion of which reads as follows: têñ. not necessarily "inside the sewerage chambers. chlorine operators. those whose services are indispensably continuous throughout the year may be staggered in the same manner as the pump. (b) cleaning and maintenance of sewer mains. LCP. sewerage. valve operators. however.. 1957. series of 1957 of the Grievance Committee be interpreted and construed insofar as the stipulations therein contained relative to "distress pay" is concerned? H: All the laborers. What Article 83 merely provides are: (1) the regular office hour of eight hours a day. And this conclusion is further bolstered by the findings of the industrial court regarding the main activities of the sewerage division.” ISSUE: WON the intent of Art.NATIONAL LABOR RELATIONS COMMISSION. 126383 November 28. 1957 Agreement between labor and management: "Distress Management agreed to pay effective October 1. causing "unusual distress" to them. if petitioners are entitled to two days off with pay. Also. machineries and shops of petitioner is not continuous as to require staggering.  In resolving this issue. maintenance. and those in the medical service for the reason that the same was made pursuant to the authority granted by the President who in the valid exercise of the powers conferred upon him by Republic Act No. and (2) where the exigencies of service require that health personnel work for six days or forty-eight hours then such health personnel shall be entitled to an additional compensation of at least thirty percent of their regular wage for work on the sixth day. is that persons in subject hospitals and clinics who have completed the 40-hour/5-day workweek in any given workweek are entitled to a full weekly wage for seven days. Hence. o Activities of sewerage division: (a) cooperation of the sewerage pumping stations. which are full of sewage matters. filter operators. and those attached to the recreational facilities. trenches. guards. al. it was provided that: “The Labor Code in its Article 83 adopts and incorporates the basic provisions of RA 5901 and retains its spirit and intent which is to shorten the workweek of covered hospital personnel and at the same time assure them of a full weekly wage. Those working in such places and exposed directly to the distress of contamination. Amado G. of respondent Deputy Minister of Labor. The rates of minimum pay fixed in CIR Case No. 9 (explaining CBA stipulation) of the Grievance Committee. 11. 12. whether assigned to the sewerage division or not who are actually working inside or outside the sewerage chambers are entitled to distress pay. This is a petition for certiorari to set aside the order dated November 10. 5901 which “requires that the covered hospital workers who used to work 7 days a week should be paid for such number of days for working only 5 days or 40 hours a week”.

£îhqw⣠Art. Maundy Thursday. Maundy Thursday. 1975. Policy Instruction No. whereby the respondent bank was ordered to pay its employees their daily wage for the unworked regular holidays. (a) Every worker shall be paid his regular daily wage during regular holidays. 1975. This being the case. and the day designated by law for holding a general election. National Labor Relations Commission. it is not amiss to state with certainty that the instant claim for wages on regular unworked holidays is found to be tenable and meritorious. On August 30.D.£îhqw⣠xxx xxx xxx xxx xxx xxx This conclusion is deduced from the fact that the daily rate of pay of the bank employees was computed in the past with the unworked regular holidays as excluded for purposes of determining the deductible amount for absences incurred Thus. only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit. the fourth of July. stopped the payment of holiday pay to an its employees. — (a) Every worker shall be paid his regular daily wages during regular holidays. Good Friday. the twelfth of June. 1976. the ninth of April. Conciliation having failed. promulgated dismissing the instant case for lack of merit (p. the twelfth of June. 1975.£îhqw⣠xxx xxx xxx The records disclosed that employees of respondent bank were not paid their wages on unworked regular holidays as mandated by the Code.and a new judgment.£îhqw⣠Sec. to wit: (c) As used in this Article. by authority of Article 5 of the same Code. Status of employees paid by the month. if deductions are made from his monthly salary on account of holidays in months where they occur.. Presidential Decree No. The controversial section thereof reads: têñ. In the case of monthly. The use of the factor 303 indicates the number of ordinary working days in a year (which normally has 365 calendar days). the twenty-fifth and the thirtieth of December. Accordingly. he is presumed to be already paid the ten (10) paid legal holidays. petitioner filed a complaint against the respondent bank for the payment of holiday pay before the then Department of Labor. The use of 251 as a factor (365 calendar days less 52 Saturdays. 94. the twenty-fifth and the thirtieth of December and the day designated by law for holding a general election. NLRC rec. Art.. On April 23. WHEREFORE. 850. Right to holiday pay. 2. On September 10. 1975 (p. and 10 regular holidays) gives rise likewise to the same presumption that the unworked Saturdays. excluding the 52 Sundays and the 10 regular holidays. the ninth of April the first of May. granting petitioner's complaint for payment of holiday pay. this policy has been fully clarified to eliminate controversies on the entitlement of monthly paid employees. this gives rise to a presumption that the monthly rate does not include payments for unworked regular holidays. and his monthly pay is uniform from January to December. 1975. the thirtieth of November. Right to holiday pay. 1974 (pp. Labor Arbiter Ricarte T. underscoring supplied). except in retail and service establishments regularly employing less than ten (10) workers. (b) The term "holiday" as used in this chapter. Instead. The ten (10) paid legal holidays law. The antecedent facts culled from the records are as follows: Respondent bank did not appeal from the said decision. shall include: New Year's Day. the Department of Labor (now Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with pay. it complied with the order of Arbiter Ricarte T. Soriano by paying their holiday pay up to and including January. among others. and upon the request of both parties. by reason of the ruling laid down by the aforecited rule implementing Article 94 of the Labor Code and by Policy Instruction No. — Employees who are uniformly paid by the month. For this purpose. rec. except in retail and service establishments regularly employing less than 10 workers. "holiday" includes New Year's Day. 97-99. petitioner filed a motion for a writ of execution to enforce the arbiter's decision of August 25. with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not. among others. IV in Manila. then he is still entitled to the ten (10) paid legal holidays.£îhqw⣠On June 20. on February 16. However. Under the rules implementing P. the fourth of July.. the provisions of the Labor Code on the right to holiday pay to read as follows: têñ. 1976. 1975. to start with. 9. Respondent bank. pertinent portions of which read: têñ. On August 25. têñ. judgment is hereby rendered: (a) xxx xxxx xxx (b) Ordering respondent to pay wages to all its employees for all regular h(olidays since November 1. Sundays and regular holidays are unpaid. Good Friday. 850 was promulgated amending. is intended to benefit principally daily employees. . Pertinent portions of the decision read: (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate and têñ. the maximum monthly minimum wage. 109 rec. 208." (emphasis supplied). irrespective of the number of working days therein. if the employer uses the factor 303 days as a divisor in determining the daily rate of monthly paid employee. respondent bank filed an opposition to the motion for a writ of execution alleging. 18. the first of May. 9 was issued by the then Secretary of Labor (now Minister) interpreting the above-quoted rule. 1976. Regional Office No. that: (a) its refusal to pay the corresponding unworked holiday pay in accordance with the . On December 16. the case was certified for arbitration on July 7. the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve" (italics supplied). particularly Article 208.). 52 Sundays. Soriano rendered a decision in the above-entitled case. the thirtieth of November. 1976. The new determining rule is this: If the monthly paid employee is receiving not less than P240.

94.). (emphasis supplied). 1979. On November 17. On March 19.). In case of monthly. but not to government employees. with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not. Right to holiday pay. the dispositive portion of which reads as follows: têñ. On July 30. is based on and justified by Policy Instruction No. Public respondent maintains that "(T)he rules implementing P. is intended to benefit principally daily paid employees. only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit' " (pp. NLRC rec. considering that its monthly paid employees are not receiving less than P240.). D. 9 were issued to clarify the policy in the implementation of the ten (10) paid legal holidays. it is clear that monthly paid employees are not excluded from the benefits of holiday pay. 1976. except in retail and service establishments regularly employing less than ten (10) workers.£îhqw⣠In view of the foregoing. 1978. through Deputy Minister Amado G. executory and unappealable. 364. as prayed for by complainant. NLRC rec. 'unworked' legal holidays are deemed paid insofar as monthly paid employees are concerned if (a) they are receiving not less than the statutory minimum wage. managerial employees. and (b) that the said award is already repealed by P. (b) their monthly pay is uniform from January to December. under Rule IV. From the above-cited provisions. as it is hereby. 80. issued an order. execution is a matter of right for the petitioner. — (a) Every worker shall be paid his regular daily wage during regular holidays. Inciong. praying that a writ of execution be issued by the National Labor Relations Commission pending appeal of the case with the Office of the Minister of Labor. D.D. reiterating therein its contentions averred in its opposition to the motion for writ of execution. 850 which took effect on December 16. Coverage. (8) months after it was promulgated. NLRC rec. field personnel members of the family of the employer who are dependent on him for support domestic helpers. set aside and a new judgment promulgated dismissing the instant case for lack of merit (p.). 850. . Book Ill of the implementing rules. 1979. 1 1. and by said Policy Instruction No. whether for profit or not. I WE agree with the petitioner's contention that Section 2. Inciong with abuse of discretion amounting to lack or excess of jurisdiction. The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out under Article 82 thereof which reads: têñ. 340-341. Respondent bank filed its opposition thereto on August 8. 260-274. Book III of the implementing rules and Policy Instruction No. rec. which provides that: "employees who are uniformly paid by the month. in accordance with the Decision of the Labor Arbiter dated August 25. as amended by P. 1976. 1979. and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.). Soriano. 84. 9 of the Department of Labor. This contention is untenable. 100-103. while copies were served on the respondent bank on February 13. On August 13. 1976 (p. 850. 64-65. As interpreted. rec. and (c) that the decision of the labor arbiter dated August 25.£îhqw⣠ALL THE FOREGOING CONSIDERED. appeal from the said decision is no longer available (pp. respondent's appeal. 1975. Section 2. the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly paid employees from the said benefits by inserting. However. 'The ten (10) paid legal holidays law. NLRC rec. and (b) that since the decision had been partially implemented by the respondent bank. this petition for certiorari charging public respondent Amado G. and that no deductions are made from the monthly salaries of its employees on account of holidays in months where they occur (pp. provides: têñ. 9 which interpreted the rules implementing P. to start with.).£îhqw⣠Art. The issue in this case is: whether or not the decision of a Labor Arbiter awarding payment of regular holiday pay can still be set aside on appeal by the Deputy Minister of Labor even though it has already become final and had been partially executed. " têñ. 1975" (p. Respondent bank further alleged for the first time that the questioned order is not supported by evidence insofar as it finds that respondent bank discontinued payment of holiday pay beginning January. the dispositive portion of which states: têñ. . On October 18. in dismissing the respondent's appeal on pure technicalities without passing upon the merits of the appeal and (b) that the resolution appealed from is contrary to the law and jurisprudence (pp.£îhqw⣠The Chief. 1979. we hereby resolve to dismiss.. On February 21. petitioner filed a second motion for execution pending appeal. the National Labor Relations Commission issued an order which states: Hence. alleging therein the following: (a) that there is prima facie evidence of grave abuse of discretion. D. 1979.). 1979. rec. 9. the Office of the Minister of Labor. 1975 is supported by the law and the evidence in the case (p. respondent bank appealed from the above-cited order of Labor Arbiter Soriano to the National Labor Relations Commission. they in effect amended them by enlarging the scope of their exclusion (p.. Research and Information Division of this Commission is hereby directed to designate a Socio-Economic Analyst to compute the holiday pay of the employees of the Insular Bank of Asia and America from April 1976 to the present. WE find for the petitioner. 436. 1979. Labor Arbiter Ricarte T.£îhqw⣠Art. to order the issuance of the proper writ of execution (p. on the basis of an Implementing Rule and Policy Instruction promulgated by the Ministry of Labor long after the said decision had become final and executory. Article 94 of the Labor Code. NLRC rec. the National Labor Relations Commission promulgated its resolution en banc dismissing respondent bank's appeal.00 and their monthly pay is uniform from January to December. 1975.). Soriano's order of 18 October 1976 and. NLRC rec.). the finality of which was affirmed by the National Labor Relations Commission sitting en banc. persons in the personal service of another. 1979 or almost eight. amounting to lack of jurisdiction on the part of the National Labor Relations Commission. irrespective of the number of working days therein. 82. Copies of the above resolution were served on the petitioner only on February 9.. and (c) no deduction is made from their monthly salary on account of holidays in months where they occur. On November 10.). 1391. .award of Labor Arbiter Ricarte T. respondent bank filed with the Office of the Minister of Labor a motion for reconsideration/appeal with urgent prayer to stay execution.. rec. — The provision of this Title shall apply to employees in all establishments and undertakings. As explained in Policy Instruction No. On June 20. Rule IV. issued an order enjoining the respondent bank to continue paying its employees their regular holiday pay on the following grounds: (a) that the judgment is already final and the findings which is found in the body of the decision as well as the dispositive portion thereof is res judicata or is the law of the case between the parties. let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be. to set aside Labor Arbiter Ricarte T.D. petitioner filed its opposition to the respondent bank's appeal and alleged the following grounds: (a) that the office of the Minister of Labor has no jurisdiction to entertain the instant appeal pursuant to the provisions of P. as we hereby dismiss. instead of issuing a writ of execution. Soriano dated August 25. 850 and Policy Instruction No. 244. (b) that the labor arbiter's decision being final. 9 issued by the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code's provisions on holiday pay.

53337. Sy Man vs.. when necessary. In the terse language of the present Chief Justice. Jacinto & Fabros.. 259). Hilado vs. B. the presumption is always in favor of law. and the same is therefore void. an administrative agency "cannot amend an act of Congress. it is bound to observe the constitutional mandate. 93 Phil. D. citing Teozon vs. public respondent Deputy Minister of Labor Amado G. public respondent maintains that on the authority of De Luna vs. No deviation is allowable. To start with. rec. By such regulations. in fact. Soriano dated August 25." In 1936. In view of the foregoing." Moreover." This argument may sound meritorious. this Court ruled that: têñ. Thus. 463.. vs. in whom all executive power resides.£îhqw⣠. which renders the execution of the said decision impossible and unjust on the part of herein respondent bank (pp. however. However. . unlike the instant case.. Estenzo. Its terms must be followed the statute requires adherence to. II It is not disputed that the decision of Labor Arbiter Ricarte T..D. as ruled by this Court in a long line of cases . Social Security Commission. Book III of the Rules to implement the Labor Code and Policy instruction No. 850 on February 16. Then came in a 1914 decision. Members of the Board of Administrators. partially executed by the respondent bank. even if the courts are not in agreement with the policy stated therein or its innate wisdom. he can annul the final decision of Labor Arbiter Soriano since the ensuing promulgation of the integrated implementing rules of the Labor Code pursuant to P. this Court expressed its disapproval of an administrative order that would amount to an excess of the regulatory power vested in an administrative official We reaffirmed such a doctrine in a 1951 decision. G. as the regulations relate solely to carrying into effect the provisions of the law. et al. 295. 342-343. 36). Inc. 1976). It is the role of the Judiciary to refine and. Accordingly. 155 A. administrative interpretation of the law is at best merely advisory. speaking for the Court in Victorias Milling inc. supra. National Labor Relations Commission (106 SCRA 444. As earlier stated. March 24. The Chartered Bank (NLRC Case No. Collector of Internal Revenue. RB-1789-75. almost always in situations where some agency of the State has engaged in action that stems ultimately from some legitimate area of governmental power (The Supreme Court in Modern Role. "It cannot be otherwise as the Constitution limits the authority of the President. 9. as in the instant case. 61 SCRA 49.) made clear that where an administrative order betrays inconsistency or repugnancy to the provisions of the Act. 1974. Inciong had no basis at all to deny the members of petitioner union their regular holiday pay as directed by the Labor Code.. 464. 1976. Inc. While it is true that the contemporaneous construction placed upon a statute by executive officers whose duty is to enforce it should be given great weight by the courts. In the case at bar.£îhqw⣠The recognition of the power of administrative officials to promulgate rules in the administration of the statute. There must be strict compliance with the legislative enactment. in People vs. Rule IV. 9 on April 23. Swisher 1958. 1093. necessarily limited to what is provided for in the legislative enactment. it shall always be presumed that the legislature intended to enact a valid and permanent statute which would have the most beneficial effect that its language permits (Orlosky vs. until the provisions of the Labor Code on holiday pay is amended by another law. This contention is untenable. the Secretary of Labor has exceeded his authority when he included paragraph (k) in Section 1 of the Rules implementing P. in the case of Philippine Apparel Workers Union vs. for it is the courts that finally determine chat the law means. Santos. they are valid. 112. and was.). Thus: "Of course the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law. Olsen & Co.. citing Parker as well as Davis did tersely sum up the matter thus: "A rule is binding on the Courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature. had already become final. 1984. no pay. No. p. in the context of the interactions of the three branches of the government. to take care that the laws be faithfully executed. is to correct the disadvantages inherent in the daily compensation system of employment — holiday pay is primarily intended to benefit the daily paid workers whose employment and income are circumscribed by the principle of "no work. 9 issued by the then Secretary of Labor must be declared null and void. xxx xxx xxx Clearly. therefore." Respondents can be sustained. the same must be declared as null and void." Obviously. In Policy Instruction No. United States vs. Section 2. July 31. Necessarily. C. 1976 by the then Secretary of Labor are facts and circumstances that transpired subsequent to the promulgation of the decision of the labor arbiter. not departure from its provisions. see also Santos vs. PVA 33 SCRA 585. still if such construction is so erroneous. Aldanese and Trinidad. The National Labor Relations Commission and American Wire & Cable Co. On the other hand. may be found in the early case of United States vs. 'the mandate of the Act must prevail and must be followed.R. . 43 Phil.. 119) delineation of the scope of such competence. of course. 419. as expressed by the Secretary of Labor in the case of Chartered Bank Employees Association v. shall be resolved in favor of labor. . Thus Article 4 of .It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law must be taken to mean exactly what it says. Public respondent vehemently argues that the intent and spirit of the holiday pay law. the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit . the then Secretary of Labor went as far as to categorically state that the benefit is principally intended for daily paid employees. So long. the Labor Code is always strictly construed against management. the law itself cannot be extended. 109 Phil. but. Tupasi Molina (29 Phil. November 13. vs. Apparel Workers Union vs. monthly paid employees are definitely included in the benefits of regular holiday pay. and the issuance of Policy Instruction No. 100 Phil. National Labor Relations Commission. negatively put. where we again This ruling of the Court was recently reiterated in the case of American Wire & Cable Workers Union (TUPAS) vs. the case of De Luna relied upon by the public respondent is not a labor case wherein the express mandate of the Constitution on the protection to labor is applied. the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of Labor. têñ. correct constitutional (and/or statutory) interpretation. including its implementing rules and regulations. Haskell. Barrios decided in 1908. . Kayanan. when the law clearly states that every worker shall be paid their regular holiday pay. and for the sole purpose of carrying into effect its general provisions. 1981) where the Secretary of Labor enlarged the scope of exemption from the coverage of a Presidential Decree granting increase in emergency allowance. No lesser administrative executive office or agency then can. 1975.it provides for both the coverage of and exclusion from the benefits. 1 1 23. contrary to the express language of the Constitution assert for itself a more extensive prerogative. only if it could be shown that the rules and regulations promulgated by them were in accordance with what the Veterans Bill of Rights provides" (Phil. promulgated on June 29. Hon. This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code. which states that "All doubts in the implementation and interpretation of the provisions of this Code. Justice Barrera. the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the Labor Code authorizing him to promulgate the necessary implementing rules and regulations.

(44 O. emphasis supplied). said: têñ. 1982. On the question of whether or not a law or statute can annul or modify a judicial order issued prior to its promulgation.. 113 SCRA 405. March 30. we will have a situation wherein a final and executed judgment can still be annulled or modified by the court upon mere motion of a panty This would certainly result in endless litigations thereby rendering inutile the rule of law. just as the court is ousted of its jurisdiction to annul or modify a judgment the moment it becomes final. et al. & Surety Co. while iii the instant case. vs. 138. Judge of First Instance of Manila. have retroactive effect in the sense of annulling or modifying vested rights." This rule applies to decisions or orders of labor arbiters who are exercising quasi-judicial functions since ". we are constrained to hold however. or decisions. 1959. et al. became final on the date of its issuance and the parties who acquired rights thereunder cannot be deprived thereof by a constitutional provision enacted or promulgated subsequent thereto. in the sense of revoking or rendering it void and of no effect. it is patently unjust to deprive the members of petitioner union of their vested right acquired by virtue of a final judgment on the basis of a labor statute promulgated following the acquisition of the "right". the rule of execution of judgments under the rules should govern all kinds of execution of judgment. WCC. as in this case. 63 Phil. the amendatory rule (Rule IV. Ramos vs. WE find no merit in this argument. xxx xxx xxx In the recent case of Gabaya vs. October 31. 1978. The equitable considerations that led the lower court to take the action complained of cannot offset the dem ands of public policy and public interest — which are also responsive to the tenets of equity — requiring that an issues passed upon in decisions or final orders that have become executory. this Court said: ".. the subsequent amendment or even repeal of said law or rule may not affect the final decision. no further amendment or correction can be made by the court except for clerical errors or mistakes." Thus. citing Cruz vs. it was stated that the rule must be adhered to regardless of any possible injustice in a particular case for (W)e have to subordinate the equity of a particular situation to the overmastering need of certainty and immutability of judicial pronouncements xxx xxx xxx III The despotic manner by which public respondent Amado G. 75 SCRA 436.. . WCC. Neither the Constitution nor the statutes. see also Soliven vs. " In case of doubt.. "All doubts in the implementation and interpretation of the provisions of this Code. 77 SCRA 297. Inciong divested the members of the petitioner union of their rights acquired by virtue of a final judgment is tantamount to a deprivation of property without due process of law Public respondent completely ignored the rights of the petitioner union's members in dismissing their complaint since he knew for a fact that the judgment of the labor arbiter had long become final and was even partially executed by the respondent bank.W. Respondent bank counters with the argument that its partial compliance was involuntary because it did so under pain of levy and execution of its assets (p. as correct. Philippine Long Distance Telephone Co. for.the Labor Code provides that. being unappealable. thus setting at naught the main role of courts of justice. otherwise. Carrero vs. WCC and têñ. it was categorically stated that the rule is absolute that after a judgment becomes final by the expiration of the period provided by the rules within which it so becomes. Mendoza. 791). orders. 65 N.. through Associate Justice Claro M. decisions. be deprived arbitrarily without injustice" (Rookledge v.. rec. In the earlier case of Contreras and Ginco vs. 585. decided jointly. 1961. the facts of the case relied upon by the public respondent are not analogous to that of the case at bar. xxx xxx xxx The lower court was thus aware of the fact that it was thereby altering or modifying its order of January 8.. shall be resolved in favor of labor and Article 1702 of the Civil Code provides that. that the lower court had no authorities to make said alteration or modification. including its implementing rules and regulations. Ronquillo (94 Phil. vs.£îhqw⣠xxx xxx xxx xxx xxx xxx We are decidedly of the opinion that they did not. 96 Phil. Under these circumstances. when a court renders a decision or promulgates a resolution or order on the basis of and in accordance with a certain law or rule then in force. and of which the individual could no. Regardless of the excellence of the motive for acting as it did. In Galvez vs.. Republic.£îhqw⣠Consequently. 19 Phil. . January 31. except penal laws favorable to the accused. Inc. Ibid).. 63 Phil. 3 SCRA 422. Republic. Felix and China Banking Corp. contrary to public respondent's allegations.. Book III of the Rules to Implement the Labor Code) cannot be given retroactive effect as to modify final judgments. 1954. Vitug vs. this Court ruled thus: têñ.G. or orders of the Labor Arbiter or compulsory arbitrators are final and executory unless appealed to the Commission by any or both of the parties within ten (10) days from receipt of such awards. A party who waives his right to appeal is deemed to have accepted the judgment. & Surety Co. 324. unless it is otherwise provided in other laws" Sagucio vs.. awards. Section I of Rule 39 of the Revised Rules of Court provides that ". to permit a party to appeal from the said partially executed final judgment would make a mockery of the doctrine of finality of judgments long enshrined in this jurisdiction. Regala vs.. where the lower court modified a final order.. Bulos 5 SCRA 803) and Article 223 of the Labor Code provides that ". 2d 785." Thus... adverse or not. WCC. 89 SCRA 143. 69 SCRA 576). under the aforecited rule. the final judgment is partially executed. WCC. there would be no end to litigations. execution shall issue as a matter of right upon the expiration of the period to appeal . or if no appeal has been duly perfected. 406. 77 SCRA 621. or resolution already promulgated. Judge of First Instance of Manila. this Court. which is to assist in the enforcement of the rule of law and the maintenance of peace and order. the lapse of the appeal period deprives the courts of jurisdiction to alter the final judgment and the judgment becomes final ipso jure (Vega vs. 526). 4306).. Not even a law can validly annul final decisions (In re: Cunanan. otherwise. by settling justiciable controversies with finality. 324).£îhqw⣠In Marasigan vs. And such final judgment is conclusive not only as to every matter which was offered and received to sustain or defeat the claim or demand but as to any other admissible matter which must have been offered for that purpose (L-7044. In the case of In re: Cunanan. be deemed conclusively disposed of and definitely closed for. 2 PHILAJUR 436. A final judgment is "a vested interest which it is right and equitable that the government should recognize and protect. March 18. Said order. all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. 440. Garwood. A final judgment vests in the prevailing party a right recognized and protected by law under the due process clause of the Constitution (China Ins. Recto. order.. the court also loses its jurisdiction to annul or modify a writ of execution upon its service or execution.). Respondent bank clearly manifested its voluntariness in complying with the decision of the labor arbiter by not appealing to the National Labor Relations Commission as provided for under the Labor Code under Article 223. 237).. this Court said: xxx xxx xxx Furthermore. 423. or altering contractual obligations" (China Ins. especially if such party readily acquiesced in the judgment by starting to execute said judgment even before a writ of execution was issued. . The case of De Luna speaks of final and executory judgment.

Said article defines field personnel as "nonagritultural 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." Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary arbitration and appointed respondent Benigno Vivar. as voluntary arbitrator. 130 and as implemented by Section 5 of the rules implementing B. this petition. And "(I)t has been likewise established that a violation of a constitutional right divested the court of jurisdiction.) filed with the National Labor Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and obligations respecting claims of its monthly paid employees for holiday pay in the light of the Court's decision in Chartered Bank Employees Association v. The respondent company controverts this assertion. 1987.m. 1985. 1986. Inc. night differential. We concur with the following disquisition by the respondent arbitrator: . SORIANO DATED AUGUST 25. 51 SCRA 211. 138-145) The petitioner maintains that the period between 8:00 a. amounting to lack or excess of jurisdiction in issuing the order dated November 10. The company has no way of determining whether or not these sales personnel. Inc.. subject only to the exclusions and limitations specified in Article 82 and such other legal restrictions as are provided for in the Code. truck drivers. AND THE DECISION OF LABOR ARBITER RICARTE T. the respondent arbitrator refused to take cognizance of the case reasoning that he had no more jurisdiction to continue as arbitrator because he had resigned from service effective May 1. 118.. THE PETITION IS HEREBY GRANTED. (Rollo. He likewise ruled that with the grant of 10 days' holiday pay. JR. He adjudged. that the company's sales personnel are field personnel and. de Cuaycong vs. and as a consequence its judgment is null and void and confers no rights" (Phil. 1986. vacation and sick leave benefits due to the use of 251 divisor. any statutory provision to the contrary notwithstanding (Vda.m. (now Nestle Philippines. night differential. Under Article 82. comprises the sales personnel's working hours which can be determined with reasonable certainty. sales representatives. Phil. The controversy centers on the interpretation of the clause "whose actual hours of work in the field cannot be determined with reasonable certainty. Batas Pambansa Blg. 1975. petitioner. This labor dispute stems from the exclusion of sales personnel from the holiday pay award and the change of the divisor in the computation of benefits from 251 to 261 days. and GUTIERREZ. vs. merchandisers and medical representatives (hereinafter referred to as sales personnel) from the award of the holiday pay.m. INC. Inciong is a clear example of deprivation of property without due process of law and constituted grave abuse of discretion. BENIGNO VIVAR. field personnel are not entitled to holiday pay. vacation and sick leave pay.. 1973). (formerly FILIPRO. after having reported to the office and come back to the office at 4:00 p. if they are Makati-based. 1974. Thus. The petitioner union raises the following issues: 1) Whether or not Nestle's sales personnel are entitled to holiday pay.lt is by this guiding principle that the due process clause is interpreted. Espinas for petitioner. to 4:00 or 4:30 p.P. INC. that their sales personnel are not field personnel and are therefore entitled to holiday pay." On January 2. the divisor should be changed from 251 to 261 days and whether or not the previous use of 251 as divisor resulted in overpayment for overtime. Both Nestle and UFE filed their respective motions for partial reconsideration. IS HEREBY REINSTATED. the action of public respondent Amado G. On November 8. NATIONAL LABOR RELATIONS COMMISSION and NESTLÉ PHILIPPINES.m.m. June 5. pay its monthly paid employees holiday pay pursuant to Article 94 of the Code. Arbitrator Vivar rendered a decision directing Filipro to: It is undisputed that these sales personnel start their field work at 8:00 a. as such. 1987 remanding the case to the respondent arbitrator on the ground that it has no jurisdiction to review decisions in voluntary arbitration cases pursuant to Article 263 of the Labor Code as amended by Section 10. the divisor should be changed from 251 to 261 and ordered the reimbursement of overpayment for overtime. 31) Filipro filed a motion for clarification seeking (1) the limitation of the award to three years. J. are not entitled to holiday pay.. night differential. The Court does not agree. p. and judicial proceedings suffering from the same flaw are subject to the same sanction. Ople (138 SCRA 273 [1985]). or 4:30 p. Inc. JR. Hence. Jose C. the respondent arbitrator issued an order declaring that the effectivity of the holiday pay award shall retroact to November 1. prior to field work and come back at 4:30 p. acts of Congress. and (3) deduction from the holiday pay award of overpayment for overtime. (Rollo. even if they report to the office before 8:00 a. however. emphasis supplied). respondents. 1979.m.: 2) Whether or not. pp. later Chief Justice. Blooming Mills Employees Organization vs. vacation and sick leave pay due to the use of 251 days as divisor. Siguion Reyna. as well as those of the Executive. (2) the exclusion of salesmen. The petitioner insists that respondent's sales personnel are not field personnel under Article 82 of the Labor Code.). and that the use of 251 as divisor is an established employee benefit which cannot be diminished.m. However. THE ORDER OF PUBLIC RESPONDENT IS SET ASIDE. in the pithy language of then Justice. Concepcion ". really spend the hours in between in actual field work. Petitioner UFE answered that the award should be made effective from the date of effectivity of the Labor Code.. 1980. Blooming Mills Co. On January 14. Jr. respondent Filipro. Montecillo & Ongsiako for private respondent. concomitant with the award of holiday pay. UNION OF FILIPRO EMPLOYEES (UFE). Blg. Tested by and pitted against this broad concept of the constitutional guarantee of due process. can deny due process only under pain of nullity. de Sengbengco 110 Phil. 130. Respondent Arbitrator treated the two motions as appeals and forwarded the case to the NLRC which issued a resolution dated May 25. The law requires that the actual hours of work in the field be reasonably ascertained. the date of effectivity of the Labor Code. in a letter dated July 6. WHEREFORE. Vda..

The petitioner asserts that the company's sales personnel are strictly supervised as shown by the SOD (Supervisor of the Day) schedule and the company circular dated March 15.m.m. is not within the realm of work in the field as defined in the Code but an exercise of purely management prerogative of providing administrative control over such personnel. there was a consequent need to abandon that 251 divisor. pp. the Court stated: The reasons for excluding an outside salesman are fairly apparent. The petitioner union also assails the respondent arbitrator's ruling that. in deciding whether or not an employee's actual working hours in the field can be determined with reasonable certainty. . 1984 (Annexes 2 and 3. Okla. pp. Contrary to the contention of the petitioner. the requirement that "actual hours of work in the field cannot be determined with reasonable certainty" must be read in conjunction with Rule IV. The purpose of this schedule is merely to ensure that the sales personnel are out of the office not later than 8:00 a.m. p. This is indeed an extremely difficult legal question of interpretation which accounts for what is claimed as falling within the concept of "solutio indebti. This does not in any manner provide a reasonable level of determination on the actual field work of the employees which can be reasonably ascertained. The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty. One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank. . the company practice indicates that the monthly salaries of the employees are so computed as to include the holiday pay provided by law. and 4:00 or 4:30 p. (Rollo. Inc. Coverage — This rule shall apply to all employees except: xxx xxx xxx (e) Field personnel and other employees whose time and performance is unsupervised by the employer . In San Miguel Brewery. Such a salesman. reimbursement of such overpayment with the use of 251 as divisor arises concomitant with the award of ten holidays with pay. 118 F. truck drivers and merchandisers is practically a physical impossibility. With the inclusion of ten holidays as paid days. the extent or scope and result of which are subject to their individual capacity and industry and which "cannot be determined with reasonable certainty. 53-55). (2) good collection performance. . The petitioner claims that the fact that these sales personnel are given incentive bonus every quarter based on their performance is proof that their actual hours of work in the field can be determined with reasonable certainty. 2d 202. (5) minimal market returns. Likewise. Sec. The petitioner contends otherwise. This is the thrust of our pronouncement in Chartered Bank Employees Association v. The 251 working days divisor is the result of subtracting all Saturdays. The SOD schedule adverted to by the petitioner does not in the least signify that these sales personnel's time and performance are supervised. (Rollo. There are no restrictions respecting the time he shall work and he can earn as much or as little.C. to a greater extent. The period between 8:00 a. when they report back to their office.. Rollo. and are back in the office not earlier than 4:00 p.The requirement for the salesmen and other similarly situated employees to report for work at the office at 8:00 a. Sundays and the ten (10) legal holidays from the total number of calendar days in a . comprises their hours of work in the field. the divisor should be changed from 251 to 261 days to include the additional 10 holidays and the employees should reimburse the amounts overpaid by Filipro due to the use of 251 days' divisor.." When the claim of the Union for payment of ten holidays was granted. p. p. (Rollo. These employees are evaluated by the result of their work and not by the actual hours of field work which are hardly susceptible to determination. and ends immediately before 4:00 or 4:30 p. in computing overtime compensation for its employees.. Book III of the Implementing Rules which provides: Rule IV Holidays with Pay The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales target. To maintain it would create an impossible situation where the employees would benefit with additional ten days with pay but would simultaneously enjoy higher benefits by discarding the same ten days for purposes of computing overtime and night time services and considering sick and vacation leave credits. within the range of his ability. 190). and (6) proper truck maintenance.m.m. creating the assumption that their field work is supervised. Consequently. Ople (supra). In that case. Actual field work begins after 8:00 a. v. While in that case the issue was whether or not salesmen were entitled to overtime pay. (3) proper compliance with good market hygiene. (4) good merchandising work. Williams." The former clause is still within the scope and purview of Article 82 which defines field personnel. Citing the case of Jewel Tea Co. Arbitrator Vivar's rationale for his decision is as follows: . the Court fails to see how the company can monitor the number of actual hours spent in field work by an employee through the imposition of sanctions on absenteeism contained in the company circular of March 15. The new doctrinal policy established which ordered payment of ten holidays certainly adds to or accelerates the basis of conversion and computation by ten days. Therefore. Democratic Labor Organization (8 SCRA 613 [1963]). the petitioner nevertheless attempted to show that its affected members are not covered by the abovementioned rule. We held: It is argued that even without the presumption found in the rules and in the policy instruction. v. as his ambition dictates. 1.m.m. In lieu of overtime he ordinarily receives commissions as extra compensation. and his employer has no way of knowing the number of hours he works per day.m. the Court had occasion to discuss the nature of the job of a salesman. is surface projection. the divisor is no longer 251 but 261 or 262 if election day is counted. concomitant with the award of holiday pay. The above criteria indicate that these sales personnel are given incentive bonuses precisely because of the difficulty in measuring their actual hours of field work. employs a "divisor" of 251 days. He works away from his employer's place of business.A. 13). . and return at 4:00 or 4:30 p. and return to their home station at 4:00 or 4:30 p." This is the reason why effective supervision over field work of salesmen and medical representatives. query must be made as to whether or not such employee's time and performance is constantly supervised by the employer. The Court thinks otherwise. works individually. the same rationale for their exclusion as field personnel from holiday pay benefits also applies. the Court finds that the aforementioned rule did not add another element to the Labor Code definition of field personnel. when the sales personnel follow their field itinerary.m.m. is not subject to the personal supervision of his employer. they are excluded from the ten holidays with pay award. 36-37) Moreover. C. The theoretical analysis that salesmen and other similarly-situated workers regularly report for work at 8:00 a. Hence. 1984. (Emphasis supplied) While contending that such rule added another element not found in the law (Rollo. 34) The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee's salary and in the computation of his daily rate.

There is thus no merit in respondent Nestle's claim of overpayment of overtime and night differential pay and sick and vacation leave benefits. his annual salary already includes holiday pay and totals P26. 1980. Cuerva and Co. Necessarily. Nestle's non-payment of the holiday benefit up to the promulgation of the IBAA case on October 23. undue harshness and resulting unfairness must be avoided. Parties may have acted under it and may have changed their positions. To maintain the same daily rate if the divisor is adjusted to 261 days. In the language of an American Supreme Court decision: "The actual existence of a statute. Book III of the implementing rules and Policy Instruction No. if ever there was one but did not do so. 38 SCRA 429 [1971]. With this consideration. in the guise of clarifying the Labor Code's provisions on holiday pay. it is not far-fetched that Nestle. Hill (93 Phil. Applying the aforementioned doctrine to the case at bar. the date of promulgation of the IBAA case. The holiday pay as above directed shall be computed from October 23. The past cannot always be erased by a new judicial declaration. 142 SCRA 394 [1986]).. individual and corporate. if there be no recognition of what had transpired prior to such adjudication. became final and executory. Nevertheless. the divisor should be 365 and not 251. Inc. issued by the then Secretary of Labor on February 16. the aforementioned implementing rule and policy instruction amended them by enlarging the scope of their exclusion. Rule IV. the use of 251 days' divisor by respondent Filipro indicates that holiday pay is not yet included in the employee's salary. its computation of daily ratio since September 1. This Court has ruled that an appellee who is not an appellant may assign errors in his brief where his purpose is to maintain the judgment on other grounds. due to its use of 251 days as divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and interpretation of this Code. indicating that the 10 holidays were likewise not paid. . and not from the date of effectivity of the Labor Code. 1980. 9. the divisor used by the company was 303. Inciong. When Filipro shifted to a 5day working schebule on September 1. (At pp. An even more recent instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. In Insular Bank of Asia and America Employees' Union (IBAAEU) v. Although the Court does not entirely agree with Nestle. may have been moved to grant other concessions to its employees.year. is an operative fact and may have consequences which cannot justly be ignored. 1985. then dividing such figure by 251 days. then the dividend. Moreover. The . v. including its implementing rules and regulations. 178 SCRA 331 [1989]. therefore." (Chicot County Drainage Dist. Baxter States Bank. If the employees are already paid for all non-working days. we find its claim meritorious. a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. when the company was on a 6-day working schedule. prior to their being declared null and void. WHEREFORE. but from October 23.100. the employee's annual salary is P25. are null and void. 1974. .00. in order to fully settle the issues so that the execution of the Court's decision in this case may not be needlessly delayed by another petition. the Court declared that Section 2. This is merely to reflect awareness that precisely because the judiciary is the government organ which has the final say on whether or not a legislative or executive measure is valid. 1984 is a fairer reckoning period under the facts of this case. is as follows: monthly rate x 12 months ——————————— However. — with respect to particular relations. prior to September 1. Respondent Nestle's invocation of solutio indebiti. Court therein reasoned that. citing La Campana Food Products. (Franco v. respectively. 132 SCRA 663 [1984]. the Court discussed the effect to be given to a legislative or executive act subsequently declared invalid: 251 days xxx xxx xxx Following the criterion laid down in the Chartered Bank case. the order of the respondent arbitrator is hereby AFFIRMED. Flores (99 Phil. v. In the petitioner's case. Technically. 1976 and April 23. This language has been quoted with approval in a resolution in Araneta v. hereinafter referred to as the IBAA case. if prior to the grant of holiday pay. Philippine Commercial and Industrial Bank. it had the chance to rectify its error. . To illustrate. Dividing this by 261 days. should correspondingly be increased to incorporate the holiday pay. Philippine National Bank. Intermediate Appellate Court. its existence as a fact must be reckoned with. It is now too late to allege payment by mistake. 1002 [1952]) and the decision inManila Motor Co. Inc. and particular conduct. shall be resolved in favor of labor. which represents the employee's annual salary. 374 [1940]). Nestle insists that the reckoning period for the application of the holiday pay award is 1985 when the Chartered Bank decision. assuming there are no intervening salary increases. and thinking that it was not obliged to give holiday pay benefits to its monthly paid employees. and which excluded monthly paid employees from holiday pay benefits. otherwise the divisor should have been 261. To require various companies to reach back to 1975 now and nullify acts done in good faith is unduly harsh. the daily rate is still P100.000). relying on the implicit validity of the implementing rule and policy instruction before this Court nullified them. It is now accepted as a doctrine that prior to its being nullified. it is entitled to obedience and respect. his daily rate is P100. but he cannot seek modification or reversal of the judgment or affirmative relief unless he has also appealed. especially in the collective bargaining agreement. 1980. not from the date of promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code.100 (P25. This ruling was not questioned by the petitioner union as obviously said decision was favorable to it. v. The divisor to be used in computing holiday pay shall be 251 days. It would be to deprive the law of its quality of fairness and justice then. It must be stressed that the daily rate. declares its invalidity. promulgated on August 28. This is so as until after the judiciary. In the case of De Agbayani v. The Chartered Bank case reiterated the above ruling and added the "divisor" test. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects. It is now almost the end of 1991. it would be unfair to impose additional burdens on Nestle when the non-payment of the holiday benefits up to 1984 was not in any way attributed to Nestle's fault. 1984. the order of the voluntary arbitrator in hereby MODIFIED. Nestle also questions the voluntary arbitrator's ruling that holiday pay should be computed from November 1." (Article 4). since the daily rate is still the same before and after the grant of holiday pay. 308 US 371. (21 SCRA 1095 [1967]. 434-435) The "operative fact" doctrine realizes that in declaring a law or rule null and void. prior to such a determination of [unconstitutionality]. 1976. This possibility is bolstered by the fact that respondent Nestle's employees are among the highest paid in the industry.100 + 1. respondent Nestle should have filed a separate petition raising the issue of effectivity of the holiday pay award. 1984 was in compliance with these presumably valid rule and policy instruction. 1984. the implementing rule and policy instruction enjoyed the presumption of validity and hence. or payment by mistake. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. 738 [1956]). The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a lower daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of the Labor Code.00 After the payment of 10 days' holiday pay. In all other respects. in an appropriate case. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. is a constant figure for the purpose of computing overtime and night differential pay and commutation of sick and vacation leave credits. the Court resolved to take up the matter of effectivity of the holiday pay award raised by Nestle. private and official. The Court thereby resolves that the grant of holiday pay be effective. the computation of which are all based on the daily rate. the daily rate should also be the same basis for computing the 10 unpaid holidays.