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Coverage and Exclusions

Labor Standards Benefits Covered Under Art. 83, Normal Hours of Work
Hours of Work of Hospital and Clinic Personnel
1. San Juan De Dios Hospital Employees Association-AFW vs. NLRC, G.R. No. 126383, November 28,

- Petitioners, the rank-and-file employee-union officers and members of San Juan De Dios Hospital
Employees Association, sent on July 08, 1991, a four (4)-page letter with attached support signatures x x x
requesting and pleading for the expeditious implementation and payment by respondent Juan De Dios
Hospital "of the 40 HOURS/5-DAY WORKWEEK with compensable weekly two (2) days off provided for by
Republic Act 5901 as clarified for enforcement by the Secretary of Labors Policy Instructions No. 54 dated April 12,
1988.[1]Respondent hospital failed to give a favorable response; thus, petitioners filed a complaint regarding their
claims for statutory benefits under the above-cited law and policy issuance [2], docketed as NLRC NCR Case No. 00-
08-04815-91. On February 26, 1992, the Labor Arbiter[3] dismissed the complaint. Petitioners appealed before
public respondent National Labor Relations Commission[4] (NLRC), docketed as NLRC NCR CA 003028-92,
which affirmed the Labor Arbiters decision. Petitioners subsequent motion for reconsideration was denied; hence,
this petition.

- As the Court sees it, the core issue is whether Policy Instructions No. 54 issued by then Labor Secretary (now
Senator) Franklin M. Drilon is valid or not.

- The evident intention of RA 5901 is to reduce the number of hospital personnel, considering the nature of
their work, and at the same time guarantee the payment to them of a full weekly wage for seven (7) days.
- We note that Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901, otherwise
known as An Act Prescribing Forty Hours A Week Of Labor For Government and Private Hospitals Or Clinic
Personnel, enacted on June 21, 1969. Reliance on Republic Act No. 5901, however, is misplaced for the said
statute, as correctly ruled by respondent NLRC, has long been repealed with the passage of the Labor Code
on May 1, 1974,

- Article 83 of the Labor Code states:

Art. 83. Normal Hours of Work. -- The normal hours of work of any employee shall not exceed eight
(8) hours a day.

- Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals
and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a
day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that
such personnel work for six (6) days or forty-eight (48) hours, in which case they shall be entitled to an additional
compensation of at least thirty per cent (30%) of their regular wage for work on the sixth day . For purposes of this
Article, health personnel shall include: resident physicians, nurses, nutritionists, dietitians, pharmacists,
social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all
other hospital or clinic personnel. (Underscoring supplied)

- A cursory reading of Article 83 of the Labor Code betrays petitioners position that hospital employees are entitled to
a full weekly salary with paid two (2) days off if they have completed the 40-hour/5-day workweek. [6] What Article 83
merely provides are: (1) the regular office hour of eight hours a day, five days per week for health personnel,
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. There is nothing in the law that supports then Secretary of Labors
assertion that personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days
if they have completed the 40-hour/5-day workweek in any given workweek. Needless to say, the Secretary of
Labor exceeded his authority by including a two days off with pay in contravention of the clear mandate of the
statute. Such act the Court shall not countenance.
- we nevertheless find Policy Instructions No. 54 invalid. A perusal of Republic Act No. 5901 [8] reveals nothing
therein that gives two days off with pay for health personnel who complete a 40-hour work or 5-day

- The accompanying bill seeks to grant resident physicians, staff nurses, nutritionists, midwives, attendants and other
hospital and health clinic personnel of public and private hospitals and clinics, the privilege of enjoying the eight
hours a week exclusive of time for lunch granted by law to all government employees and workers except
those employed in schools and in courts. At present those hospitals and health clinic personnel including
those employed in private hospitals and clinics, work six days a week, 8 hours a day or 48 hours a week.

- If petitioners are entitled to two days off with pay, 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, or an additional straight-time pay which must be
equivalent at least to the regular rate [f]or work performed in excess of forty hours a week xxx.

- WHEREFORE, the decision appealed from is AFFIRMED. No costs.

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2. Interphil Laboratories Employees Union vs. Interphil Laboratories Inc., G.R. No. 142824, December
19, 2001

- Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank-and-file
employees of Interphil Laboratories, Inc., a company engaged in the business of manufacturing and packaging
pharmaceutical products. They had a Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31
July 1993.

- Prior to the expiration of the CBA or sometime in February 1993, Allesandro G. Salazar, [1] Vice-President-Human
Resources Department of respondent company, was approached by Nestor Ocampo, the union president, and
Hernando Clemente, a union director. The two union officers inquired about the stand of the company
regarding the duration of the CBA which was set to expire in a few months. Salazar told the union officers that
the matter could be best discussed during the formal negotiations which would start soon.

- In April 1993, Ocampo requested for a meeting to discuss the duration and effectivity of the CBA. Salazar acceded
and a meeting was held on 15 April 1993 where the union officers asked whether Salazar would be amenable to
make the new CBA effective for two (2) years, starting 01 August 1993. Salazar, however, declared that it would still
be premature to discuss the matter and that the company could not make a decision at the moment.
- The very next day, or on 16 April 1993, all the rank-and-file employees of the company refused to follow their regular
two-shift work schedule. A meeting was held but since both parties cannot come to an agreement the overtime
boycott and work slowdown continued which resulted to a slowdown in the production of the company.

- On 14 May 1993, petitioner union submitted with respondent company its CBA proposal, and the latter filed its

- On 03 September 1993, respondent company filed with the National Labor Relations Commission (NLRC) a
petition to declare illegal petitioner unions overtime boycott and work slowdown which, according to
respondent company, amounted to illegal strike.

- On 24 January 1994, petitioner union filed with the NCMB a Notice of Strike citing unfair labor practice allegedly
committed by respondent company. On 12 February 1994, the union staged a strike.

- On 14 February 1994, Secretary of Labor Nieves Confesor issued an assumption order [4] over the labor dispute. On
02 March 1994, Secretary Confesor issued an order directing respondent company to immediately accept all striking

- On 05 September 1995, Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor
Leonardo A. Quisumbing.[8] Then Secretary Quisumbing approved and adopted the report in his Order, dated 13
August 1997, hence:

WHEREFORE, finding the said Report of Labor Arbiter Manuel R. Caday to be supported by
substantial evidence, this Office hereby RESOLVES to APPROVE and ADOPT the same as the
decision in this case, and judgment is hereby rendered:

(1) Declaring the overtime boycott and work slowdown as illegal strike;

(2) Declaring the respondent union officers namely: XXX who spearheaded and led the overtime
boycott and work slowdown, to have lost their employment status;

(3) Finding the respondents guilty of unfair labor practice for violating the then existing CBA which
prohibits the union or any employee during the existence of the CBA from staging a strike or engaging
in slowdown or interruption of work and ordering them to cease and desist from further committing the
aforesaid illegal acts.

- Petitioner union moved for the reconsideration of the order but its motion was denied. The union went to the Court
of Appeals via a petition for certiorari. In the now questioned decision promulgated on 29 December 1999, the
appellate court dismissed the petition.

- Hence, the present recourse where petitioner alleged: XXX

- SCs Ruling: We sustain the questioned decision.

- Petitioner union maintained that the Labor Arbiter and the appellate court disregarded the parol evidence
rule[13] when they upheld the allegation of respondent company that the work schedule of its employees was from
6:00 a.m. to 6:00 p.m. and from 6:00 p.m. to 6:00 a.m. According to petitioner union, the provisions of their CBA
on working hours clearly stated that the normal working hours were from 7:30 a.m. to 4:30 p.m. [14] Petitioner
union underscored that the regular work hours for the company was only eight (8) hours. It further contended
that the Labor Arbiter as well as the Court of Appeal should not have admitted any other evidence contrary to what
was stated in the CBA.

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- The reliance on the parol evidence rule is misplaced. In labor cases pending before the Commission or the Labor
Arbiter, the rules of evidence prevailing in courts of law or equity are not controlling. [15]Rules of procedure and
evidence are not applied in a very rigid and technical sense in labor cases. [16] Hence, the Labor Arbiter is not
precluded from accepting and evaluating evidence other than, and even contrary to, what is stated in, the CBA.

- In any event, the parties stipulated:

Section 1. Regular Working Hours - A normal workday shall consist of not more than eight (8)
hours. The regular working hours for the Company shall be from 7:30 A.M. to 4:30 P.M. The
schedule of shift work shall be maintained; however the company may change the prevailing
work time at its discretion, should such change be necessary in the operations of the
Company. All employees shall observe such rules as have been laid down by the
company for the purpose of effecting control over working hours.[17]

- It is evident from the foregoing provision that the working hours may be changed, at the discretion of the
company, should such change be necessary for its operations, and that the employees shall observe such
rules as have been laid down by the company. In the case before us, Labor Arbiter Caday found that respondent
company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the
demands of its clients. It was established that the employees adhered to the said work schedule since 1988. The
employees are deemed to have waived the eight-hour schedule since they followed, without any question or
complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule
effectively changed the working hours stipulated in the CBA. As the employees assented by practice to this
arrangement, they cannot now be heard to claim that the overtime boycott is justified because they were not
obliged to work beyond eight hours.

- Evidently, from all the foregoing, respondents' unjustified unilateral alteration of the 24-hour work schedule thru their
concerted activities of "overtime boycott" and "work slowdown" from April 16, 1993 up to March 7, 1994, to force the
petitioner company to accede to their unreasonable demands, can be classified as a strike on an installment basis,
as correctly called by petitioner company. xxx[19]

- WHEREFORE, the petition is DENIED DUE COURSE and the 29 December 1999 decision of the Court of
Appeals is AFFIRMED.

Compressed Work Week

Change of Workings Hours:
3. Union Carbide Labor Union (NLU) vs. Union Carbide Phil. Inc. G.R. No. L-41314, November 13, 1992

- ". . . Complainants Agapito Duro, Alfredo Torio, and Rustico Javillonar, were dismissed from their
employment after an application for clearance to terminate them was approved by the Secretary of Labor on
December 19, 1972. Respondents application for clearance was premised on "willful violation of Company
regulations, gross insubordination and refusal to submit to a Company investigation . . ."
- It appears that the Company is operating on three (3) shifts namely: morning, afternoon and night shifts. The
workers in the third shift normally work from Monday to Saturday, the last working day being Friday or forty (40)
hours a week or from Monday to Friday.

Sometime in July 1972 there seems to be a change in the working schedule from Monday to Friday as
contained in the collective bargaining agreement aforecited to Sunday thru Thursday. The change became
effective July 5, 1972. The third shift employees were required to start the new work schedule from Sunday
thru Thursday.
- On November 6, 1972, the night shift employees filed a demand to maintain the old working schedule from
Monday thru Friday.
- In the discussions had, it was arrived at that all night shift operating personnel were allowed to start their work
Monday and on Saturday. This excepted the employees in the maintenance and preparation crews whose work
schedule is presumed to be maintained from Sunday to Thursday. The work schedule between management
representatives and the alleged officers of the Union (Varias group) was approved and disseminated to take effect
November 26, 1972. (Exh. "2" Respondent).
In manifestation of their dissention to the new work schedule, the three respondents Duro, Torio, and Javillonar
did not report for work on November 26, 1972 which was a Sunday since it was not a working day according to
the provisions of the Collective Bargaining Agreement. (Exh. "A" -Complainant). Their absence caused their
suspension for fourteen (14) days."
- On May 4, 1973, the Arbitrator rendered a decision ordering the reinstatement with backwages of the
complainants. On June 8, 1973, the National Labor Relations Commission dismissed respondent companys
appeal for having been filed out of time.
- Hence, this petition.
- Issue:
The main issue in this case is whether or not the complainants could be validly dismissed
from their employment on the ground of insubordination for refusing to comply with the
new work schedule.

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- Petitioner alleges that the change in the companys working schedule violated the existing Collective Bargaining
Agreement of the parties. Hence, complainants cannot be dismissed since their refusal to comply with the re-
scheduled working hours was based on a provision of the Collective Bargaining Agreement.
- SCs Ruling:
The petition has no merit.
Although Article XIX of the CBA provides for the duration of the agreement, which We quote:

"This agreement shall become effective on September 1, 1971 and shall remain in full force and
effect without change until August 31, 1974. Unless the parties hereto agree otherwise,
negotiation for renewal, or renewal and modification, or a new agreement may not be initiated
before July 1, 1974."

this does not necessarily mean that the company can no longer change its working
schedule, for Section 2, Article II of the same CBA expressly provides that:

"SECTION 2. In the exercise of its functions of management, the COMPANY shall have the
sole and exclusive right and power, among other things, to direct the operations and the
working force of its business in all respects; to be the sole judge in determining the capacity
or fitness of an employee for the position or job to which he has been assigned; to schedule the
hours of work, shifts and work schedules; to require work to be done in excess of eight hours or
on Sundays or holidays as the exigencies of the service may require; to plan, schedule, direct,
curtail and control factory operations and schedules of production; to introduce and install new
or improved production methods or facilities; to designate the work and the employees to
perform it; to select and hire new employees; to train new employees and improve the skill and
ability of employees; to make rules and regulations governing conduct and safety; to transfer
employees from one job to another or from one shift to another; to classify or reclassify
employees; and to make such changes in the duties of its employees as the COMPANY may
see fit or convenient for the proper conduct of its business."

Verily and wisely, management retained the prerogative, whenever exigencies of the
service so require, to change the working hours of its employees. And as long as such
prerogative is exercised in good faith for the advancement of the employers interest and
not for the purpose of defeating or circumventing the rights of the employees under special laws
or under valid agreements, this Court will uphold such exercise (San Miguel Brewery Sales
Force Union (PTGWO) v. Ople, 170 SCRA 25 [1989]).

- WHEREFORE, the decision appealed from is hereby AFFIRMED.

4. A. Soriano Aviation vs. Employees Assn. of A. Soriano Aviation, G.R. No. 166879, August 14, 2009

- On May 22, 1997, A. Soriano Aviation (petitioner or the company) which is engaged in providing
transportation of guests to and from Amanpulo and El Nido resorts in Palawan, and respondent Employees
Association of A. Soriano Aviation (the Union), the duly-certified exclusive bargaining agent of the rank and
file employees of petitioner, entered into a Collective Bargaining Agreement (CBA) effective January 1, 1997
up to December 31, 1999. The CBA included a No-Strike, No-Lock-out clause.
- On May 1 & 12, and June 12, 1997, which were legal holidays and peak season for the company, eight
mechanics-members of respondent Union, its herein co-respondents XXX, refused to render overtime work.
- Petitioner treated the refusal to work as a concerted action which is a violation of the No-Strike, No-Lockout
clause in the CBA. It thus meted the workers a 30-day suspension. It also filed on July 31, 1997 a complaint for
illegal strike against them, docketed as NLRC Case No. 07-05409-97, which was later dismissed at its instance in
order to give way to settlement, without prejudice to its re-filing should settlement be unavailing.
- As despite conciliation no amicable settlement of the dispute was arrived at, the Union went on strike on October 22,
- By Decision[1] dated September 28, 1998 rendered in petitioners complaint in NLRC Case No. 07-05409-97, the
Labor Arbiter declared that the newly implemented work-shift schedule was a valid exercise of management
prerogative and the refusal of herein individual respondents to work on three consecutive holidays was a
form of protest by the Union, hence, deemed a concerted action. Noting that the Union failed to comply with the
formal requirements prescribed by the Labor Code in the holding of strike, the strike was declared illegal.
- On appeal, the National Labor Relations Commission (NLRC) affirmed in toto the Labor Arbiters decision, by
Resolution[4] dated October 31, 2001. It held that even if the strike were legal at the onset, the commission of violent
and unlawful acts by individual respondents in the course thereof rendered it illegal.
- By the assailed Decision of April 16, 2004, [6] the appellate court reversed and set aside the NLRC ruling, holding that
the acts of violence committed by the Union members in the course of the strike were not, as compared to the acts
complained of in Shell Oil Workers Union v. Shell Company of the Philippines, [7] First City Interlink Transportation
Co., Inc., v. Roldan-Confesor [8] and Maria Cristina Fertilizer Plant Employees Association v. Tandaya, [9] (this case
was applied by the Labor Arbiter in his Decision of September 28, 2008) where the acts of violence resulted in loss of
employment, concluded that the acts in the present case were not as serious or pervasive as in these immediately-
cited cases to call for loss of employment of the striking employees.
- Issue:
In issue then is whether the strike staged by respondents is illegal due to the alleged
commission of illegal acts and violation of the No Strike-No Lockout clause of the CBA
and, if in the affirmative, whether individual respondents are deemed to have lost their
employment status on account thereof.
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- SCs Ruling:
The Court rules in the affirmative.
- WHEREFORE, the petition is GRANTED. The Court of Appeals Decision and Resolution dated April 16, 2004
and January 25, 2005, respectively, are REVERSED and SET ASIDE. The Resolutions dated October 31, 2001
and December 14, 2001 of the National Labor Relations Commission affirming the Decision of the Labor
Arbiter in NLRC-NCR Case No. 00-06-04890-98 are AFFIRMED with the MODIFICATION in light of the
foregoing discussions.

5. Manila Jockey Club Employees Labor Union vs. Manila Jockey Club Inc. G.R. No. 167760, March 7,

- Petitioner Manila Jockey Club Employees Labor Union-PTGWO and respondent Manila Jockey Club, Inc., a
corporation with a legislative franchise to conduct, operate and maintain horse races, entered into a Collective
Bargaining Agreement (CBA) effective January 1, 1996 to December 31, 2000. The CBA governed the economic
rights and obligations of respondents regular monthly paid rank-and-file employees. [3] In the CBA, the parties agreed
to a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from1:00 p.m. to 5:00 p.m. on a work week of
Monday to Saturday,
- xxx
- Accordingly, overtime on an ordinary working day shall be remunerated in an amount equivalent to the
worker's regular basic wage plus twenty five percent (25%) thereof. Where the employee is permitted or
suffered to work on legally mandated holidays or on his designated rest day which is not a legally
mandated holiday, thirty percent (30%) shall be added to his basic wage for a seven hour work; while
work rendered in excess of seven hours on legally mandated holidays and rest days not falling within the
aforestated categories day shall be additionally compensated for the overtime work equivalent to his rate
for the first seven hours on a legally mandated holiday or rest day plus thirty percent (30%) thereof.
- The CBA likewise reserved in respondent certain management prerogatives, including the determination of
the work schedule,
- On April 3, 1999, respondent issued an inter-office memorandum declaring that, effective April 20, 1999, the
hours of work of regular monthly-paid employees shall be from 1:00 p.m. to 8:00 p.m. when horse races are
held, that zis, every Tuesday and Thursday. The memorandum, however, maintained the 9:00 a.m. to 5:00
p.m. schedule for non-race days.
- Subsequently, before a panel of voluntary arbitrators of the National Conciliation and Mediation Board (NCMB),
petitioner questioned the above office memorandum as violative of the prohibition against non-diminution of
wages and benefits guaranteed under Section 1, Article IV, of the CBA which specified the work schedule of
respondent's employees to be from 9:00 a.m. to 5:00 p.m. Petitioner claimed that as a result of the
memorandum, the employees are precluded (prevented) from rendering their usual overtime work from 5:00 p.m.
to 9:00 p.m.
- The NCMBs panel of voluntary arbitrators, in a decision dated October 18, 2001, upheld respondent's
prerogative to change the work schedule of regular monthly-paid employees under Section 2, Article XI, of the
CBA. Petitioner moved for reconsideration but the panel denied the motion.
- Dissatisfied, petitioner then appealed the panels decision to the CA in CA-G.R. SP No. 69240. In the herein assailed
decision of December 17, 2004, the CA upheld that of the panel and denied petitioners subsequent motion for
reconsideration via its equally challenged resolution of April 4, 2005.
- Hence, petitioners present recourse, raising the following issues:


- SCs Ruling:
Respondent, as employer, cites the change in the program of horse races as reason for the
adjustment of the employees work schedule. It rationalizes that when the CBA was signed, the
horse races started at 10:00 a.m. When the races were moved to 2:00 p.m., there was no other
choice for management but to change the employees' work schedule as there was no work to
be done in the morning. Evidently, the adjustment in the work schedule of the employees
is justified.
We are not unmindful that every business enterprise endeavors to increase profits. As it is, the
Court will not interfere with the business judgment of an employer in the exercise of its
prerogative to devise means to improve its operation, provided that it does not violate
the law, CBAs, and the general principles of justice and fair play. We have thus held that
management is free to regulate, according to its own discretion and judgment, all
aspects of employment, including hiring, work assignments, working methods, time, place
and manner of work, processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, layoff of workers and discipline, dismissal, and recall
of workers.[5]
While it is true that Section 1, Article IV of the CBA provides for a 7-hour work schedule
from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays to Saturdays,

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Section 2, Article XI, however, expressly reserves on respondent the prerogative to
change existing methods or facilities to change the schedules of work. As aptly ruled by
the CA: XXX
- WHEREFORE, the instant petition is DENIED and the assailed decision and resolution of the CA

Art. 84 Hours Worked: Rule 1 Omnibus Rules Implementing the Labor Code.
o Principles in determining hours worked
6. Durabilt Recapping Plant Company vs. NLRC G.R. No. L-76746, July 27, 1987

- On July 11, 1983, a complaint for illegal dismissal was filed by respondent Reynaldo Bodegas, against
petitioner Durabuilt, a tire recapping company.
- In a decision rendered by the Labor Arbiter on February 13, 1984, the private respondent was ordered
reinstated to his former position
- On August 8, 1985, the Acting Chief of Research and Information and the Corporation Auditing Examiner of the then
Ministry of Labor and Employment submitted a computation of backwages, ECOLA, 13th month pay, sick and
vacation leave benefits in favor of Reynaldo Bodegas in the total amount of P24,316.38.
- The petitioner filed its opposition to the computation
- On October 23, 1985, the Labor Arbiter denied the opposition to the computation. The petitioner appealed to
the NLRC which, in an order dated May 16, 1986, affirmed the order of the Labor Arbiter and dismissed the
- SCs Ruling:
Backwages, in general, are granted on grounds of equity for earnings which a worker or
employee has lost due to his dismissal from work (New Manila Candy Workers Union
The general principle is that an employee is entitled to receive as backwages all the
amounts he may have lost starting from the date of his dismissal up to the time of his
reinstatement (Capital Garment Corporation v. Ople, 117 SCRA 473; New Manila Candy
Workers Union (NACONWA-PAFLU) v. CIR, supra).
The age-old rule governing the relation between labor and capital, or management and
employee of a "fair days wage for a fair days labor" remains as the basic factor in
determining employees wages, and for that matter backwages. If there is no work performed
by the employee there can be no wage or pay unless, of course, the laborer was able, willing
and ready to work but was illegally locked out, or suspended (SSS v. SSS Supervisors Union-
CUGCO, 117 SCRA 746).
The illegal dismissal of the private respondent is conceded by the petitioner. It is willing
to pay backwages. However, the petitioner argues that for days where no work was
required and could be done by its employees, no wages could have been earned and,
thereafter, lost by said employees to justify an award of backwages. We quote with approval the
Solicitor Generals comment, ** to wit:
"From the indubitable facts on record, it appears that petitioners have valid reasons to claim that
certain days should not be considered days worked for purposes of computing private
respondents backwages since their business was not in actual operation due to brownouts or
power interruption and the retrenchment of workers they had during the period of private
respondents dismissal.

"Moreover, as early as May 1978, the Ministry of Labor and Employment, thru Policy
Instruction No. 36, has said that

"2. Brownouts running for more than twenty minutes may not be treated as hours worked
provided that any of the following conditions are present;

"a) The employees can leave their work place or go elsewhere whether within or without
the work premises; or

"b) The employees can use the time effectively for their own interest.

"It is of record that during electrical power interruptions, petitioners business was not in
operation. This was never disputed by private Respondent.
Thus, we have held that where the failure of workers to work was not due to the employers
fault, the burden of economic loss suffered by the employees should not be shifted to the
employer. Each party must bear his own loss (SSS v. SSS Supervisors Union-CUGCO,
supra; Pan-American World Airways, Inc. v. CIR, 17 SCRA 813).
Indeed, it would neither be fair nor just to allow respondent to recover something he has not
earned and could not have earned and to further penalize the petitioner company over and
above the losses it had suffered due to lack of raw materials and the energy-saving programs of
the government. The private respondent cannot be allowed to enrich himself at the expense of
the petitioner company. The computation of backwages should be based on daily rather than on
monthly pay schedules where, as in the case at bar, such basis is more realistic and accurate.
(Compania Maritima v. United Seamens Union of the Philippines, 65 SCRA 393).
- WHEREFORE, in view of the foregoing, the petition is hereby GRANTED.

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o Waiting time and working time on call
7. Opulencia Ice Plant and Storage vs. NLRC, G.R. No. 98368, December 15, 1993.

- MANUEL P. ESITA was for twenty (20) years a compressor operator of Tiongson Ice Plant in San Pablo City. In
1980 he was hired as compressor operator-mechanic for the ice plants of petitioner Dr. Melchor Opulencia.

- Initially assigned at the ice plant in Tanauan, Esita would work from seven o'clock in the morning to five o'clock
in the afternoon receiving a daily wage of P35.00.

- In 1986, Esita was transferred to the ice plant in Calamba, which was then undergoing overhauling, taking the
place of compressor operator Lorenzo Eseta, who was relieved because he was already old and weak. For less than
a month, Esita helped in the construction-remodeling of Dr. Opulencia's house.

- On 6 February 1989, for demanding the correct amount of wages due him, Esita was dismissed from service.
- Petitioners deny that Esita is an employee. They claim that Esita could not have been employed in 1980 because
the Tanauan ice plant was not in operation due to low voltage of electricity and that Esita was merely a
helper/peonof one of the contractors they had engaged to do major repairs and renovation of the Tanauan ice plant
in 1986. Petitioners further allege that when they had the Calamba ice plant repaired and expanded, Esita likewise
rendered services in a similar capacity, and thus admitting that he worked as a helper/peon in the repair or
remodeling of Dr. Opulencia's residence in Tanauan.

- On 8 December 1989, Labor Arbiter Nemeriano D. Villena rendered a decision 1 finding the existence of an
employer-employee relationship between petitioners and Esita and accordingly directed them to pay him
P33,518.02 representing separation pay, underpayment of wages, allowances, 13th month, holiday, premium for
holiday, and rest day pays. The claim for overtime pay was however dismissed for lack of basis, i.e., Esita
failed to prove that overtime services were actually rendered.

- On 29 November 1990, the Third Division of the National Labor Relations Commission, in Case No. RAB-IV-2-
2206-89, affirmed the decision of Labor Arbiter Villena but reduced the monetary award to P28,344.60 as it
was not proven that Esita worked every day including rest days and on the days before the legal holidays.
- In this present recourse, petitioners seek reversal of the ruling of public respondents Labor Arbiter and NLRC,
- SCs Ruling:

The instant petition lacks merit, hence, must be dismissed.

The petitioners point out that even granting arguendo that Esita was indeed a mechanic,
he could never be a regular employee because his presence would be required only when
there was a need for repair. We cannot sustain this argument. This circumstance cannot
affect the regular status of employment of Esita. An employee who is required to remain on
call in the employer's premises or so close thereto that he cannot use the time effectively
and gainfully for his own purpose shall be considered as working while on call. 8 In sum,
the determination of regular and casual employment 9 is not affected by the fact that the
employee's regular presence in the place of work is not required, the more significant
consideration being that the work of the employee is usually necessary or desirable in
the business of the employer. More importantly, Esita worked for 9 years and, under the Labor
Code, "any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to that activity in
which he is employed . . . ." 10

The petitioners would give the impression that the repair of the ice plant and the renovation of
the residence of Dr. Opulencia were voluntarily extended by Esita because "[r]espondent did it
on their (sic) own." Unfortunately for petitioners, we cannot permit these baseless assertions to
prevail against the factual findings of public respondents which went through the sanitizing
process of a public hearing. The same observation may be made of the alleged inconsistencies
in Esita's testimonies. Moreover, on the claim that Esita's construction work could not ripen into a
regular employment in the ice plant because the construction work was only temporary and
unrelated to the ice-making business, needless to say, the one month spent by Esita in
construction is insignificant compared to his nine-year service as compressor operator in
determining the status of his employment as such, and considering further that it was Dr.
Opulencia who requested Esita to work in the construction of his house.

- WHEREFORE, there being no grave abuse of discretion on the part of public respondents, the instant
petition is DISMISSED. Accordingly, the restraining order we issued on 13 May 1991 is LIFTED.

8. Arica vs. NLRC 170 SCRA 776

Page 7 of 19
- This case stemmed from a complaint filed on April 9, 1984 against private respondent Stanfilco for assembly
time, moral damages and attorney's fees, with the aforementioned Regional Arbitration Branch No. XI, Davao City.

- Labor Arbiter Pedro C. Ramos rendered a decision dated October 9, 1985 (Annex 'E', Rollo, pp. 51-58) in favor
of private respondent STANFILCO, holding that:

Given these facts and circumstances, we cannot but agree with respondent that the
pronouncement in that earlier case, i.e. the thirty-minute assembly time long practiced
cannot be considered waiting time or work time and, therefore, not compensable, has
become the law of the case which can no longer be disturbed without doing violence to the time-
honored principle of res-judicata.

WHEREFORE, in view of the foregoing considerations, the instant complaint should therefore
be, as it is hereby, DISMISSED.

- On December 12, 1986, after considering the appeal memorandum of complainant and the opposition of
respondents, the First Division of public respondent NLRC

- Public respondent NLRC, on January 30, 1987, issued a resolution denying for lack of merit petitioners' motion for
reconsideration (Annex "K", Rollo, p. 97).

- Hence this petition for review on certiorari filed on May 7, 1987.

- Petitioners contend that the preliminary activities as workers of respondents STANFILCO in the assembly area is
compensable as working time (from 5:30 to 6:00 o'clock in the morning) since these preliminary activities are
necessarily and primarily for private respondent's benefit.

- These preliminary activities of the workers are as follows:

(a) First there is the roll call. This is followed by getting their individual work assignments from
the foreman.

(b) Thereafter, they are individually required to accomplish the Laborer's Daily Accomplishment
Report during which they are often made to explain about their reported accomplishment the
following day.

(c) Then they go to the stockroom to get the working materials, tools and equipment.

(d) Lastly, they travel to the field bringing with them their tools, equipment and materials.

- All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).

- The Minister of Labor held:

The thirty (30)-minute assembly time long practiced and institutionalized by mutual
consent of the parties under Article IV, Section 3, of the Collective Bargaining Agreement
cannot be considered as waiting time within the purview of Section 5, Rule I, Book III of the
Rules and Regulations Implementing the Labor Code. ...

Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the
employees, and the proceedings attendant thereto are not infected with complexities as to
deprive the workers the time to attend to other personal pursuits. They are not new employees
as to require the company to deliver long briefings regarding their respective work assignments.
Their houses are situated right on the area where the farm are located, such that after the roll
call, which does not necessarily require the personal presence, they can go back to their houses
to attend to some chores. In short, they are not subject to the absolute control of the
company during this period, otherwise, their failure to report in the assembly time would justify
the company to impose disciplinary measures. The CBA does not contain any provision to this
effect; the record is also bare of any proof on this point. This, therefore, demonstrates the
indubitable fact that the thirty (30)-minute assembly time was not primarily intended for the
interests of the employer, but ultimately for the employees to indicate their availability or
non-availability for work during every working day. (Annex "E", Rollo, p. 57).

Page 8 of 19
- PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the decision of the National Labor
Relations Commission is AFFIRMED.

9. Pan American World Airways System vs. Pan American Employees Assn. L-16275, February 23, 1961

- Petitioner herein claims that the one-hour meal period should not be considered as overtime work (after
deducting 15 minutes), because the evidence showed that complainants could rest completely and were not in any
manner under the control of the company during that period. The court below found, on the contrary, that during
the so-called meal period, the mechanics were required to stand by for emergency work; that if they
happened not to be available when called, they were reprimanded by the leadman; that as in fact it happened
on many occasions, the mechanics had been called from their meals or told to hurry up eating to perform work
during this period. Far from being unsupported by substantial evidence, the record clearly confirms the above factual
findings of the Industrial Court.
- The Industrial Courts order for permanent adoption of a straight 8-hour shift including the meal period was but a
consequence of its finding that the meal hour was not one of complete rest, but was actually a work hour,
since, for its duration, the laborers had to be on ready call. Of course, if the Company practices in this regard
should be modified to afford the mechanics a real rest during that hour (f. ex., by installing an entirely different
emergency crew, or any similar arrangement), then the modification of this part of the decision may be sought from
the Court below. As things now stand, we see no warrant for altering the decision.
- The judgment appealed from is affirmed. Costs against Appellant.

o Travel Time
Travel from home to work
Travel that is all in the days work
Travel away from home
10. Rada vs. NLRC 205 SCRA 69

- Petitioner's initial employment with this Respondent was under a "Contract of Employment for a Definite
Period" dated July 7, 1977, copy of which is hereto attached and made an integral part hereof as Annex A whereby
Petitioner was hired as "Driver" for the construction supervision phase of the Manila North Expressway
Extension, Second Stage (hereinafter referred to as MNEE Stage 2) for a term of "about 24 months effective July 1,

- Highlighting the nature of Petitioner's employment, Annex A specifically provides as follows:

It is hereby understood that the Employer does not have a continuing need for the services
of the Employee beyond the termination date of this contract and that the Employee's
services shall automatically, and without notice, terminate upon the completion of the above
specified phase of the project;

- Petitioner's first contract of employment expired on June 30, 1979. Meanwhile, the main project, MNEE Stage 2,
was not finished on account of various constraints, not the least of which was inadequate funding, and the same
was extended and remained in progress beyond the original period of 2.3 years. Fortunately for the Petitioner,
at the time the first contract of employment expired, Respondent was in need of Driver for the extended project.
Since Petitioner had the necessary experience and his performance under the first contract of employment was
found satisfactory, the position of Driver was offered to Petitioner, which he accepted. Hence a second Contract of
Employment for a Definite Period of 10 months, that is, from July 1, 1979 to April 30, 1980 was executed between
Petitioner and Respondent on July 7, 1979. . . .

- This third contract of employment was subsequently extended for a number of times, the last extension being for a
period of 3 months, that is, from October 1, 1985 to December 31, 1985, . . .

- Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National Capital Region,
Department of Labor and Employment, a Complaint for non-payment of separation pay and overtime pay.

- Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion amounting
to lack of jurisdiction for the following reasons:


3. The petitioner is a regular employee with eight years and five months of continuous services
for his employer, private respondent Philnor;

Page 9 of 19
4. The claims for overtime services, reinstatement and full backwages are valid and meritorious
and should have been sustained; and

- SCs Ruling:

The petition is devoid of merit.

2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he

cannot be terminated without cause. Private respondent Philnor believes otherwise and asserts
that petitioner is merely a project employee who was terminated upon the completion of the
project for which he was employed.

Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et al. 12 is
applicable to the case at bar. Thus:

We hold that private respondents were project employees whose work was
coterminous (concurrent) with the project or which they were hired. Project
employees, as distinguished from regular or non-project employees, are mentioned in
section 281 of the Labor Code as those "where the employment has been fixed
for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee."

Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer-
employee relations in the construction industry, provides:

Project employees are those employed in connection with a particular

construction project. Non-project (regular) employees are those employed by a
construction company without reference to any particular project.

Project employees are not entitled to termination pay if they are terminated as a
result of the completion of the project or any phase thereof in which they are
employed, regardless of the number of projects in which they have been employed by
a particular construction company. Moreover, the company is not required to obtain
clearance from the Secretary of Labor in connection with such termination.

It must be stressed herein that although petitioner worked with Philnor as a driver for eight
years, the fact that his services were rendered only for a particular project which took that
same period of time to complete categorizes him as a project employee. Petitioner was
employed for one specific project.

From the foregoing, it is clear that petitioner is a project employee considering that he does not
belong to a "work pool" from which the company would draw workers for assignment to other
projects at its discretion. It is likewise apparent from the facts obtaining herein that petitioner
was utilized only for one particular project, the MNEE Stage 2 Project of respondent
company. Hence, the termination of herein petitioner is valid by reason of the completion
of the project and the expiration of his employment contract.

3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the
same. The fact that he picks up employees of Philnor at certain specified points along
EDSA in going to the project site and drops them off at the same points on his way back
from the field office going home to Marikina, Metro Manila is not merely incidental to
petitioner's job as a driver. On the contrary, said transportation arrangement had been
adopted, not so much for the convenience of the employees, but primarily for the benefit of the
employer, herein private respondent.

Private respondent does not hesitate to admit that it is usually the project driver who is tasked
with picking up or dropping off his fellow employees. Proof thereof is the undisputed fact that
when petitioner is absent, another driver is supposed to replace him and drive the vehicle and
likewise pick up and/or drop off the other employees at the designated points on EDSA. If driving
these employees to and from the project site is not really part of petitioner's job, then there
would have been no need to find a replacement driver to fetch these employees. But since the
assigned task of fetching and delivering employees is indispensable and consequently
mandatory, then the time required of and used by petitioner in going from his residence
to the field office and back, that is, from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to
around 6:00 p.m., which the labor arbiter rounded off as averaging three hours each

Page 10 of 19
working day, should be paid as overtime work. Quintessentially, petitioner should be given
overtime pay for the three excess hours of work performed during working days from
January, 1983 to December, 1985.

- WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the
decision appealed from is AFFIRMED in all other respects.

o Preliminary and Postliminary Activities

o Attendance in lectures, meetings and training programs
11. Sugue vs. Triumph International, January 30, 2009

- Consolidated petitions.
- In G.R. No. 164804, petitioners Virginia Sugue (Sugue) and the Heirs of Renato Valderrama (Valderrama) question
the CA decision which partly granted their appeal but deleted the attorneys fees and reduced the moral and
exemplary damages awarded to them.
- On the other hand, in G.R. No. 164784, petitioner Triumph International (Phils.), Inc. (Triumph hereafter) assails the
CA decision for setting aside an earlier decision[3] of the National Labor Relations Commission (NLRC) dated June
13, 2001 which ruled in its favor.
- The antecedents of the case show that Triumph hired Sugue in May 1990 as its Assistant Manager for
Marketing and was subsequently promoted to Marketing Services Manager with a monthly salary
of P82,500.00. On the other hand, Valderrama was hired in April 1993 as Direct Sales Manager with a monthly
salary of P121,000.00. Their main function/responsibility was to ensure that the companys sales targets and
objectives were met.
- On June 1, 2000, Sugue and Valderrama filed a complaint with the NLRC against Triumph for payment of
money claims arising from allegedly unpaid vacation and sick leave credits, birthday leave and 14 th month
pay for the period 1999-2000.
- On June 19, 2000, Sugue and Valderrama personally attended the preliminary conference of the said case. The
following day, a memorandum was issued by Triumphs Managing Director/General Manager, Alfredo Escueta,
reminding all department heads of existing company policy that requires department heads to notify him (Escueta)
before leaving the office during work hours.[6] That same day, Triumphs Personnel Manager, Ralph Funtila, issued
separate memoranda to Sugue and Valderrama requiring them to inform the office of the General Manager of their
whereabouts on June 19, 2000 from 9:06 a.m. to 11:15 a.m. They replied that they attended the aforementioned
preliminary conference.[7]
- On June 23, 2000, Valderrama and Sugue were directed to submit a written explanation as to why they used
company time and the company vehicle and driver in attending the preliminary conference at the NLRC and why
they left the office without advising the Managing Director. They explained that they believed they may use
company time and the company vehicle since the hearing they attended was pursuant to a complaint that
they filed as employees of the company.
- On June 28, 2000, Triumph charged the one-half day utilized by Sugue and Valderrama in attending the NLRC
hearing on June 19, 2000 to their vacation leave credits.
- On March 15, 2001, Labor Arbiter Salimathar Nambi rendered a decision, declaring that Sugue and Valderrama were
constructively dismissed.
- Aggrieved, Triumph filed an appeal with the NLRC, [17] and in a decision dated June 13, 2001, the First Division of the
NLRC granted the appeal and reversed the ruling of Labor Arbiter Nambi.
- Not satisfied with the NLRC decision, Sugue and Valderrama elevated the matter to the CA by way of a petition for
certiorari, which partially granted the petition, setting aside the decision of the NLRC and reinstating that of the Labor
- Hence, the parties filed the present petitions which were consolidated by this Court in a Resolution
dated September 27, 2004.[20]
- SCs Ruling:
After a thorough review of the evidence on record, we find sufficient reasons to uphold
Triumphs position.
With respect to the first alleged discriminatory act, we can conceive of no reason to ascribe
bad faith or malice to Triumph for charging to the leave credits of Sugue and Valderrama
the half-day that they spent in attending the preliminary conference of the case they
instituted against Triumph. It is fair and reasonable for Triumph to do so considering that Sugue
and Valderrama did not perform work for one-half day on June 19, 2000.
- Indeed, we find it surprising that Sugue and Valderrama would even have the temerity to contend that the hours they
spent in attending the hearing were compensable time. As the NLRC correctly pointed out, as early as the case
of J.B. Heilbronn Co. v. National Labor Union,[29] this Court held that:

When the case of strikes, and according to the CIR even if the strike is legal, strikers may not
collect their wages during the days they did not go to work, for the same reasons if not
more, laborers who voluntarily absent themselves from work to attend the hearing of a
case in which they seek to prove and establish their demands against the company, the
legality and propriety of which demands is not yet known, should lose their pay during
the period of such absence from work. The age-old rule governing the relation between
labor and capital or management and employee is that a "fair day's wage for a fair day's
labor." If there is no work performed by the employee there can be no wage or pay, unless of
course, the laborer was able, willing and ready to work but was illegally locked out, dismissed or

Page 11 of 19
suspended. It is hardly fair or just for an employee or laborer to fight or litigate against his
employer on the employer's time.
In a case where a laborer absents himself from work because of a strike or to attend a
conference or hearing in a case or incident between him and his employer, he might seek
reimbursement of his wages from his union which had declared the strike or filed the case in the
industrial court. Or, in the present case, he might have his absence from his work charged
against his vacation leave. xxx (Emphasis ours)
- This doctrine in Heilbronn was reiterated in Manila Trading & Supply Co. v. Manila Trading Labor Association [30] and
quoted favorably in later cases.[31] Triumph is, thus, justified in charging Sugue and Valderramas half-day
absence to their vacation leave credits.

- WHEREFORE, the petition for review filed by Virginia Sugue and the Heirs of Renato Valderrama in G.R. No.
164804 is DENIED while the petition for review filed by Triumph International (Phils.), Inc. in G.R. No.
164784 is GRANTED. Accordingly, the assailed decision and resolution of the Court of Appeals are
hereby REVERSED and SET ASIDE. The National Labor Relations Commissions Decision dated June 13,

o Attendance in CBA Negotiations

o Attendance or participation in strikes or pickets
o Working time of sea based workers or seamen
o Semestral Breaks
12. University of Pangasinan Faculty Union vs. Univesity of Pangasinan, February 20, 1984.

- Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan, an
educational institution duly organized and existing by virtue of the laws of the Philippines.
- On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed a complaint against
the private respondent with the Arbitration Branch of the NLRC, Dagupan District Office, Dagupan City. The
complaint seeks: (a) the payment of Emergency Cost of Living Allowances (ECOLA) for November 7 to
December 5, 1981, a semestral break; (b) salary increases from the sixty (60%) percent of the incremental
proceeds of increased tuition fees; and (c) payment of salaries for suspended extra loads.
- The petitioners members are full-time professors, instructors, and teachers of respondent University. The
teachers in the college level teach for a normal duration of ten (10) months a school year, divided into two (2)
semesters of five (5) months each, excluding the two (2) months summer vacation. These teachers are paid their
salaries on a regular monthly basis.
- In November and December, 1981, the petitioners members were fully paid their regular monthly salaries. However,
from November 7 to December 5, during the semestral break, they were not paid their ECOLA. T he private
respondent claims that the teachers are not entitled thereto because the semestral break is not an integral part of
the school year and there being no actual services rendered by the teachers during said period, the principle
of "No work, no pay" applies.
- Issue:



- SCs Ruling:

Anent the first issue, the various Presidential Decrees on ECOLAs to wit: PDs 1614, 1634, 1678 and
1713, provide on "Allowances of Fulltime Employees . . ." that "Employees shall be paid in full the required
monthly allowance regardless of the number of their regular working days if they incur no absences during
the month. If they incur absences without pay, the amounts corresponding to the absences may be
deducted from the monthly allowance . . ." ; and on "Leave of Absence Without Pay", that "All covered
employees shall be entitled to the allowance provided herein when they are on leave of absence with pay."

It is beyond dispute that the petitioners members are full-time employees receiving their monthly salaries
irrespective of the number of working days or teaching hours in a month. However, they find themselves in
a most peculiar situation whereby they are forced to go on leave during semestral breaks. These
semestral breaks are in the nature of work interruptions beyond the employees control. The
duration of the semestral break varies from year to year dependent on a variety of circumstances affecting
at times only the private respondent but at other times all educational institutions in the country. As such,
these breaks cannot be considered as absences within the meaning of the law for which
deductions may be made from monthly allowances. The "No work, no pay" principle does not
apply in the instant case. The petitioners members received their regular salaries during this period. It is
clear from the aforequoted provision of law that it contemplates a "no work" situation where the employees
voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem, absent
themselves during semestral breaks. Rather, they are constrained to take mandatory leave from
work. For this they cannot be faulted nor can they be begrudged that which is due them under the law. To
a certain extent, the private respondent can specify dates when no classes would be held. Surely, it was
not the intention of the framers of the law to allow employers to withhold employee benefits by the simple
expedient of unilaterally imposing "no work" days and consequently avoiding compliance with the mandate
of the law for those days.

Page 12 of 19
The petitioners members in the case at bar, are exactly in such a situation. The semestral break
scheduled is an interruption beyond petitioners control and it cannot be used "effectively nor
gainfully in the employees interest. Thus, the semestral break may also be considered as "hours
worked." For this, the teachers are paid regular salaries and, for this, they should be entitled to ECOLA.
- WHEREFORE the petition for certiorari is hereby GRANTED. The private respondent is ordered to pay its
regular fulltime teachers/employees emergency cost of living allowances for the semestral break from
November 7 to December 5, 1981 and the undistributed balance of the sixty (60%) percent incremental
proceeds from tuition increases for the same schoolyear as outlined above. The respondent Commission is
sustained insofar as it DENIED the payment of salaries for the suspended extra loads on September 21,

13. Sibal vs. Notre Dame of Greater Manila, G.R. No. 75093, February 23, 1990

- Petitioner Delia R. Sibal was employed as school nurse by private respondent Notre Dame of Greater Manila
starting January 1973. Prior to school year 1976-1977, she was compensated on a 12-month basis, although
she worked only during the ten-month period of classes. She was not required to report for work for the
entire Christmas and summer vacations. However, on March 10, 1976, respondent's director, Fr. Enrique
Gonzales, requested her to shorten her summer vacation, from two weeks after the last day of classes to two
weeks before the first day of classes of the next school year. Petitioner acceded to the request
- Sometime in April 1980, Fr. Gonzales required petitioner to report during that summer to help in the library. In
a letter dated April 11, 1980, petitioner contested the order, stating that it will necessitate a change in the terms
and conditions of her employment and that library work is alien to her profession as nurse (Rec. p. 45). Fr.
Gonzales relented.
- In November 1980, Fr. Gonzales was replaced by Fr. Pablo Garcia, an American, as new director. Fr. Garcia
required petitioner to report for work during the summer before the beginning of school year 1981-1982.
Petitioner informed him that her contract does not require her to report for work during the summer vacation. Fr.
Garcia promised to verify her allegation. However, he failed to inform petitioner of his findings. Thus, in order that her
failure to report for work may not be misinterpreted, petitioner filed leaves of absence extending from April 1, 1981 to
June 14, 1981 (Rec. pp. 223-225). Petitioner failed to receive her vacation pay.

- During school year 1981-1982, petitioner was assigned to teach health subjects to 900 students spread out
in nineteen (19) sections of the entire high school department. This situation came about because the two (2)
teachers of the health subjects had left the school. Petitioner, however, was not given compensation for
teaching, notwithstanding the fact that other teachers were duly compensated for extra work done. During that
school year petitioner tried to arrange for a meeting with Fr. Garcia regarding her vacation pay, but to no avail
because Fr. Garcia was always busy. In October 1981, Fr. Garcia suffered a heart attack which necessitated his
hospitalization. In December 1981, petitioner received her 13th month pay which was computed on the basis of a 10-
month period only.

- Failing to receive the compensation demanded, May 10, 1982, petitioner filed a complaint for non-payment of
the following; (1) vacation pay for four (4) summer months; (2) compensation for teaching health subjects;
and (3) deficiency in the 13th month pay for 1981.
- Petitioner was terminated from work and filed a petition.
- SCs Ruling:

This Court finds merit in the petition.

The Solicitor General who normally and expectedly speaks for the NLRC has ably refuted the position
taken by the latter. The Court thus finds valid and decisive the following submission of the Solicitor

It is submitted, however, that petitioner is entitled to compensation for teaching health

subjects. Although the subject taught is Health and allied to her profession, and is taught during
regular working hours, petitioner's teaching the subject in the classroom and her administering to
the health needs of students in the clinic involve two different and distinct jobs. They cannot be
equated with each other for they refer to different functions. Teaching requires preparation of
lesson plans, examinations and grades, while clinical work entails preparation of clinical records
and treating illnesses of students in school. There can be no doubt that teaching health
subjects is extra work for petitioner, and therefore necessitates extra compensation. After
all it has been the practice of the school to pay extra compensation to teachers who were
given extra load even during regular working hours (Annex G of Annex F, Petition). The fact
that respondent school failed to produce the records of those teachers prove that they were paid
for extra work. Hence, petitioner should likewise be paid compensation. (pp. 138-139, Rollo)

It must be noted that petitioner has established that in several precedents, non-teaching personnel of
respondent school who were made to handle teaching jobs were actually paid actual compensation.
Besides, justice and equity demand that since the principle of equal work has long been observed in this
jurisdiction, then it should follow that an extra pay for extra work should also be applied.

Page 13 of 19
Significantly, this Court has enunciated in the care of University of Pangasinan Faculty Union v.
University of Pangasinan (127 SCRA 691) that semestral breaks may be considered as "hours
worked" under the Rules implementing the Labor Code and that regular professors and teachers
are entitled to ECOLA during the semestral breaks, their "absence" from work not being of their
own will.

- WHEREFORE, the appealed decision of respondent NLRC is hereby SET ASIDE. Private respondent is
hereby ordered to REINSTATE petitioner to her former position without loss of seniority rights and with
backwages for three (3) years from the time of her illegal dismissal; to pay her the regular extra
compensation relative to her teaching health subjects; and to pay her moral damages, the amount of which
shall be determined by respondent NLRC. Let this case be remanded to the NLRC for the proper
implementation of this decision.

o Work interruptions due to brown-outs

14. Durabilt Recapping Plant Company vs. NLRC G.R. No. L-76746, July 27, 1987


o Burden of proving hours worked.

o Seaman
15. Cagampan vs. NLRC, March 22, 1994

- "On April 17 and 18, 1985, Petitioners, all seamen, entered into separate contracts of employment with the
Golden Light Ocean Transport, Ltd., through its local agency, private respondent ACE MARITIME AGENCIES,
INC. Petitioners, with their respective ratings and monthly salary rates, are as follows: XXX
- "Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986.

"Thereafter, petitioners collectively and or individually filed complaints for non-payment of overtime pay,
vacation pay and terminal pay against private Respondent. In addition, they claimed that they were made to sign
their contracts in blank. Likewise, petitioners averred that although they agreed to render services on board the
vessel Rio Colorado managed by Golden Light Ocean Transport, Ltd., the vessel they actually boarded was MV
SOIC I managed by Columbus Navigation. Two (2) petitioners, Jorge de Castro and Juanito de Jesus, charged that
although they were employed as ordinary seamen (OS), they actually performed the work and duties of Able
Seamen (AB).
- "On August 5, 1987, the Philippine Overseas Employment Administration (POEA) rendered a Decision
dismissing petitioners claim for terminal pay but granted their prayer for leave pay and overtime pay.
- Private respondent appealed the POEAs decision to the NLRC which reversed and set aside the decision.
- Hence, this appeal from the decision and resolution of the respondent NLRC.
- Petitioners allege that respondent Commission gravely abused its discretion or erred in deciding in favor of private
respondent company by reason of the following: xxx
- SCs Ruling:
We cannot sustain petitioners position.
On the issue of whether or not petitioners should be entitled to terminal pay, We sustain the finding
of respondent NLRC that petitioners were actually paid more than the amounts fixed in their
employment contracts. The pertinent portion of the NLRC decision reads as follows.
As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the payment
of said pay because it merely straightened out the distorted interpretation asserted by petitioners and
defined the correct interpretation of the provision on overtime pay embodied in the contract conformably
with settled doctrines on the matter. Notably, the NLRC ruling on the disallowance of overtime pay is ably
supported by the fact that petitioners never produced any proof of actual performance of overtime work.
Petitioners have conveniently adopted the view that the "guaranteed or fixed overtime pay of 30% of the
basic salary per month" embodied in their employment contract should be awarded to them as part of a
"package benefit." They have theorized that even without sufficient evidence of actual rendition of
overtime work, they would automatically be entitled to overtime pay. Their theory is erroneous for
being illogical and unrealistic. Their thinking even runs counter to the intention behind the provision. The
contract provision means that the fixed overtime pay of 30% would be the basis for computing the
overtime pay if and when overtime work would be rendered. Simply, stated, the rendition of
overtime work and the submission of sufficient proof that said work was actually performed are
conditions to be satisfied before a seaman could be entitled to overtime pay which should be
computed on the basis of 30% of the basic monthly salary. In short, the contract provision guarantees
the right to overtime pay but the entitlement to such benefit must first be established. Realistically
speaking, a seaman, by the very nature of his job, stays on board a ship or vessel beyond the regular
eight-hour work schedule. For the employer to give him overtime pay for the extra hours when he might be
sleeping or attending to his personal chores or even just lulling away his time would be extremely unfair
and unreasonable.

We already resolved the question of overtime pay of a worker aboard a vessel in the case of National
Shipyards and Steel Corporation v. CIR (3 SCRA 890). We ruled:

"We can not agree with the Court below that respondent Malondras should be paid overtime

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compensation for every hour in excess of the regular working hours that he was on board his vessel
or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen
are required to stay on board their vessels by the very nature of their duties, and it is for this reason
that, in addition to their regular compensation, they are given free living quarters and subsistence
allowances when required to be on board. It could not have been the purpose of our law to require
their employers to pay them overtime even when they are not actually working; otherwise, every
sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he spent all
those hours resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in
determining whether or not sailors are entitled to overtime pay is not, therefore, whether they
were on board and can not leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said number of hours. (Emphasis supplied).
- WHEREFORE, the decision of the NLRC is hereby AFFIRMED with the modification that petitioners
Cagampan and Vicera are awarded their leave pay according to the terms of the contract.

Art. 85 Meal Periods.

16. Philippine Airlines vs. NLRC 302 SCRA 582 (1999)

- Petitioner Philippine Airlines, Inc. assails the decision of the National Labor Relations Commission
dismissing its appeal from the decision of Labor Arbiter Romulus S. Protacio which declared the suspension
of private respondent Dr. Herminio A. Fabros illegal and ordered petitioner to pay private respondent the amount
equivalent to all the benefits he should have received during his period of suspension plus P500,000.00 moral

- Private respondent was employed as flight surgeon at petitioner company. He was assigned at the PAL
Medical Clinic at Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight.

- On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic to have his dinner at
his residence, which was about five-minute drive away. A few minutes later, the clinic received an emergency
call from the PAL Cargo Services. One of its employees, Mr. Manuel Acosta, had suffered a heart attack. The
nurse on duty, Mr. Merlino Eusebio, called private respondent at home to inform him of the emergency. The patient
arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately rushed him to the hospital. When private
respondent reached the clinic at around 7:51 in the evening, Mr. Eusebio had already left with the patient. Mr.
Acosta died the following day.

- In his explanation, private respondent asserted that he was entitled to a thirty-minute meal break; that he
immediately left his residence upon being informed by Mr. Eusebio about the emergency and he arrived at the clinic
a few minutes later; that Mr. Eusebio panicked and brought the patient to the hospital without waiting for him.

- Private respondent filed a complaint for illegal suspension against petitioner.

- On July 16, 1996, Labor Arbiter Romulus A. Protasio rendered a decision [1] declaring the suspension of private
respondent illegal.

- Petitioner appealed to the NLRC. The NLRC, however, dismissed the appeal after finding that the decision of the
Labor Arbiter is supported by the facts on record and the law on the matter. [3] The NLRC likewise denied petitioners
motion for reconsideration.[4]

- Hence, this petition.

- SCs Ruling:

Petitioner argues that being a full-time employee, private respondent is obliged to stay in the company
premises for not less than eight (8) hours. Hence, he may not leave the company premises during such
time, even to take his meals.

We are not impressed.

Articles 83 and 85 of the Labor Code read:

Art. 83. Normal hours of work.The normal hours of work of any employee shall not exceed
eight (8) hours a day.

Health personnel in cities and municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall
hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of
time for meals, except where the exigencies of the service require that such personnel work for
six (6) days or forty-eight (48) hours, in which case they shall be entitled to an additional
compensation of at least thirty per cent (30%) of their regular wage for work on the sixth day. For
purposes of this Article, health personnel shall include: resident physicians, nurses, nutritionists,
dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other hospital or clinic personnel. (emphasis

Page 15 of 19
Art. 85. Meal periods.Subject to such regulations as the Secretary of Labor may prescribe, it shall be
the duty of every employer to give his employees not less than sixty (60) minutes time-off for
their regular meals.

- Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:

Sec. 7. Meal and Rest Periods. Every employer shall give his employees, regardless of sex, not
less than one (1) hour time-off for regular meals, except in the following cases when a meal
period of not less than twenty (20) minutes may be given by the employer provided that such
shorter meal period is credited as compensable hours worked of the employee;

(a) Where the work is non-manual work in nature or does not involve strenuous physical

(b) Where the establishment regularly operates not less than sixteen hours a day;

(c) In cases of actual or impending emergencies or there is urgent work to be performed

on machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and

(d) Where the work is necessary to prevent serious loss of perishable goods.

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered
as compensable working time.

Thus, the eight-hour work period does not include the meal break. Nowhere in the law may
it be inferred that employees must take their meals within the company premises. Employees
are not prohibited from going out of the premises as long as they return to their posts on
time. Private respondents act, therefore, of going home to take his dinner does not constitute

- IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The portion of the assailed decision awarding
moral damages to private respondent is DELETED. All other aspects of the decision are AFFIRMED.

17. Sime Darby Pilipinas, Inc. vs. NLRC, G.R. No. 119205, April 15, 1998

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

- Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and other rubber
products. Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, is an association of
monthly salaried employees of petitioner at its Marikina factory. Prior to the present controversy, all company
factory workers in Marikina including members of private respondent union worked from 7:45 a.m. to 3:45
p.m. with a 30 minute paid on call lunch break.

- On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its monthly salaried
employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department working on
shifts, a change in work schedule:

New work schedule: 7:45 A.M. 4:45 P.M. (Monday to Friday) and 7:45 A.M. 11:45 P.M. (Saturday).

Coffee break time will be ten minutes only anytime between: 9:30 A.M. 10:30 A.M. and 2:30 P.M. 3:30

Lunch break will be between: 12:00 NN 1:00 P.M. (Monday to Friday).

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

Page 16 of 19
- Private respondent appealed to respondent National Labor Relations Commission (NLRC) which sustained the
Labor Arbiter and dismissed the appeal.[4] However, upon motion for reconsideration by private respondent, the
NLRC, this time with two (2) new commissioners replacing those who earlier retired, reversed its earlier decision of
20 April 1994 as well as the decision of the Labor Arbiter. [5]
- SCs Ruling:

We agree, hence, we sustain petitioner. The right to fix the work schedules of the employees rests
principally on their employer. In the instant case petitioner, as the employer, cites as reason for the
adjustment the efficient conduct of its business operations and its improved production. [6] It rationalizes that
while the old work schedule included a 30-minute paid lunch break, the employees could be called upon to
do jobs during that period as they were on call. Even if denominated as lunch break, this period could very
well be considered as working time because the factory employees were required to work if necessary and
were paid accordingly for working. With the new work schedule, the employees are now given a one-hour
lunch break without any interruption from their employer. For a full one-hour undisturbed lunch break, the
employees can freely and effectively use this hour not only for eating but also for their rest and comfort
which are conducive to more efficiency and better performance in their work. Since the employees are no
longer required to work during this one-hour lunch break, there is no more need for them to be
compensated for this period. We agree with the Labor Arbiter that the new work schedule fully
complies with the daily work period of eight (8) hours without violating the Labor Code. [7] Besides,
the new schedule applies to all employees in the factory similarly situated whether they are union
members or not.[8]

- WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations Commission dated
29 November 1994 is SET ASIDE and the decision of the Labor Arbiter dated 26 November 1993 dismissing
the complaint against petitioner for unfair labor practice is AFFIRMED.

Art. 86 Night Shift Differential

18. Mercury Drug Co., Inc. vs. Dayao, G.R. No. L-30452, September 30, 1982

- This is a verified petition dated March 17, 1964 which was subsequently amended on July 31, 1964 filed by Nardo
Dayao and 70 others against Mercury Drug Co., Inc., and/or Mariano Que, President & General Manager, and
Mercury Drug Co., Inc., Employees Association praying, with respect to respondent corporation and its president and
general manager: 1) payment of their unpaid back wages for work done on Sundays and legal holidays plus 25c/c
additional compensation from date of their employment up to June 30, 1962; 2) payment of extra compensation
on work done at night; 3) reinstatement of Januario Referente and Oscar Echalar to their former positions with
back salaries; and, as against the respondent union, for its disestablishment and the refund of all monies it had
collected from petitioners.

- After hearing on the merits, the respondent court rendered its decision. The dispositive portion of the March 30, 1968
decision reads:


2. Respondent Mercury Drug Company, Inc.. is hereby ordered to pay the sixty- nine (69) petitioners:

(a) An additional sum equivalent to 25% of their respective basic or regular salaries for services
rendered on Sundays and legal holidays during the period from March 20. 1961 up to June 30, 1962;

(b) Another additional sum or premium equivalent to 25% of their respective basic or regular
salaries for nighttime services rendered from March 20, 1961 up to June 30, 1962.

- SCs Ruling:

After the passage of Republic Act 875, this Court has not only upheld the industrial court's assumption of
jurisdiction over cases for salary differentials and overtime pay [Chua Workers Union (NLU) vs. City
Automotive Co., et al., G.R. No. L- 11655, April 29, 1959; Prisco vs. CIR, et al., G.R. No. L-13806, May 23,
1960] or for payment of additional compensation for work rendered on Sundays and holidays and
for night work [Nassco vs. Almin, et al., G.R. No. L9055, November 28, 1958; Detective & Protective
Bureau, Inc. vs. Felipe Guevara, et al., G.R. No. L-8738, May 31, 1957] but has also supported such
court's ruling that work performed at night should be paid more than work done at daytime, and that
if that work is done beyond the worker's regular hours of duty, he should also be paid additional
compensation for overtime work. [Naric vs. Naric Workers' Union. et al., G. R No. L-12075, May 29,
1959, citing Shell Co. vs. National Labor Union, 81 Phil. 315]. Besides, to hold that this case for extra

Page 17 of 19
compensation now falls beyond the powers of the industrial court to decide, would amount to a further
curtailment of the jurisdiction of said court to an extent which may defeat the purpose of the Magna Carta
to the prejudice of labor.' [Luis Recato Dy, et al v-9. CIR, G.R. No. L-17788, May 25,1962]"

The petitioner-company's arguments on the respondent court's alleged lack of jurisdiction over
additional compensation for work done at night by the respondents is without merit.

The respondent court's ruling on additional compensation for work done at night is, therefore, not without
evidence. Moreover, the petitioner-company did not deny that the private respondents rendered nighttime
work. In fact, no additional evidence was necessary to prove that the private respondents were entitled to
additional compensation for whether or not they were entitled to the same is a question of law which the
respondent court answered correctly. The "waiver rule" is not applicable in the case at bar. Additional
compensation for nighttime work is founded on public policy, hence the same cannot be waived.
(Article 6, Civil Code). On this matter, We believe that the respondent court acted according to justice and
equity and the substantial merits of the case, without regard to technicalities or legal forms and should be

The Mercury Drug Co., Inc., maintains a chain of drugstores that are open every day of the week and, for
some stores, up to very late at night because of the nature of the pharmaceutical retail business. The
respondents knew that they had to work Sundays and holidays and at night, not as exceptions to
the rule but as part of the regular course of employment. Presented with contracts setting their
compensation on an annual basis with an express waiver of extra compensation for work on Sundays and
holidays, the workers did not have much choice. The private respondents were at a disadvantage insofar
as the contractual relationship was concerned. Workers in our country do not have the luxury or freedom of
declining job openings or filing resignations even when some terms and conditions of employment are not
only onerous and inequitous but illegal. It is precisely because of this situation that the framers of the
Constitution embodied the provisions on social justice (Section 6, Article 11) and protection to labor
(Section 9, Article I I) in the Declaration of Principles And State Policies.

- WHEREFORE, the petition is hereby dismissed. The decision and resolution appealed from are affirmed with
costs against the petitioner.

19. Lepanto Consolidated Mining Co. vs. Lepanto Local Staff Union 562 SCRA 495 (August 2008)

- Lepanto Consolidated Mining Company[4] (petitioner) is a domestic mining corporation. Lepanto Local Staff Union
(respondent) is the duly certified bargaining agent of petitioners employees occupying staff positions.
- On 28 November 1998, petitioner and respondent entered into their fourth Collective Bargaining Agreement
(4th CBA) for the period from 1 July 1998 to 30 June 2000. The 4thCBA provides:

Section 3. Night Differential pay. - The Company shall continue to pay nightshift differential for work
during the first and third shifts to all covered employees within the bargaining unit as follows:

For the First Shift (11:00 p.m. to 7:00 a.m.), the differential pay will be 20% of the basic rate. For the
Third Shift (3:00 p.m. to 11:00 p.m.), the differential pay will be 15% of the basic rate.

However, for overtime work, which extends beyond the regular day shift (7:00 a.m. to 3:00 p.m.), there
[will] be no night differential pay added before the overtime pay is calculated.
- On 23 April 2000, respondent filed a complaint with the National Conciliation and Mediation Board, Cordillera
Administrative Region (NCMB-CAR) alleging that petitioner failed to pay the night shift differential and
longevity pay of respondents members as provided in the 4 th CBA. Petitioner and respondent failed to amicably
settle the dispute.They agreed to submit the issues to Voluntary Arbitrator Norma B. Advincula (Voluntary Arbitrator)
for resolution.
- In a Decision dated 26 May 2000,[6] the Voluntary Arbitrator ruled in favor of respondent.
- Petitioner filed a petition for review before the Court of Appeals. In its 22 July 2003 Decision, the Court of Appeals
affirmed the Voluntary Arbitrators Decision.
- Petitioner filed a motion for reconsideration. In its 20 January 2004 Resolution, the Court of Appeals denied the
motion for lack of merit.
- Hence, the petition before this Court.
- Issue:
Whether the Court of Appeals erred in affirming the Voluntary Arbitrators interpretation of the 4 th CBA that
the employees in the second shift are entitled to night shift differential.
- SCs Ruling:
The petition has no merit.
The terms and conditions of a collective bargaining contract constitute the law between the parties. [9] If the
terms of the CBA are clear and have no doubt upon the intention of the contracting parties, the literal
meaning of its stipulation shall prevail.[10]
There is no question that workers are entitled to night shift differential of 20% of the basic rate for work
performed during the first shift from 11:00 p.m. to 7:00 a.m. Workers are also entitled to night shift

Page 18 of 19
differential of 15% of the basic rate for work performed during the third shift from 3:00 p.m. to 11:00
p.m. The issue is whether workers are entitled to night shift differential for work performed beyond
the regular day shift, from 7:00 a.m. to 3:00 p.m.
We sustain the interpretation of both the Voluntary Arbitrator and the Court of Appeals. The first
paragraph of Section 3 provides that petitioner shall continue to pay night shift differential to workers
of the first and third shifts. It does not provide that workers who performed work beyond the
second shift shall not be entitled to night shift differential. The inclusion of the third paragraph is not
intended to exclude the regular day shift workers from receiving night shift differential for work performed
beyond 3:00 p.m. It only provides that the night shift differential pay shall be excluded in the
computation of the overtime pay.
It affirms the intention of the parties to the CBA to grant night shift differential for work performed
beyond 3:00 p.m.
- WHEREFORE, we DENY the petition. We AFFIRM the 22 July 2003 Decision and 20 January 2004 Resolution
of the Court of Appeals in CA-G.R. SP No. 60644. Costs against petitioner.

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