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Statutory

Reference:
Art. 91 to 96 of the Labor Code and related provisions in the Omnibus Rules
RA 8187 Paternity Leave Act
RA 8282 Maternity Leave Act
RA 8972 Solo Parents' Welfare Act
Cases:
Mantrade vs Bacungan, 144 SCRA 510,
GR L-48437, Sep. 30, 1986
Asian Transunion vs CA, 425 SCRA 478,
GR 144664, Mar. 15, 2004
Jose Rizal College vs NLRC, 156 SCRA 27,
GR L-65482, December 1, 1987
Union of Filipino Employees vs. Vivar,
205 SCRA 200, GR 79255, January 20, 1992
Agga vs NLRC, 298 SCRA 285,
GR 123882, Nov. 16, 1998
MANTRADE/FMMC DIVISION EMPLOYEES AND WORKERS UNION (represented by PHILIPPINE SOCIAL
SECURITY LABOR UNION PSSLU Fed. TUCP), Petitioner, v. ARBITRATOR FROILAN M. BACUNGAN
and MANTRADE DEVELOPMENT CORPORATION, Respondents. This is a petition for Certiorari and Mandamus filed by petitioner against arbitrator Froilan M. Bacungan
and Mantrade Development Corporation arising from the decision of respondent arbitrator, the
dispositive part of which reads as follows:
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SYLLABUS
"CONSIDERING ALL THE ABOVE, We rule that Mantrade Development Corporation is not under legal
obligation to pay holiday pay (as provided for in Article 94 of the Labor Code in the third official
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; VOLUNTARY ARBITRATORS; DECISIONS SUBJECT TO JUDICIAL Department of Labor edition) to its monthly paid employees who are uniformly paid by the month,
REVIEW. The contentions of respondent corporation have been ruled against in the decision of this court in irrespective of the number of working days therein, with a salary of not less than the statutory or
the case of Oceanic Bic Division (FFW) v. Romero, promulgated on July 16, 1984, wherein it stated: . . . "A established minimum wage, and this rule is applicable not only as of March 2, 1976 but as of November
voluntary arbitrator by the nature of her functions acts in a quasijudicial capacity. There is no reason why her 1, 1974."
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decisions involving interpretation of law should be beyond this courts review. Administrative officials are
presumed to act in accordance with law and yet we do not hesitate to pass upon their work where a question of Petitioner questions the validity of the pertinent section of the Rules and Regulations Implementing the
law is involved or where a showing of abuse of discretion in their officials acts is properly raised in petitions Labor Code as amended on which respondent arbitrator based his decision.
for certiorari." (130 SCRA 392, 399, 400-401)
On the other hand, respondent corporation has raised procedural and substantive objections. It
2. ID.; ID.; GRANT FOR HOLIDAY PAY MONTHLY PAID EMPLOYEES; ISSUE SETTLED IN THE CASES OF INSULAR contends that petitioner is barred from pursuing the present action in view of Article 263 of the Labor
BANK OF ASIA AND AMERICA EMPLOYEES UNION VS. INCIONG, [132 SCRA 633], AND CHARTERED BANK Code, which provides in part that "voluntary arbitration awards or decisions shall be final, inappealable,
EMPLOYEES UNION VS. OPLE [141 SCRA 9]. Respondent arbitrator opined that respondent corporation does and executory," as well as the rules implementing the same; the pertinent provision of the Collective
not have any legal obligation to grant its monthly salaried employees holiday pay, unless it is argued that the
Bargaining Agreement between petitioner and respondent corporation; and Article 2044 of the Civil
pertinent section of the Rule and Regulations implementing Section 94 of the Labor Code is not in conformity
Code which provides that "any stipulation that the arbitrators award or decision shall be final, is valid,
with the law, and thus, without force and effect. This issue was subsequently decided on October 24, 1984 by a
without prejudice to Articles 2038, 2039, and 2040." Respondent corporation further contends that the
division of this court in the case of Insular Bank of Asia and American Employees Union (IBAAEU) v. Inciong,
wherein it held as follows: "We agree with petitioners contention that Section 2, Rule IV, Book III of the special civil action of certiorari does not lie because respondent arbitrator is not an "officer exercising
implementing rules and Policy Instruction No. 9 issued by the then Secretary of Labor are null and void since in judicial functions" within the contemplation of Rule 65, Section 1, of the Rules of Court; that the instant
the guise of clarifying the Labor Codes provisions on holiday pay, they in effect amended them enlarging the petition raises an error of judgment on the part of respondent arbitrator and not an error of jurisdiction;
scope of their exclusion (p. 11, rec.). . . . "From the above-cited provisions, it is clear that monthly paid that it prays for the annulment of certain rules and regulations issued by the Department of Labor, not
employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday pay for the annulment of the voluntary arbitration proceedings; and that appeal by certiorari under Section
promulgated by the then Secretary of Labor excludes monthly paid employees from the said benefits by 29 of the Arbitration Law, Republic Act No. 876, is not applicable to the case at bar because arbitration in
inserting under Rule IV, Book III of the implementing rules, section 2, which provides that: employees who are labor disputes is expressly excluded by Section 3 of said law. chanrobles law library : red

uniformly paid by the month, irrespective of the number of working days therein , with the salary of not less
than the statutory or established minimum wage shall be presumed to be paid for all days in the month These contentions have been ruled against in the decision of this Court in the case of Oceanic Bic Division
whether worked or not." (132 SCRA 663, 672-673) This ruling was reiterated by the court en banc on August 28, (FFW) v. Romero, promulgated on July 16, 1984, wherein it stated: jgc:chanrobles.com.ph

1985 in the case of Chartered Bank Employees Association v. Ople, wherein it added that: "The questioned Sec.
2, Rule IV, Book III of the Integrated Rules and the Secretarys Policy Instruction No. 9 add another excluded "We agree with the petitioner that the decisions of voluntary arbitrators must be given the highest
group, namely employees who are uniformly paid by the month. While additional exclusion is only in the form
respect and as a general rule must be accorded a certain measure of finality. This is especially true where
of a presumption that all monthly paid employees have already been paid holiday paid, it constitutes a taking
the arbitrator chosen by the parties enjoys the first rate credentials of Professor Flerida Ruth Pineda
away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which
Romero, Director of the U.P. Law Center and an academician of unquestioned expertise in the field of
diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires." (138
SCRA 273, 282. See also CBTC Employees Union v. Clave, January 7, 1986, 141 SCRA 9.) Labor Law. It is not correct, however, that this respect precludes the exercise of judicial review over their
decisions. Article 262 of the Labor Code making voluntary arbitration awards final, inappealable and
3. REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; APPROPRIATE EQUITABLE REMEDY IN CASE AT BAR. executory, except where the money claims exceed P100,000.00 or 40% of the paid-up capital of the
Respondent corporation contends that mandamus does not lie to compel the performance of an act which the employer or where there is abuse of discretion or gross incompetence refers to appeals to the National
law does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce a contractual Labor Relations Commission and not to judicial review.
obligation, the remedy being an action for specific performance (Province of Pangasinan v. Reparations
Commission, November 29, 1977, 80 SCRA 376). In the case at bar, however, in view of the above-cited "In spite of statutory provisions making final the decisions of certain administrative agencies, we have
subsequent decisions of this Court clearly defining the legal duty to grant holiday pay to monthly salaried taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of
employees, mandamus is an appropriate equitable remedy (Dionisio v. Paterno, July 23, 1980, 98 SCRA 677; discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the Law
Gonzales v. Government Service Insurance System, September 10, 1981, 107 SCRA 492). were brought to our attention. . . .

D E C I S I O N
x x x



FERIA, J.: "A voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity. There is no reason
why her decisions involving interpretation of law should be beyond this Courts review. Administrative
officials are presumed to act in accordance with law and yet we do not hesitate to pass upon their work
where a question of law is involved or where a showing of abuse of discretion in their official acts is "From the above-cited provisions, it is clear that monthly paid employees are not excluded from the
properly raised in petitions for certiorari." (130 SCRA 392, 399, 400-401) benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the then
Secretary of Labor excludes monthly paid employees from the said benefits by inserting under Rule IV,
In denying petitioners claim for holiday pay, respondent arbitrator stated that although monthly salaried Book III of the implementing rules, Section 2, which provides that: employees who are uniformly paid by
employees are not among those excluded from receiving such additional pay under Article 94 of the the month, irrespective of the number of working days therein, with a salary of not less than the
Labor Code of the Philippines, to wit: chanrobles virtual lawlibrary statutory or established minimum wage shall be presumed to be paid for all days in the month whether
worked or not." (132 SCRA 663, 672-673).
ART. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers; This ruling was reiterated by the Court en banc on August 28, 1985 in the case of Chartered Bank
Employees Association v. Ople, wherein it added that:
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(b) The employer may require an employee to work on any holiday but such employee shall be paid
compensation equivalent to twice his regular rate; and "The questioned Sec. 2, Rule IV, Book III of the Integrated Rules and the Secretarys Policy Instruction No.
9 add another excluded group, namely employees who are uniformly paid by the month. While the
(c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday, the ninth additional exclusion is only in the form of a presumption that all monthly paid employees have already
of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty- been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be
fifth and the thirtieth of December, and the day designated by law for holding a general election. valid. An administrative interpretation which diminishes the benefits of labor more than what the statute
delimits or withholds is obviously ultra vires." (138 SCRA 273, 282. See also CBTC Employees Union v. ,
they appear to be excluded under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing said Clave, January 7, 1986, 141 SCRA 9.)
provision which reads thus:
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Lastly, respondent corporation contends that mandamus does not lie to compel the performance of an
SEC. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, act which the law does not clearly enjoin as a duty. True it is also that mandamus is not proper to
irrespective of the number of working days therein, with a salary of not less than the statutory or enforce a contractual obligation, the remedy being an action for specific performance (Province of
established minimum wage shall be presumed to be paid for all days in the month whether worked or Pangasinan v. Reparations Commission, November 29, 1977, 80 SCRA 376). In the case at bar, however,
not. in view of the above cited subsequent decisions of this Court clearly defining the legal duty to grant
holiday pay to monthly salaried employees, mandamus is an appropriate equitable remedy (Dionisio v.
Respondent arbitrator further opined that respondent corporation does not have any legal obligation to Paterno, July 23, 1980, 98 SCRA 677; Gonzales v. Government Service Insurance System, September 10,
grant its monthly salaried employees holiday pay, unless it is argued that the pertinent section of the 1981, 107 SCRA 492).
Rules and Regulations implementing Section 94 of the Labor Code is not in conformity with the law, and
thus, without force and effect. WHEREFORE, the questioned decision of respondent arbitrator is SET ASIDE and respondent corporation
is ordered to GRANT holiday pay to its monthly salaried employees. No costs.
This issue was subsequently decided on October 24, 1984 by a division of this Court in the case of Insular
Bank of Asia and America Employees Union (IBAAEU) v. Inciong, wherein it held as follows: jgc:chanrobles.com.ph SO ORDERED.

"WE agree with the petitioners contention that Section 2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9, issued by the then Secretary of Labor are null and void since in the guise of
clarifying the Labor Codes provisions on holiday pay, they in effect amended them by enlarging the
scope of their exclusion (p. 11, rec.)


"Article 94 of the Labor Code, as amended by P.D. 850, provides:

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Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular

holidays, except in retail and service establishments regularly employing less than ten (10) workers . . .

"The coverage and scope of exclusion of the Labor Codes holiday pay provisions is spelled out under
Article 82 thereof which reads: chanrob1es virtual 1aw library


Art. 82. Coverage. The provision of this Title shall apply to employees in all establishments and
undertakings, whether for profit or not, but not to government employees, managerial employees, field
personnel, members of the family of the employer who are dependent on him for support, domestic
helpers, persons, in the personal service of another, and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.


x x x
G.R. No. 144664 March 15, 2004 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday." (Emphasis
and underscoring supplied)
ASIAN TRANSMISSION CORPORATION, petitioner,
vs. Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:
The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M. BACUNGAN as Voluntary
Arbitrator, KISHIN A. LALWANI, Union, Union representative to the Panel Arbitrators; BISIG NG ASIAN
ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular
TRANSMISSION LABOR UNION (BATLU); HON. BIENVENIDO T. LAGUESMA in his capacity as Secretary
holidays, except in retail and service establishments regularly employing less than ten (10) workers;
of Labor and Employment; and DIRECTOR CHITA G. CILINDRO in her capacity as Director of Bureau of
Working Conditions, respondents.
(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
D E C I S I O N

(c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday,
CARPIO-MORALES, J.:
the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and thirtieth of December and the day designated by law for
Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 holding a general election,
1
Rules of Civil Procedure the nullification of the March 28, 2000 Decision of the Court of Appeals denying
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its petition to annul 1) the March 11, 1993 "Explanatory Bulletin" of the Department of Labor and
which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays
Employment (DOLE) entitled "Workers Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan
are now:
and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31, 1998
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Decision of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to
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April 9, 1998, and 3) the September 18, 1998 Resolution of the Panel of Voluntary Arbitration denying 1. New Years Day January 1
its Motion for Reconsideration. 2. Maundy Thursday Movable Date
3. Good Friday Movable Date
4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)
The following facts, as found by the Court of Appeals, are undisputed:
5. Labor Day May 1
6. Independence Day June 12
The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, 7. National Heroes Day Last Sunday of August
issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are 8. Bonifacio Day November 30
entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being 9. Christmas Day December 25
Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. 10. Rizal Day December 30
The bulletin reads:
In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held
"On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of
also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the which is determined by a legal formula which is not changed by the fact that there are two holidays
view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was
even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year
as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just
Kagitingan. because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy
Thursday."
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday
and Araw ng Kagitingan x x x x In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding
that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the
relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy
Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid
Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the
employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor
effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from
Union (BATLU) protested. 5
the clear intent that all holidays shall be compensated."

In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA)
The Court of Appeals further held that "in the absence of an explicit provision in law which provides for
existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x x x
[a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the
On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its
interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in
covered employees "200% and not just 100% of their regular daily wages for the unworked April 9,
favor of labor."
By the present petition, petitioners raise the following issues: reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself
of the writ of certiorari, his predicament being the effect of his deliberate inaction.
I
The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the
ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of the Court
PARTIES AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be
THEMSELVES appealed to this Court by filing a petition for review, which would be but a continuation of the appellate
process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from
notice of judgment or denial of motion for reconsideration.
II

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN x x x
HOLDING THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY
BULLETIN WAS LAID TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY BULLETIN For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has
no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A
III remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the
injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not
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only available but also a speedy and adequate remedy.
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN
WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT The records of the case show that following petitioners receipt on August 18, 2000 of a copy of the
[Department of Labor and Employment] DOLE MAY PROMULGATE August 10, 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration, it filed the
present petition for certiorari on September 15, 2000, at which time the Court of Appeals decision had
IV become final and executory, the 15-day period to appeal it under Rule 45 having expired.

WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY ISSUING Technicality aside, this Court finds no ground to disturb the assailed decision.
EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE
LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall
PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW 7
afford protection to labor. Its purpose is not merely "to prevent diminution of the monthly income of
the workers on account of work interruptions. In other words, although the worker is forced to take a
8
V rest, he earns what he should earn, that is, his holiday pay." It is also intended to enable the worker to
participate in the national celebrations held during the days identified as with great historical and
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN cultural significance.
SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN
DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August),
RULINGS OF THE SUPREME COURT TO THE CONTRARY Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford
Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote
VI national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to
celebrate the contributions of the working class to the development of the nation, while the religious
holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.
WHETHER OR NOT RESPONDENTS ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUE PROCESS BY
THE "EXPLANATORY BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS
As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid
9 10
regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly
The petition is devoid of merit. 11 12
or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit
demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the
At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay
on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition benefits a worker is entitled to receive.
for certiorari under Rule 65.
It is elementary, under the rules of statutory construction, that when the language of the law is clear and
[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors 13
unequivocal, the law must be taken to mean exactly what it says. In the case at bar, there is nothing in
committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to
timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the nine when two holidays fall on the same day.
14
Petitioners assertion that Wellington v. Trajano has "overruled" the DOLE March 11, 1993 Explanatory SO ORDERED.
Bulletin does not lie. In Wellington, the issue was whether monthly-paid employees are entitled to an
additional days pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative,

observed that in fixing the monthly salary of its employees, Wellington took into account "every working

day of the year including the holidays specified by law and excluding only Sunday." In the instant case,

the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on
15
the same day.


In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation
of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For
16
the working mans welfare should be the primordial and paramount consideration.


Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that

"Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits,

supplements or payments for unworked regular holidays as provided in existing individual or collective
17
agreement or employer practice or policy."


From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to
pay for the legal holidays as required by law. Thus, the 1997-1998 CBA incorporates the following
provision:

ARTICLE XIV
PAID LEGAL HOLIDAYS


The following legal holidays shall be paid by the COMPANY as required by law:


1. New Years Day (January 1st)
2. Holy Thursday (moveable)
3. Good Friday (moveable)
4. Araw ng Kagitingan (April 9th)
5. Labor Day (May 1st)
6. Independence Day (June 12th)
7. Bonifacio Day [November 30]
8. Christmas Day (December 25th)
9. Rizal Day (December 30th)
10. General Election designated by law, if declared public non-working holiday
11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to

the holiday pay.


A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in
addition to normal vacation pay but will not entitle the employee to another vacation leave.

Under similar circumstances, the COMPANY will give a days wage for November 1st and December 31st
whenever declared a holiday. When required to work on said days, the employee will be paid according
18
to Art. VI, Sec. 3B hereof.


WHEREFORE, the petition is hereby DISMISSED.

Digest falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was
Petitioner seeks via petition for certiorari under Rule 65 the nullification of the Decision1 of the Court of Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year
Appeals denying its petition to annul 1) Explanatory Bulletin2 of the Department of Labor and should not be interpreted as authorizing a reduction to nine the number of paid regular holidays just
Employment (DOLE) entitled Workers Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy
and Good Friday, which bulletin the DOLE reproduced on January 23, 1998, 2) Decision3 of the Panel of Thursday.
Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998, and In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding
3) Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration. that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the
relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy
Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the
FACTS:
effectivity of the CBA and that [t]here is no condition, qualification or exception for any variance from
the clear intent that all holidays shall be compensated.5
The Court of Appeals further held that in the absence of an explicit provision in law which provides for
The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano,
[a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the
issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are
interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in
entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being
favor of labor.
Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday].

On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday
ISSUE:
is also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the
Whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same
view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage
day.
even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993

as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng
HELD:
Kagitingan.
This Court finds no ground to disturb the assailed decision.
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall
and Araw ng Kagitingan x x x x
afford protection to labor.7 Its purpose is not merely to prevent diminution of the monthly income of
Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid
the workers on account of work interruptions. In other words, although the worker is forced to take a
employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor
rest, he earns what he should earn, that is, his holiday pay.8 It is also intended to enable the worker to
Union (BATLU) protested.
participate in the national celebrations held during the days identified as with great historical and
In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA)
cultural significance.
existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x x x

On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay
Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August),
its covered employees 200% and not just 100% of their regular daily wages for the unworked April 9,
Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford
1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday.
Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote
Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:
national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to
ART. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular
celebrate the contributions of the working class to the development of the nation, while the religious
holidays, except in retail and service establishments regularly employing less than ten (10) workers;
holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.
(b) The employer may require an employee to work on any holiday but such employee shall be paid a
As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid
compensation equivalent to twice his regular rate; and
regular holidays.9 The provision is mandatory,10regardless of whether an employee is paid on a monthly
(c) As used in this Article, holiday includes: New Years Day, Maundy Thursday, Good Friday, the ninth
or daily basis.11Unlike a bonus, which is a management prerogative,12 holiday pay is a statutory benefit
of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-
demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays,
fifth and thirtieth of December and the day designated by law for holding a general election,
the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday
which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays
pay benefits a worker is entitled to receive.
are now:

1. New Years Day January 1
From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to
2. Maundy Thursday Movable Date
pay for the legal holidays as required by law.
3. Good Friday Movable Date
Only an employee who works on the day immediately preceding or after a regular holiday shall be
4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)
entitled to the holiday pay.
5. Labor Day May 1

6. Independence Day June 12
A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in
7. National Heroes Day Last Sunday of August
addition to normal vacation pay but will not entitle the employee to another vacation leave.
8. Bonifacio Day November 30
Under similar circumstances, the COMPANY will give a days wage for November 1st and December 31st
9. Christmas Day December 25
whenever declared a holiday. When required to work on said days, the employee will be paid according
10. Rizal Day December 30
to Art. VI, Sec. 3B hereof.18
In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held

that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of
WHEREFORE, the petition is hereby DISMISSED.
which is determined by a legal formula which is not changed by the fact that there are two holidays

G.R. No. L-65482 December 1, 1987 2. The personnel of the respondent Jose Rizal College who are paid their wages
daily are entitled to be paid the 10 unworked regular holidays according to the
pertinent provisions of the Rules and Regulations Implementing the Labor Code;
JOSE RIZAL COLLEGE, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE OF TEACHERS/OFFICE 3. Collegiate faculty of the respondent Jose Rizal College who by contract are paid
WORKERS, respondents. compensation per student contract hour are not entitled to unworked regular
holiday pay considering that these regular holidays have been excluded in the
programming of the student contact hours. (Rollo. pp. 26-27)
PARAS, J.:

On appeal, respondent National Labor Relations Commission in a decision promulgated on June 2, 1982,
This is a petition for certiorari with prayer for the issuance of a writ of preliminary injunction, seeking the
modified the decision appealed from, in the sense that teaching personnel paid by the hour are declared
annulment of the decision of the National Labor Relations Commission * in NLRC Case No. RB-IV 23037-
to be entitled to holiday pay (Rollo. p. 33).
78 (Case No. R4-1-1081-71) entitled "National Alliance of Teachers and Office Workers and Juan E.
Estacio, Jaime Medina, et al. vs. Jose Rizal College" modifying the decision of the Labor Arbiter as follows:
Hence, this petition.
WHEREFORE, in view of the foregoing considerations, the decision appealed from
is MODIFIED, in the sense that teaching personnel paid by the hour are hereby The sole issue in this case is whether or not the school faculty who according to their contracts are paid
declared to be entitled to holiday pay. per lecture hour are entitled to unworked holiday pay.

SO ORDERED. Labor Arbiter Julio Andres, Jr. found that faculty and personnel employed by petitioner who are paid
their salaries monthly, are uniformly paid throughout the school year regardless of working days, hence
their holiday pay are included therein while the daily paid employees are renumerated for work
The factual background of this case which is undisputed is as follows:
performed during holidays per affidavit of petitioner's treasurer (Rollo, pp. 72-73).

Petitioner is a non-stock, non-profit educational institution duly organized and existing under the laws of
There appears to be no problem therefore as to the first two classes or categories of petitioner's
the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly basis,
workers.
who receive their monthly salary uniformly throughout the year, irrespective of the actual number of
working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on
actual days worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on the The problem, however, lies with its faculty members, who are paid on an hourly basis, for while the
basis of student contract hour. Before the start of the semester they sign contracts with the college Labor Arbiter sustains the view that said instructors and professors are not entitled to holiday pay, his
undertaking to meet their classes as per schedule. decision was modified by the National Labor Relations Commission holding the contrary. Otherwise
stated, on appeal the NLRC ruled that teaching personnel paid by the hour are declared to be entitled to
holiday pay.
Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977, private respondent
National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty and personnel of Jose
Rizal College filed with the Ministry of Labor a complaint against the college for said alleged non- Petitioner maintains the position among others, that it is not covered by Book V of the Labor Code on
payment of holiday pay, docketed as Case No. R04-10-81-72. Due to the failure of the parties to settle Labor Relations considering that it is a non- profit institution and that its hourly paid faculty members are
their differences on conciliation, the case was certified for compulsory arbitration where it was docketed paid on a "contract" basis because they are required to hold classes for a particular number of hours. In
as RB-IV-23037-78 (Rollo, pp. 155-156). the programming of these student contract hours, legal holidays are excluded and labelled in the
schedule as "no class day. " On the other hand, if a regular week day is declared a holiday, the school
calendar is extended to compensate for that day. Thus petitioner argues that the advent of any of the
After the parties had submitted their respective position papers, the Labor Arbiter ** rendered a
legal holidays within the semester will not affect the faculty's salary because this day is not included in
decision on February 5, 1979, the dispositive portion of which reads:
their schedule while the calendar is extended to compensate for special holidays. Thus the programmed
number of lecture hours is not diminished (Rollo, pp. 157- 158).
WHEREFORE, judgment is hereby rendered as follows:
The Solicitor General on the other hand, argues that under Article 94 of the Labor Code (P.D. No. 442 as
1. The faculty and personnel of the respondent Jose Rizal College who are paid amended), holiday pay applies to all employees except those in retail and service establishments. To
their salary by the month uniformly in a school year, irrespective of the number of deprive therefore employees paid at an hourly rate of unworked holiday pay is contrary to the policy
working days in a month, without deduction for holidays, are presumed to be considerations underlying such presidential enactment, and its precursor, the Blue Sunday Law (Republic
already paid the 10 paid legal holidays and are no longer entitled to separate Act No. 946) apart from the constitutional mandate to grant greater rights to labor (Constitution, Article
payment for the said regular holidays; II, Section 9). (Reno, pp. 76-77).
In addition, respondent National Labor Relations Commission in its decision promulgated on June 2, The Court has already set forth what is now known as the "cardinal primary" requirements of due
1982, ruled that the purpose of a holiday pay is obvious; that is to prevent diminution of the monthly process in administrative proceedings, to wit: "(1) the right to a hearing which includes the right to
income of the workers on account of work interruptions. In other words, although the worker is forced present one's case and submit evidence in support thereof; (2) the tribunal must consider the evidence
to take a rest, he earns what he should earn. That is his holiday pay. It is no excuse therefore that the presented; (3) the decision must have something to support itself; (4) the evidence must be substantial,
school calendar is extended whenever holidays occur, because such happens only in cases of special and substantial evidence means such evidence as a reasonable mind might accept as adequate to
holidays (Rollo, p. 32). support a conclusion; (5) the decision must be based on the evidence presented at the hearing, or at
least contained in the record and disclosed to the parties affected; (6) the tribunal or body of any of its
judges must act on its or his own independent consideration of the law and facts of the controversy, and
Subject holiday pay is provided for in the Labor Code (Presidential Decree No. 442, as amended), which
not simply accept the views of a subordinate; (7) the board or body should in all controversial questions,
reads:
render its decisions in such manner that the parties to the proceeding can know the various issues
involved, and the reason for the decision rendered. " (Doruelo vs. Commission on Elections, 133 SCRA
Art. 94. Right to holiday pay (a) Every worker shall be paid his regular daily wage during 382 [1984]).
regular holidays, except in retail and service establishments regularly employing less than ten
(10) workers;
The records show petitioner JRC was amply heard and represented in the instant proceedings. It
submitted its position paper before the Labor Arbiter and the NLRC and even filed a motion for
(b) The employer may require an employee to work on any holiday but such employee shall be reconsideration of the decision of the latter, as well as an "Urgent Motion for Hearing En Banc" (Rollo, p.
paid a compensation equivalent to twice his regular rate; ... "
175). Thus, petitioner's claim of lack of due process is unfounded.

and in the Implementing Rules and Regulations, Rule IV, Book III, which reads:
PREMISES CONSIDERED, the decision of respondent National Labor Relations Commission is hereby set
aside, and a new one is hereby RENDERED:
SEC. 8. Holiday pay of certain employees. (a) Private school teachers, including faculty
members of colleges and universities, may not be paid for the regular holidays during semestral
vacations. They shall, however, be paid for the regular holidays during Christmas vacations. ... (a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether
the same be during the regular semesters of the school year or during semestral, Christmas, or Holy
Week vacations;
Under the foregoing provisions, apparently, the petitioner, although a non-profit institution is under
obligation to give pay even on unworked regular holidays to hourly paid faculty members subject to the
terms and conditions provided for therein. (b) but ordering petitioner to pay said faculty members their regular hourly rate on days declared as
special holidays or for some reason classes are called off or shortened for the hours they are supposed to
have taught, whether extensions of class days be ordered or not; in case of extensions said faculty
We believe that the aforementioned implementing rule is not justified by the provisions of the law which members shall likewise be paid their hourly rates should they teach during said extensions.
after all is silent with respect to faculty members paid by the hour who because of their teaching
contracts are obliged to work and consent to be paid only for work actually done (except when an
emergency or a fortuitous event or a national need calls for the declaration of special SO ORDERED.
holidays). Regular holidays specified as such by law are known to both school and faculty members as no
class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in
their minds when they entered into the teaching contracts.

On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to
payment on Special Public Holidays.


It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution
of the monthly income of the employees on account of work interruptions is defeated when a regular
class day is cancelled on account of a special public holiday and class hours are held on another working
day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although
forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special
public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it
does not matter that the school calendar is extended in view of the days or hours lost, for their income
that could be earned from other sources is lost during the extended days. Similarly, when classes are
called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must
likewise be paid, whether or not extensions are ordered.

Petitioner alleges that it was deprived of due process as it was not notified of the appeal made to the
NLRC against the decision of the labor arbiter.
DIgest public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it
Facts: does not matter that the school calendar is extended in view of the days or hours lost, for their income
Petitioner is a non-stock, non-profit educational institution duly organized and existing under the laws of that could be earned from other sources is lost during the extended days. Similarly, when classes are
the Philippines. called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must
likewise be paid, whether or not extensions are ordered.
Private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty
and personnel of Jose Rizal College filed a complaint against the college for said alleged non-payment of SC Decision:
holiday pay from 1975 to 1977.
(a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether
Labor Arbiter: the same be during the regular semesters of the school year or during semestral, Christmas, or Holy
Week vacations;
1. The faculty and personnel of the respondent Jose Rizal College who are paid their salary by the (b) but ordering petitioner to pay said faculty members their regular hourly rate on days declared as
month uniformly in a school year, irrespective of the number of working days in a month, without special holidays or for some reason classes are called off or shortened for the hours they are supposed to
deduction for holidays, are presumed to be already paid the 10 paid legal holidays and are no have taught, whether extensions of class days be ordered or not; in case of extensions said faculty
longer entitled to separate payment for the said regular holidays; members shall likewise be paid their hourly rates should they teach during said extensions.
2. The personnel of the respondent Jose Rizal College who are paid their wages daily are entitled to
be paid the 10 unworked regular holidays according to the pertinent provisions of the Rules and
Regulations Implementing the Labor Code;
3. Collegiate faculty of the respondent Jose Rizal College who by contract are paid compensation per
student contract hour are not entitled to unworked regular holiday pay considering that these
regular holidays have been excluded in the programming of the student contact hours.
NLRC: Teaching personnel paid by the hour are entitled to holiday pay


Issue:
Whether or not the school faculty who according to their contracts are paid per lecture hour are entitled
to unworked holiday pay.


Held:

No. The provisions in the Labor Code as to holiday pay do not apply in this case.

Subject holiday pay is provided for in the Labor Code (Presidential Decree No. 442, as amended), which
reads:
Art. 94. Right to holiday pay (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers;
(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 in the Implementing Rules and Regulations, Rule IV, Book III, which reads:

SEC. 8. Holiday pay of certain employees. (a) Private school teachers, including faculty members of

colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall,
however, be paid for the regular holidays during Christmas vacations.
The aforementioned implementing rule is not justified by the provisions of the law which after all is silent
with respect to faculty members paid by the hour. Regular holidays specified as such by law are known
to both school and faculty members as no class days; certainly the latter do not expect payment for said
unworked days, and this was clearly in their minds when they entered into the teaching contracts.
On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to
payment on Special Public Holidays.


It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution
of the monthly income of the employees on account of work interruptions is defeated when a regular
class day is cancelled on account of a special public holiday and class hours are held on another working
day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although
forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special
G.R. No. 79255 January 20, 1992 Both Nestle and UFE filed their respective motions for partial reconsideration. Respondent Arbitrator
treated the two motions as appeals and forwarded the case to the NLRC which issued a resolution dated
May 25, 1987 remanding the case to the respondent arbitrator on the ground that it has no jurisdiction
UNION OF FILIPRO EMPLOYEES (UFE), petitioner,
to review decisions in voluntary arbitration cases pursuant to Article 263 of the Labor Code as amended
vs.
by Section 10, Batas Pambansa Blg. 130 and as implemented by Section 5 of the rules implementing B.P.
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS COMMISSION and NESTL PHILIPPINES, INC.
Blg. 130.
(formerly FILIPRO, INC.), respondents.

However, in a letter dated July 6, 1987, the respondent arbitrator refused to take cognizance of the case
Jose C. Espinas for petitioner.
reasoning that he had no more jurisdiction to continue as arbitrator because he had resigned from
service effective May 1, 1986.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
Hence, this petition.
GUTIERREZ, JR., J.:
The petitioner union raises the following issues:
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.
1) Whether or not Nestle's sales personnel are entitled to holiday pay; and

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National Labor
2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from 251
Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and obligations
to 261 days and whether or not the previous use of 251 as divisor resulted in overpayment for overtime,
respecting claims of its monthly paid employees for holiday pay in the light of the Court's decision
night differential, vacation and sick leave pay.
in Chartered Bank Employees Association v. Ople (138 SCRA 273 [1985]).

The petitioner insists that respondent's sales personnel are not field personnel under Article 82 of the
Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary
Labor Code. The respondent company controverts this assertion.
arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator.

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as
On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro to:
"non-agritultural 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
pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, reasonable certainty."
subject only to the exclusions and limitations specified in Article 82 and such other
legal restrictions as are provided for in the Code. (Rollo,
The controversy centers on the interpretation of the clause "whose actual hours of work in the field
p. 31)
cannot be determined with reasonable certainty."

Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2)
It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported to the
the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel) from the award of the holiday pay, and (3) office and come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.
deduction from the holiday pay award of overpayment for overtime, night differential, vacation and sick
leave benefits due to the use of 251 divisor. (Rollo, pp. 138-145) The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales
personnel's working hours which can be determined with reasonable certainty.
Petitioner UFE answered that the award should be made effective from the date of effectivity of the
Labor Code, that their sales personnel are not field personnel and are therefore entitled to holiday pay, The Court does not agree. The law requires that the actual hours of work in the field be reasonably
and that the use of 251 as divisor is an established employee benefit which cannot be diminished. ascertained. The company has no way of determining whether or not these sales personnel, even if they
report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m, really spend the
hours in between in actual field work.
On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the
holiday pay award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He
adjudged, however, that the company's sales personnel are field personnel and, as such, are not entitled We concur with the following disquisition by the respondent arbitrator:
to holiday pay. He likewise ruled that with the grant of 10 days' holiday pay, the divisor should be
changed from 251 to 261 and ordered the reimbursement of overpayment for overtime, night The requirement for the salesmen and other similarly situated employees to report for
differential, vacation and sick leave pay due to the use of 251 days as divisor. work at the office at 8:00 a.m. and return at 4:00 or 4:30 p.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. This does not in
any manner provide a reasonable level of determination on the actual field work of the The petitioner claims that the fact that these sales personnel are given incentive bonus every quarter
employees which can be reasonably ascertained. The theoretical analysis that salesmen based on their performance is proof that their actual hours of work in the field can be determined with
and other similarly-situated workers regularly report for work at 8:00 a.m. and return to reasonable certainty.
their home station at 4:00 or 4:30 p.m., creating the assumption that their field work is
supervised, is surface projection. Actual field work begins after 8:00 a.m., when the sales
personnel follow their field itinerary, and ends immediately before 4:00 or 4:30 p.m. The Court thinks otherwise.
when they report back to their office. The period between 8:00 a.m. and 4:00 or 4:30
p.m. comprises their hours of work in the field, the extent or scope and result of which The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales
are subject to their individual capacity and industry and which "cannot be determined
target; (2) good collection performance; (3) proper compliance with good market hygiene; (4) good
with reasonable certainty." This is the reason why effective supervision over field work
merchandising work; (5) minimal market returns; and (6) proper truck maintenance. (Rollo, p. 190).
of salesmen and medical representatives, truck drivers and merchandisers is practically
a physical impossibility. Consequently, they are excluded from the ten holidays with pay
award. (Rollo, pp. 36-37) 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. These employees are evaluated by the result
Moreover, the requirement that "actual hours of work in the field cannot be determined with reasonable of their work and not by the actual hours of field work which are hardly susceptible to determination.
certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules which provides:
In San Miguel Brewery, Inc. v. Democratic Labor Organization (8 SCRA 613 [1963]), the Court had
Rule IV Holidays with Pay occasion to discuss the nature of the job of a salesman. Citing the case of Jewel Tea
Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, the Court stated:

Sec. 1. Coverage This rule shall apply to all employees except:


The reasons for excluding an outside salesman are fairly apparent. Such a
salesman, to a greater extent, works individually. There are no restrictions
xxx xxx xxx
respecting the time he shall work and he can earn as much or as little, within the
range of his ability, as his ambition dictates. In lieu of overtime he ordinarily
(e) Field personnel and other employees whose time and performance is unsupervised receives commissions as extra compensation. He works away from his employer's
by the employer . . . (Emphasis supplied) place of business, is not subject to the personal supervision of his employer, and
his employer has no way of knowing the number of hours he works per day.
While contending that such rule added another element not found in the law (Rollo, p. 13), the petitioner
nevertheless attempted to show that its affected members are not covered by the abovementioned rule. While in that case the issue was whether or not salesmen were entitled to overtime pay, the same
The petitioner asserts that the company's sales personnel are strictly supervised as shown by the SOD rationale for their exclusion as field personnel from holiday pay benefits also applies.
(Supervisor of the Day) schedule and the company circular dated March 15, 1984 (Annexes 2 and
3, Rollo, pp. 53-55).
The petitioner union also assails the respondent arbitrator's ruling that, concomitant with the award of
holiday pay, the divisor should be changed from 251 to 261 days to include the additional 10 holidays
Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add and the employees should reimburse the amounts overpaid by Filipro due to the use of 251 days' divisor.
another element to the Labor Code definition of field personnel. The clause "whose time and
performance is unsupervised by the employer" did not amplify but merely interpreted and expounded
Arbitrator Vivar's rationale for his decision is as follows:
the clause "whose actual hours of work in the field cannot be determined with reasonable certainty."
The former clause is still within the scope and purview of Article 82 which defines field personnel. Hence,
in deciding whether or not an employee's actual working hours in the field can be determined with . . . The new doctrinal policy established which ordered payment of ten holidays
reasonable certainty, query must be made as to whether or not such employee's time and performance certainly adds to or accelerates the basis of conversion and computation by ten days.
is constantly supervised by the employer. With the inclusion of ten holidays as paid days, the divisor is no longer 251 but 261 or
262 if election day is counted. This is indeed an extremely difficult legal question of
interpretation which accounts for what is claimed as falling within the concept of
The SOD schedule adverted to by the petitioner does not in the least signify that these sales personnel's "solutio indebti."
time and performance are supervised. 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. and are back in the office not earlier than 4:00
When the claim of the Union for payment of ten holidays was granted, there was a
p.m.
consequent need to abandon that 251 divisor. To maintain it would create an impossible
situation where the employees would benefit with additional ten days with pay but
Likewise, the Court fails to see how the company can monitor the number of actual hours spent in field would simultaneously enjoy higher benefits by discarding the same ten days for
work by an employee through the imposition of sanctions on absenteeism contained in the company purposes of computing overtime and night time services and considering sick and
circular of March 15, 1984. vacation leave credits. Therefore, reimbursement of such overpayment with the use of
251 as divisor arises concomitant with the award of ten holidays with pay. (Rollo, p. 34)
The divisor assumes an important role in determining whether or not holiday pay is already included in Nestle also questions the voluntary arbitrator's ruling that holiday pay should be computed from
the monthly paid employee's salary and in the computation of his daily rate. This is the thrust of our November 1, 1974. This ruling was not questioned by the petitioner union as obviously said decision was
pronouncement in Chartered Bank Employees Association v. Ople (supra). In that case, We held: favorable to it. Technically, therefore, respondent Nestle should have filed a separate petition raising the
issue of effectivity of the holiday pay award. This Court has ruled that an appellee who is not an
It is argued that even without the presumption found in the rules and in the policy
appellant may assign errors in his brief where his purpose is to maintain the judgment on other grounds,
instruction, the company practice indicates that the monthly salaries of the employees but he cannot seek modification or reversal of the judgment or affirmative relief unless he has also
are so computed as to include the holiday pay provided by law. The petitioner contends appealed. (Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989], citing La Campana Food
otherwise. Products, Inc. v. Philippine Commercial and Industrial Bank, 142 SCRA 394 [1986]). Nevertheless, 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 resolved to take up the matter of effectivity of the holiday pay
One strong argument in favor of the petitioner's stand is the fact that the Chartered
award raised by Nestle.
Bank, in computing overtime compensation for its employees, employs a "divisor" of
251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays
and the ten (10) legal holidays from the total number of calendar days in a year. If the Nestle insists that the reckoning period for the application of the holiday pay award is 1985 when
employees are already paid for all non-working days, the divisor should be 365 and not the Chartered Bank decision, promulgated on August 28, 1985, became final and executory, and not
251. from the date of effectivity of the Labor Code. Although the Court does not entirely agree with Nestle,
we find its claim meritorious.
In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows:
In Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong, 132 SCRA 663 [1984],
monthly rate x 12 months hereinafter referred to as the IBAA case, the Court declared that Section 2, Rule IV, Book III of the
implementing rules and Policy Instruction No. 9, issued by the then Secretary of Labor on February 16,
1976 and April 23, 1976, respectively, and which excluded monthly paid employees from holiday pay

benefits, are null and void. The Court therein reasoned that, in the guise of clarifying the Labor Code's
provisions on holiday pay, the aforementioned implementing rule and policy instruction amended them
251 days by enlarging the scope of their exclusion. The Chartered Bank case reiterated the above ruling and added
the "divisor" test.
Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by respondent
Filipro indicates that holiday pay is not yet included in the employee's salary, otherwise the divisor However, prior to their being declared null and void, the implementing rule and policy instruction
should have been 261. enjoyed the presumption of validity and hence, Nestle's non-payment of the holiday benefit up to the
promulgation of the IBAA case on October 23, 1984 was in compliance with these presumably valid rule
It must be stressed that the daily rate, assuming there are no intervening salary increases, is a constant and policy instruction.
figure for the purpose of computing overtime and night differential pay and commutation of sick and
vacation leave credits. Necessarily, the daily rate should also be the same basis for computing the 10 In the case of De Agbayani v. Philippine National Bank, 38 SCRA 429 [1971], the Court discussed the
unpaid holidays. effect to be given to a legislative or executive act subsequently declared invalid:

The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a lower xxx xxx xxx
daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of the
Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then the dividend,
. . . It does not admit of doubt that prior to the declaration of nullity such challenged
which represents the employee's annual salary, should correspondingly be increased to incorporate the
legislative or executive act must have been in force and had to be complied with. This is
holiday pay. To illustrate, if prior to the grant of holiday pay, the employee's annual salary is P25,100, so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled
then dividing such figure by 251 days, his daily rate is P100.00 After the payment of 10 days' holiday pay, to obedience and respect. Parties may have acted under it and may have changed their
his annual salary already includes holiday pay and totals P26,100 (P25,100 + 1,000). Dividing this by 261 positions. What could be more fitting than that in a subsequent litigation regard be had
days, the daily rate is still P100.00. There is thus no merit in respondent Nestle's claim of overpayment of to what has been done while such legislative or executive act was in operation and
overtime and night differential pay and sick and vacation leave benefits, the computation of which are all presumed to be valid in all respects. It is now accepted as a doctrine that prior to its
based on the daily rate, since the daily rate is still the same before and after the grant of holiday pay. being nullified, its existence as a fact must be reckoned with. 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, a period of time
Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251 days as
may have elapsed before it can exercise the power of judicial review that may lead to a
divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and declaration of nullity. It would be to deprive the law of its quality of fairness and justice
interpretation of this Code, including its implementing rules and regulations, shall be resolved in favor of then, if there be no recognition of what had transpired prior to such adjudication.
labor." (Article 4). Moreover, prior to September 1, 1980, when the company was on a 6-day working
schedule, the divisor used by the company was 303, indicating that the 10 holidays were likewise not
paid. When Filipro shifted to a 5-day working schebule on September 1, 1980, it had the chance to rectify In the language of an American Supreme Court decision: "The actual existence of a
statute, prior to such a determination of [unconstitutionality], is an operative fact and
its error, if ever there was one but did not do so. It is now too late to allege payment by mistake.
may have consequences which cannot justly be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity DIGEST
may have to be considered in various aspects, with respect to particular relations, Excluded Employees: Field Personnel
individual and corporate, and particular conduct, private and official." (Chicot County
Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This language has been
quoted with approval in a resolution in Araneta v. Hill (93 Phil. 1002 [1952]) and the Facts:
decision in Manila Motor Co., Inc. v. Flores (99 Phil. 738 [1956]). An even more recent
instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva
This labor dispute stems from the exclusion of sales personnel from the holiday pay award and the
and Co. (21 SCRA 1095 [1967]. (At pp. 434-435)
change of the divisor in the computation of benefits from 251 to 261 days.

The "operative fact" doctrine realizes that in declaring a law or rule null and void, undue harshness and On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National Labor
resulting unfairness must be avoided. It is now almost the end of 1991. To require various companies to Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and obligations
reach back to 1975 now and nullify acts done in good faith is unduly harsh. 1984 is a fairer reckoning respecting claims of its monthly paid employees for holiday pay in the light of the Court's decision in
period under the facts of this case. Chartered Bank Employees Association v. Ople (138 SCRA 273 [1985]).

Applying the aforementioned doctrine to the case at bar, it is not far-fetched that Nestle, relying on the Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary
implicit validity of the implementing rule and policy instruction before this Court nullified them, and arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator.
thinking that it was not obliged to give holiday pay benefits to its monthly paid employees, may have
been moved to grant other concessions to its employees, especially in the collective bargaining Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) the
agreement. This possibility is bolstered by the fact that respondent Nestle's employees are among the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical representatives
highest paid in the industry. With this consideration, it would be unfair to impose additional burdens on (hereinafter referred to as sales personnel) from the award of the holiday pay, and (3) deduction from
Nestle when the non-payment of the holiday benefits up to 1984 was not in any way attributed to the holiday pay award of overpayment for overtime, night differential, vacation and sick leave benefits
Nestle's fault. due to the use of 251 divisor. (Rollo, pp. 138-145)

Petitioner UFE answered that the award should be made effective from the date of effectivity of the
The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation Labor Code, that their sales personnel are not field personnel and are therefore entitled to holiday pay,
of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23, and that the use of 251 as divisor is an established employee benefit which cannot be diminished.
1984, the date of promulgation of the IBAA case.
Issue:
WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed from W/N the respondent's sales personnel are not field personnel under Article 82 of the Labor Code?
October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby AFFIRMED.
Held:

SO ORDERED. The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales
target; (2) good collection performance; (3) proper compliance with good market hygiene; (4) good
merchandising work; (5) minimal market returns; and (6) proper truck maintenance. (Rollo, p. 190).

The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation
of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23,
1984, the date of promulgation of the IBAA case.

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed from
October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby AFFIRMED














JOE ASHLEY AGGA, VICTORINO MAKIMKIM, EDILBERTO EVANGELISTA, BENHUR SANTOS, RICHMOND "Perusing the unrefuted copy of the POEA decision attached as Annex "1" to respondents' Reply dated
CASTILLO, ROMEO AVILA, SEGUNDO GUADEZ, JR., OSCAR MALOLOY-ON,RICARDO August 14, 1995, it appears that in justifying his decision, the Administrator held:
BELDA, RUEL TONACAO, ROMULO DILAP-DILAP, JOSE SERGIO FRANCO, REYNALDO VILLAR,
ROMULO DELA CRUZ, CAMILO CAIG, NICOLAS URSUA, MARTIN BAEZ, JR., MARIO SOSA and
From the foregoing factual backdrop, the issues for resolution in the instant case are:
WOODY PADILLA petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, SUPPLY
OILFIELD SERVICES, INC. and UNDERSEAS DRILLING, INC., respondents.
1. Whether or not complainants had been underpaid of their compensation; and
D E C I S I O N
2. Whether or not complainants are amply covered by insurance.
PUNO, J.:
Anent the first issue, we find in the negative. After comparison of the Summary of Claims of the
Private respondent Supply Oilfield Services, Inc. (SOS) hired petitioners to work on board SEDCO/BP Complainants and Table 2 of the Respondents (Average Monthly Salary of Complainants vs. Statutorily
471, a drillship owned and operated by private respondent Underseas Drilling, Inc. (UDI). Mandated Basic Salary and Benefits), we arrived at the conclusion that the alleged underpayments
represent the difference between the amounts under Column E (Actual Pay on Board) and the amounts
The employment contracts ran for one year with petitioners enjoying two months' off with pay for under Column D (total of basic salary + overtime pay & premium pay + 13th month pay & vacation
every two months' duty. The contracts also provided that for service of 12 hours a day, 7 days a week in a pay). To illustrate, we take the case of complainant Agga who has a basic salary of US$900,
two-shift 24-hour operation, petitioners would receive a fixed monthly compensation covering "basic rate, overtime/premium pay of US$973.71 and 13th month/vacation pay of US$150 totalling
allowances, privileges, travel allowances and benefits granted by law during and after employment with US$2,023.71. The latter amount represents the statutorily mandated basic salary and benefits of
the company." complainant Agga. He received his actual pay on board in the sum of US$1,500. Thus, US$2,023.71 minus
US$1,500 equals US$523.71. The latter amount is what now complainant Agga claims as underpayment
In a complaint filed with the Philippine Overseas Employment Administration (POEA), petitioners
claimed that private respondents failed to pay them overtime pay, holiday pay, rest day pay, 13th month and for a period of two months, his total claim is US$1,047.42.
pay and night shift differential. They likewise alleged that private respondents did not comply with the
mandatory insurance requirement of the rules governing overseas employment. They further averred that We note that in arriving at the alleged underpayment, complainant Agga totally disregarded his day-off
while private respondents made them use passports for overseas contract workers whenever they pay or pay while on leave under Column F in the amount of US$750. Thus, with his pay on board of
departed for, and returned from, overseas employment, they were also instructed to use seaman's books US$1,500 plus his day-off pay of US$750, complainant Agga received an average monthly salary of
upon reaching port for transfer to, and while aboard, the oilrig. Petitioners opined that this practice US$2,250 which is a bit higher than his statutorily mandated salary and benefit of US$2,027.71 in the
entitled them to the benefits granted by law to both land-based workers and seamen. amount of US$222.29. The aforesaid formula applies to all the complainants. Thus, we see no case of
underpayment at bar.
In their Answer and Position Paper, private respondents denied liability. They said that the benefits
referred to in the employment contracts already included overtime pay, holiday pay, termination pay and
13th month pay. They likewise denied that petitioners were entitled to night shift differential since no The claim for underpayments of the complainants is premised on their wrong interpretation of the salary
proof was submitted to show that any of them, at any time, had actually worked from 10:00 p.m. to 6:00 memoranda issued to them individually wherein they insist that vacation leave pay and days-off pay are
a.m. In addition, private respondents belied petitioners' claim that they did not comply with the mandatory additional fringe benefits which should not affect payment of items 1 to 5 therein and to which we
insurance requirement. They alleged that petitioners were insured with Blue Cross (Asia-Pacific) Insurance, disagree.
Ltd. against death and permanent disability. Lastly, private respondents contended that petitioners, as
offshore oilriggers, had nothing to do with manning a vessel or sea navigation. Hence, petitioners were The vacation leave pay is different from 'days-off pay.' Complainants' vacation pay is accounted under
merely land-based workers, not seamen. Column C denominated as 13th month pay but also for a vacation pay of one month which is clearly
[1] indicated by the prescribed formula, i.e. 'Basic Salary (A) x .167. The product over a period of twelve
On July 2, 1992, the POEA dismissed petitioners' complaint for lack of merit. Petitioners appealed months results in two months basic pay as (0.167 x 12 = 2.004). The two months therefore corresponds
to the National Labor Relations Commission (First Division). They submitted the following principal issues to the 13th month pay and the one month vacation leave pay. It is therefore erroneous for complainants
for resolution: (1) whether or not the lumpsum mode of payment of monthly salary is legal; (2) whether
to contend that the vacation leave pay is a distinct benefit when in truth and in fact the same has been
or not there were underpayments of their salary; (3) whether the days-off pay should be considered as duly considered in the computation of their statutorily mandated compensation under the column of
part of their salaries or should be regarded as vacation leave pay or bonus separate therefrom; and (4)
13th month pay.
whether or not respondents substantially complied with the insurance requirement under POEA rules.

Upon the other hand, private respondents informed the NLRC that the POEA had already dismissed While the days-off pay constitutes complainants' salary in the same way as their lumpsum pay while on
the claims for underpayment of labor benefits and lack of insurance coverage in the consolidated cases board the oil rig, therefore complainants should not compare the amounts under column D (Total of A +
docketed as POEA Case No. 91-12-1348 and POEA Case No. 92-01-0011 filed by fourteen of the nineteen B + C) with the amounts under Column E (Actual Pay while on Board) only but with the amounts under
petitioners, and that the dismissal was affirmed on appeal by its Second Division. The decision has become column 'E' and 'F' (pay while on board or days-off pay) which sum is listed under column G (Average
final. Monthly Salary over a 12-Month Period). The days-off pay is paid to the complainants even though they
[2] are not working and should therefore be considered in the computation of their total compensation.
On November 27, 1995, the respondent NLRC promulgated the Decision assailed herein,
dismissing petitioners' appeal. It reiterated the decision in POEA Case No. 91-12-1348 and POEA Case No.
92-01-0011, viz.: xxx xxx xxx
With respect to the second issue, we rule in the affirmative. The evidence on record shows that underpayment at bar" if, in his opinion, the parties' "fixed salary" mode of compensation was illegal,
complainants were provided with insurance coverage superior to that mandated by law. Complainants aware that such declaration of nullity was precisely the end-goal of complainants' complaint.
are insured under two Blue Cross Insurance Policies, i.e. the Disability Income Insurance (Policy No.
ID00128, GP-01) and a Worldwide Executive Health Plan (Policy No. W003323 GP7-01). Under the
Similarly, the NLRC Second Division would not have dismissed complainants' appeal if it were of the view,
disability income insurance, should the employee get sick or injured, he is entitled to a monthly
as argued by complainants, that respondent SOS' lumpsum mode of payment was illegal.
indemnity of US$200. While under the Worldwide Executive Health Plan, the benefits to which the
insured workers are entitled are enumerated in the Table of Insured Benefits. The Personal Accident Plan
Benefits to which the complainants are entitled are as follows: Indeed, our resolving said first issue anew would amount to a duplicitous exercise of appellate
[3]
jurisdiction."
BENEFITS PER PERSON
[4]
1. Death US$15,000 On January 17, 1996, petitioners filed a motion for reconsideration. In an Order dated January 30,
2. Permanent total loss of sight of both eyes US$15,000 1996, the respondent NLRC denied petitioners' motion.
3. Permanent total loss of sight of one eye US$ 7,500 [5]
4. Loss of two limbs US$15,000 Hence, this petition for certiorari raising the following issues:
5. Loss of one limb US$ 7,500
6. Permanent total loss of sight of one eye and loss of one limb US$15,000 "I
7. Permanent total disablement US$15,000
(other than loss of sight of one eye or both eyes or loss of limb) WHETHER OR NOT RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT DECLARING THAT THE
Verily, the benefits provided therein are far greater than mandated by law which is P50,000.00 for death LUMPSUM MODE OF PAYMENT OF PETITIONERS' MONTHLY SALARIES BY PRIVATE RESPONDENTS IS ILLEGAL
due to accident.
II
In an appeal dated February 26, 1993, the complainants questioned the aforesaid decision. They,
however, limited their appeal to claims for additional vacation pay and insurance coverage. WHETHER OR NOT RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT ORDERING PRIVATE
RESPONDENTS, JOINTLY AND SEVERALLY, TO PAY THE ADMITTED UNDERPAYMENTS AS SHOWN BY PRIVATE
xxx xxx xxx
RESPONDENTS' COMPUTATION AND BASED ON PETITIONERS' REGULAR WAGES AND LEGAL FORMULAS FOR
COMPUTING OVERTIME PAY, HOLIDAY/REST DAY PAY, 13TH MONTH PAY AND NIGHT SHIFT DIFFERENTIALS
(I)t then follows that to the extent that the POEA has concluded that there is "no case of underpayment
at bar," the same has to be bindingly observed by us vis-a-vis complainants' submitted issue in their draft III
decision of "(2) whether or not there had been underpayments as claimed by appellants under the
provisions of PD 442."
WHETHER OR NOT RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT DECLARING THE DAYS-OFF
Moreover, on June 13, 1995, the Second Division of this Commission dismissed complainants' appeal "for PAY AS BONUS AND NOT PART OF PETITIONERS' SALARIES WHICH COULD NOT OFFSET THE ADMITTED
lack of merit." At the end of its extended resolution, the Commission concluded that the complainants UNDERPAYMENTS
failed "to show in a satisfactory manner the facts upon which" they based their claims.
IV
xxx xxx xxx
WHETHER OR NOT RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE
This thus disposes the third and fourth issues advanced by complainants for our resolution in their earlier ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT ORDERING THE PHILIPPINE
mentioned draft resolution. OVERSEAS EMPLOYMENT ADMINISTRATION (POEA) TO COMPLY WITH ITS MANDATED DUTY TO SET UP
STANDARD EMPLOYMENT CONTRACT AND GUIDING RATES FOR OILRIG WORKERS LIKE PETITIONERS

xxx xxx xxx


V

Even the first issue submitted to us for our resolution (which, in their draft resolution, has been defined
by complainants as "whether or not the lumpsum mode of payment of appellants' monthly salary is WHETHER OR NOT RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE
legal") was, for all legal intents and purposes, already resolved in that other case for inherently ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT DECLARING THAT PRIVATE
RESPONDENTS FAILED TO COMPLY WITH THE LEGAL REQUIREMENT OF MANDATORY PERSONAL INSURANCE
submitted for the resolution of the POEA and the Second Division of this Commission in that other case
PROVIDED IN THE POEA RULES AND REGULATIONS AND IN ALLOWING PRIVATE RESPONDENTS TO INSURE
was the question of whether or not the "fixed salary" mode of payment stipulated in the parties'
PETITIONERS WITH A FOREIGN INSURANCE COMPANY ILLEGALLY DOING BUSINESS IN THE PHILIPPINES
contract was valid. The POEA Administrator could not have concluded that "we see no case of

VI
WHETHER OR NOT RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE With respect to the fifth issue, we find petitioners' charge that private respondents failed to provide
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT PENALIZING PRIVATE them with life and personal accident insurance groundless. The POEA and the NLRC have found that private
RESPONDENT SUPPLY OILFIELD SERVICES, INC. BY WAY OF SUSPENSION OR CANCELLATION OF ITS LICENSE AS respondents insured petitioners with Blue Cross (Asia-Pacific) Insurance, Ltd. under two policies which
SERVICE CONTRACTOR DESPITE ITS ADMISSION THAT IT ORDERS PETITIONERS AND OTHER OILRIG WORKERS TO even provide for coverage superior to that mandated by the rules. Before this Court, however, petitioners
ALTER TRAVEL DOCUMENTS BY USING TWO (2) PASSPORTS (OCW AND SEAMAN'S BOOK) DURING THEIR assail these insurance policies as they were allegedly issued by a foreign insurance company not licensed
EMPLOYMENT to do business in the Philippines. The contention is raised for the first time and cannot be considered.
[8]

VII In regard to the sixth issue, the evidence shows that petitioners are land-based workers and hence,
not entitled to benefits appertaining to sea-based workers. Petitioners have nothing to do with manning
vessels or with sea navigation. Their use of a seaman's book does not detract from the fact that they
WHETHER OR NOT RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE are truly land-based employees. Petitioners' plea that we suspend SOS' license for making them use two
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT AWARDING DAMAGES AND
(2) passports is off-line. Again, they never prayed for this relief before the POEA and the NLRC.This Court
ATTORNEY'S FEES TO PETITIONERS
is the improper venue for the belated plea.

VIII Finally, the claims for attorney's fees and damages of the petitioners have no basis as private
respondents did not act in bad faith or with malice.
WHETHER OR NOT RESPONDENT NLRC ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN VIEW WHEREOF, the decision of the NLRC dated November 27, 1995 is AFFIRMED. No costs.
EXCESS OF JURISDICTION IN DECLARING HEREIN THAT THE ISSUE OF ILLEGALITY OF THE LUMPSUM MODE OF
PAYMENT OF SALARIES HAD BEEN RESOLVED IN NLRC CASE NO. 004779-93 CONSIDERING THAT IN THE LATTER SO ORDERED.
CASE THE ISSUE IS LIMITED TO UNDERPAYMENT OF DAYS-OFF PAY AND THE NLRC DID NOT RESOLVE THE ISSUES
POSITED HEREIN."[6]

We affirm.

Anent the first issue, petitioners contend that the lumpsum mode of payment of salaries is illegal,
citing Articles 5 and 6 of the New Civil Code, Articles 86, 87, 90, 93 and 94 of PD 442 and Book V, Rule II,
Section 2(a) of the 1991 POEA Rules.

We do not agree. As correctly observed by the respondents, none of the aforemetioned laws and
rules prohibit the subject payment scheme. The cited articles of the New Civil Code merely provide that
agreements in violation of law or public policy cannot be entered into and have legal effect. The cited
provisions of PD 442 simply declare that night shift differential and additional remuneration for overtime,
rest day, Sunday and holiday work shall be computed on the basis of the employee's regular wage. In like
fashion, the 1991 POEA Rules merely require employers to guarantee payment of wages and overtime
pay. Thus, petitioners' stance is bereft of any legal support.

Anent the second and third issues, petitioners allege that their fixed monthly salaries represented
only their basic salaries and did not include overtime pay, holiday pay, 13th month pay and night shift
differential. In POEA Case No. 91-12-1348 and POEA Case No. 92-01-0011, the Administrator found and
ruled that petitioners were not underpaid and that their fixed monthly compensation already comprised
their basic salary, night shift differential, overtime pay, holiday pay and 13th month pay. Petitioners did
not appeal this ruling. In this light, respondent NLRC correctly held:

"With Section 1, Rule V, Book VII of the POEA Rules dated May 31, 1991 (issued pursuant to E.O. 247)
providing that `(D)ecisions and/or awards of the Administration shall be final and executory unless
appealed to the National Labor Relations Commission (NLRC) by any or both parties,' it then follows that
to the extent that the POEA has concluded that there is 'no case of underpayment at bar,' the same has
to be bindingly observed by us vis-a-vis complainants' submitted issue in their draft decision of "(2)
whether or not there had been underpayments as claimed by appellants under the provisions of P.D.
[7]
442."

The fourth issue deserves scant consideration. The matter of ordering the NLRC to compel the POEA
to set up standard employment contract and guiding rates for oilrig workers is beyond the jurisdiction of
this Court.