G.R. No.

211526, June 29, 2016

PMI FACULTY AND EMPLOYEES UNION, Petitioner, v. PMI

COLLEGES BOHOL, Respondent.

FACTS:

RESPONDENT PMI Colleges Bohol is an educational institution that offers maritime

and customs administration courses to the public. Petitioner PMI-Faculty and Employees
Union (Union) is the collective bargaining representative of the respondents rank-and-file
faculty members and administrative staff.

The labor case arose from a notice of strike filed by the PMI union on October 2,
2009 before the National Conciliation and Mediation Board (NCMB) against PMI-Bohol for
alleged gross violation of certain provisions of their collective bargaining agreement (CBA).
While awaiting for the expiration of the 15 day cooling-off period and completion of the 7
day strike vote period or 22 days as required by law, the teachers religiously reported for
duty but on the last day of the cooling off and strike vote periods, they were allegedly not
allowed entry to the school premises by the security guards of PMI Bohol.

Union members, in their sworn testimonies that despite their protest and insistence to
enter the PMI premises in compliance with their teaching load, the PMI security guards
pushed them out of the school grounds under orders from school authorities. The union
admitted that they staged the strike on August 9, 2010, the 21st day after the filing of the
strike notice on July 19, 2010 and submission of the strike vote on August 2, 2010, or a day
earlier than the 22 days cooling off period.

According to the teachers, left with no choice they went on a one day strike prompting
PMI Bohol filing before the Department of Labor and Employment (DOLE) a petition to
declare the strike illegal. But Labor Arbiter Leo Montenegro dismissed the petition of PMI
Bohol for lack of merit declaring that the PMI union substantially complied with the
requirements of a valid strike. Montenegro, in his decision considered that the staging of the
strike one day earlier was not illegal since the unions officers and members were illegally
locked out to enter the school premises to perform their teaching duties based on the sworn
testimonies of the teachers. Montenegro also stressed the failure of PMI Bohol to present the
statements of their security guards on whether the strikers were prevented from reporting for
work.

However, the NLRC disagreed with the labor arbiters decision, ruling the strike
illegal and the union officers losing their employment status with PMI Colleges Bohol. The
NLRC also gave weight to a video footage allegedly submitted by PMI Bohol 15 months
after the strike showing that the entry and exit from the school premises were not restricted
by the security guards. Failing to get justice from the NLRC, the union officers sought relief
before the CA but was rebuffed due to procedural infirmities since documents submitted by
the union officers did not comply with the requirements of the rules of court.

ISSUE: Is the strike illegal?

Ruling: No.

The declaration of the strike a day before the completion of the cooling off and strike
vote periods was but a reaction to the respondents locking out the officers and members of
the union. The union does not deny that it staged the strike on Aug. 9, 2010, or on the 21st
day after the filing of the strike notice on July 19, 2010, and the submission of the strike vote
on Aug. 2, 2010, a day earlier than the 22 days required by law (15 days strike notice, plus
seven days strike vote period). It, however, maintained that it was left with no choice but to
go on strike a day earlier because the respondent had barred its officers and members from
entering the school premises.

The NLRC had been too quick in rejecting the sworn statements of the union officers
and members that they had been locked out by the respondent when they reported for duty in
the morning of Aug. 9, 2010, branding their affidavits as self-serving, without providing any
basis for such a conclusion other than who submitted the statements in evidence, which it
implied to be the Union. On the contrary, we find the statements credible, particularly those
of engineers Teodomila Mascardo and Conchita Bagaslao, Mary Jean Enriquez, and Cirilo
Fallar that they had classes at 7:30 a.m. to 8:30 a.m. on Monday, Aug. 9, 2010, and that, in
compliance with their teaching load, they had to be in the school premises at 7 a.m. but were
surprised when they were not allowed to enter on that day by the guards on duty. They
protested, they added, and insisted on entering the school premises, but they were pushed out
of the school grounds by the guards who said that they were just following orders from the
PMI management.

Under the circumstances, we find no reason for Mascardo, Bagaslao, Enriquez, and
Fallar to make self-serving and therefore, false statements on their failure to hold their classes
in the morning of Aug. 9, 2010 because they were refused entry by the security guards. While
they are union members, they are first and foremost teachers who were reporting for duty on
that day. The same thing can be said of the union officers who were also refused entry by the
guards. We likewise find no reason for the officers to throw away all their preparations for a
lawful strike on the very last day, had they not been pushed to act by the respondents closing
of the gates on Aug. 9, 2010. It was thus grave abuse of discretion for the NLRC to
completely ignore the affidavits of the officers and members of the union directly saying that
they were refused entry into the school premises on Aug. 9, 2010, especially when LA
Montenegro intimated that the respondent could have presented the testimonies of the guards
on duty at the time to belie the statements of the union officers and members.
 [G.R. No. 117495. May 29, 1997]

NELLY ACTA MARTINEZ, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION, DOMINADOR CORRO, PASTOR
CORRO, CELESTINO CORRO, LUIS CORRO, EREBERTO CORRO,
JAIME CRUZ, WENCESLAO DELVO, GREGORIO DELVO,
HERMEJIAS COLIBAO, JOSE OGANA and ALONSO ALBAO,
respondents.

Facts:

RAUL MARTINEZ was operator of two (2) taxicab units under the business name
PAMA TX and two (2) additional units under the name P. J. TIGER TX. Private respondents
Dominador Corro, Pastor Corro, Celestino Corro, Luis Corro, Ereberto Corro, Jaime Cruz,
Wenceslao Delvo, Gregorio Delvo, Hermejias Colibao, Jose Ogana and Alonso Albao
worked for him as drivers. On 18 March 1992 Raul Martinez died leaving behind his mother,
petitioner Nelly Acta Martinez, as his sole heir.

On 14 July 1992 private respondents lodged a complaint against Raul Martinez and
petitioner Nelly Acta Martinez before the Labor Arbiter for violation of P. D. 851[1] and
illegal dismissal. They alleged that they have been regular drivers of Raul Martinez since 20
October 1989 earning no less than P400.00 per day driving twenty-four (24) hours every
other day. For the duration of employment, not once did they receive a 13th month pay. After
the death of Raul Martinez, petitioner took over the management and operation of the
business. On or about 22 June 1992 she informed them that because of difficulty in
maintaining the business, she was selling the units together with the corresponding
franchises. However, petitioner did not proceed with her plan; instead, she assigned the units
to other drivers.

Petitioner traversed the claim for 13th month pay by contending that it was personal
and therefore did not survive the death of her son. Besides, private respondents were not
entitled thereto as Sec. 3, par. (e), of the Rules and Regulations Implementing P. D. 851 is
explicit that employers of those who are paid on purely boundary basis are not covered
therein. The relationship between her son and private respondents was not that of employer-
employee but of lessor-lessee. The operation of the business ceased upon the death of her son
and that she did not continue the business because she did not know how to run it.

On 30 August 1993 the Labor Arbiter dismissed the complaint on the following
grounds: (a) private respondents' claims being personal were extinguished upon the death of
Raul Martinez; (b) petitioner was a mere housewife who did not possess the required
competence to manage the business; and, (c) private respondents were not entitled to 13th
month pay because the existence of employer-employee relationship was doubtful on account
of the boundary system adopted by the parties.

However, respondent National Labor Relations Commission viewed the case

differently. According to NLRC, (a) private respondents were regular drivers because
payment of wages, which is one of the essential requisites for the existence of employment
relation, may either be fixed, on commission, boundary, piece-rate or task basis; (b) the
management of the business passed on to petitioner who even replaced private respondents
with a new set of drivers; and, (c) the claims of private respondents survived the death of
Raul Martinez considering that the business did not cease operation outright but continued
presumably, in the absence of proof of sale, up to the moment. As regards the claim for 13th
month pay, NLRC upheld the stand of petitioner based on the express provision of P. D. 851
as reiterated in the revised guidelines on the implementation thereof. On 28 January 1994
respondent NLRC thus set aside the appealed decision, and as alternative to reinstatement,
ordered petitioner to grant respondents separation pay equivalent to one (1) month salary for
every year of service a fraction of six (6) months being considered as one (1) whole year.[3]
On 30 September 1994 the motion for reconsideration was denied.[4] Hence, this recourse of
petitioner.

ISSUE: Whether there is employer-employee relationship in a boundary system?

RULING:

The Court ruled that the relationship between jeepney owners/operators on one hand
and jeepney drivers on the other under the boundary system is that of ER-EE and not of
lessor-lessee. Therein we explained that in the lease of chattels the lessor loses complete
control over the chattel leased although the lessee cannot be reckless in the use thereof,
otherwise he would be responsible for the damages to the lessor. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control over the
latter. The fact that the drivers do not receive fixed wages but get only that in excess of the
so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. The doctrine is applicable by
analogy to the present case. Thus, private respondents were employees of Raul Martinez
because they had been engaged to perform activities which were usually necessary or
desirable in the usual business or trade of the employer.
 G.R. No. 149640, October 19, 2007

SAN MIGUEL CORPORATION, ANDRES SORIANO III, FRANCISCO

C. EIZMENDI, JR., and FAUSTINO F. GALANG, Petitioners, v.
NUMERIANO LAYOC, JR., CARLOS APONESTO, PAULINO
BALDUGO, QUEZON BARIT, BONIFACIO BOTOR, HERMINIO
CALINA, DANILO CAMINGAL, JUAN DE MESA, REYNOLD
DESEMBRANA, BERNARDITO DEUS, EDUARDO FILLARTA,
MAXIMIANO FRANCISCO, MARIO MARILIM, DEMETRIO MATEO,
FILOMENO MENDOZA, CONRADO NIEVA, FRANCISCO PALINES,
FELIPE POLINTAN, MALCOLM SATORRE, and
ALEJANDRO TORRES,
Respondents

FACTS:

Layoc was among the Supervisory Security Guards of the Beer Division of the San
Miguel Corporation. From the start of their employment, Layoc and other supervisory
security guards were required to punch their time cards for purposes of determining the time
they would come in and out of the companys work place.

From the commencement of their employment, the private respondents were required
to punch their time cards for purposes of determining the time they would come in and out of
the companys work place. Corollary [sic], the private respondents were availing the benefits
for overtime, holiday and night premium duty through time card punching. However, in the
early 1990s, the San Miguel Corporation embarked on a Decentralization Program aimed at
enabling the separate divisions of the San Miguel Corporation to pursue a more efficient and
effective management of their respective operations .

As a result of the Decentralization Program, the Beer Division of the San Miguel
Corporation implemented on January 1, 1993 a no time card policy whereby the Supervisory
I and II composing of the supervising security guards of the Beer Division were no longer
required to punch their time cards (Ibid., p. 100). Consequently, on January 16, 1993, without
prior consultation with the private respondents, the time cards were ordered confiscated and
the latter were no longer allowed to render overtime work.

However, in lieu of the overtime pay and the premium pay, the personnel of the Beer
Division of the petitioner San Miguel Corporation affected by the No Time Card Policy were
given a 10% across-the-board increase on their basic pay while the supervisors who were
assigned in the night shift (6:00 p.m. to 6:00 a.m.) were given night shift allowance ranging
from P2, 000.00 to P2, 500.00 a month.
On 1 December 1994, respondents filed a complaint for unfair labor practice, violation of
Article 100 of the Labor Code of the Philippines, and violation of the equal protection clause
and due process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code
of the Philippines. Respondents prayed for actual damages for two years (1993-1994), moral
damages, exemplary damages, and overtime, holiday, and night premium pay.

In their position paper dated 28 February 1995, respondents stated that the Beer
Division of SMC maliciously and fraudulently refused payment of their overtime, holiday,
and night premium pay from 1 to 15 January 1993 because of the no time card policy.
Moreover, petitioners had no written authority to stop respondents from punching their time
cards because the alleged memorandum authorizing such stoppage did not include
supervisory security guards. Thus, the respondents suffered a diminution of benefits, making
petitioners liable for non-payment of overtime, holiday, and night premium pay.

In their position paper dated 23 February 1995, petitioners maintained that

respondents were supervisory security guards who were exempt from the provisions of the
Labor Code on hours of work, weekly rest periods, and rest days. The no time card policy did
not just prevent respondents from punching their time cards, but it also granted respondents
an across-the-board increase of 10% of basic salary and either a P2, 000 or P2,500 night shift
allowance on top of their yearly merit increase. Petitioners further asserted that the no time
card policy was a valid exercise of management prerogative and that all supervisors in the
Beer Division were covered by the no time card policy, which classification was distinct and
separate from the other divisions within SMC.

Respondents filed their reply dated 15 March 1995 to petitioners position paper.
Petitioners, on the other hand, filed their rejoinder dated 27 March 1995 to respondents reply.
Respondents filed a request for admission dated 2 May 1995 to which petitioners filed their
reply dated 15 May 1995. The labor arbiter ruled that there is a diminution of benefits. The
NLRC affirmed this ruling. The appellate court affirmed the decision with modifications.

Issues:

1) Were they entitled to overtime pay?

2) Was there diminution of benefits when the no-time-card policy was implemented?

Ruling:

They were managerial employees; not entitled to overtime pay.

Both petitioners and respondents agree that respondents are supervising security
guards and, thus, managerial employees. The dispute lies on whether respondents are entitled
to render overtime work and receive overtime pay despite the institution of the no time card
policy because (1) SMC previously allowed them to render overtime work and paid them
accordingly, and (2) supervising security guards in other SMC divisions are allowed to render
overtime work and receive the corresponding overtime pay. Article 82 of the Labor Code
states that the provisions of the Labor Code on working conditions and rest periods shall not
apply to managerial employees. It is thus clear that, generally, managerial employees such as
respondents are not entitled to overtime pay for services rendered in excess of eight hours a
day. Respondents failed to show that the circumstances of the present case constitute an
exception to this general rule.

No diminution of benefits; overtime pay is not a benefit

Contrary to the nature of benefits, SMC did not freely give the payment for overtime
work to them. Overtime pay was paid as compensation for services rendered in addition to
the regular work hours. They rendered overtime work only when their services were needed
after their regular working hours and only upon the instructions of their superiors. The
requirement of rendering additional service differentiates overtime pay from benefits such as
thirteenth month pay or yearly merit increase. These benefits do not require any additional
service from their beneficiaries. Thus, overtime pay does not fall within the definition of
benefits under Article 100 of the Labor Code.

No time card policy is not discriminatory; valid exercise of management prerogative

The policy was implemented only in the Beer Division. [NB: SMC has a
decentralization program that authorizes heads of divisions to formulate and implement
policies they see fit.] SC held that the policy is not discriminatory just because it was applied
in one division only and the security supervisors in other divisions were allowed to render
overtime. While the policy caused pecuniary loss to the employees, SMC granted a 10%
across-the-board increase in pay and night shift allowance, in addition to their yearly merit
increase in basic salary, to cushion the impact of the loss. SMC was in good faith.
 G.R. No. 92174 December 10, 1993

BOIE-TAKEDA CHEMICALS, INC., petitioner,

vs.
HON. DIONISIO DE LA SERNA, Acting Secretary of the Department of
Labor and Employment, respondent.

FACTS:
P.D. No. 851 provides for the Thirteen-Month Pay Law. Under Sec. 1 of said law, all
employers are required to pay all their employees receiving basic salary of not more than P1,
000.00 a month, regardless of the nature of the employment, and such should be paid on
December 24 of every year. The Rules and Regulations Implementing P.D. 851 contained
provisions defining 13-month pay and basic salary and the employers exempted from
giving it and to whom it is made applicable. Supplementary Rules and Regulations
Implementing P.D. 851 were subsequently issued by Minister Ople which inter alia set items
of compensation not included in the computation of 13-month pay. (Overtime pay, earnings
and other remunerations which are not part of basic salary shall not be included in the
computation of 13-month pay). Pres. Corazon Aquino promulgated on August 13, 1985
M.O.No. 28, containing a single provision that modifies P.D. 851 by removing the salary
ceiling of P1, 000.00 a month. More than a year later, Revised Guidelines on the
Implementation of the13-month pay law was promulgated by the then Labor Secretary
Franklin Drilon, among other things, defined particularly what remunerative items were and
were not included in the concept of 13-month pay, and specifically dealt with employees who
are paid a fixed or guaranteed wage plus commission or commissions were included in the
computation of 13thmonth pay).

A routine inspection was conducted in the premises of petitioner. Finding that

petitioner had not been including the commissions earned by its medical representatives in
the computation of their 1-month pay, a Notice of Inspection Result was served on petitioner
to effect restitution or correction of the underpayment of 13-month pay for the years, 1986
to1988 of Medical representatives. Petitioner wrote the Labor Department contesting the
Notice of Inspection Results, and expressing the view that the commission paid to its medical
representatives are not to be included in the computation of the 13-month pay since the law
and its implementing rules speak of REGULAR or BASIC salary and therefore exclude all
remunerations which are not part of the REGULAR salary. Regional Dir. Luna Piezas issued
an order for the payment of underpaid 13-month pay for the years 1986, 1987 and 1988. A
motion for reconsideration was filed and the then Acting labor Secretary Dionisio de la Serna
affirmed the order with modification that the sales commission earned of medical
representatives before August 13, 1989 (effectivity date of MO 28 and its implementing
guidelines) shall be excluded in the computation of the 13-month pay. Similar routine
inspection was conducted in the premises of Phil. Fuji Xerox where it was found there was
underpayment of 13th month pay since commissions were not included. In their almost
identically-worded petitioner, petitioners, through common counsel, attribute grave abuse of
discretion to respondent labor officials Hon. Dionisio dela Serna and Undersecretary
Cresenciano B. Trajano.

ISSUE:
Whether or not commissions are included in the computation of 13-month pay.

HELD:
NO. Contrary to respondents contention, M.O No. 28 did not repeal, supersede or
abrogate P.D. 851. As may be gleaned from the language of MO No. 28, it merely
modified Section 1 of the decree by removing the P 1,000.00 salary ceiling. The concept of
13th Month pay as envisioned, defined and implemented under P.D. 851 remained unaltered,
and while entitlement to said benefit was no longer limited to employees receiving a monthly
basic salary of not more than P 1,000.00 said benefit was, and still is, to be computed on the
basic salary of the employee-recipient as provided under P.D. 851. Thus, the interpretation
given to the term basic salary was defined in PD 851 applies equally to basic salary
under M.O. No.28. The term basic salary is to be understood in its common, generally
accepted meaning,i.e., as a rate of pay for a standard work period exclusive of such additional
payments as bonuses and overtime. In remunerative schemes consists of a fixed or guaranteed
wage plus commission, the fixed or guaranteed wage is patently the basic salary for this is
what the employee receives for a standard work period. Commissions are given for extra
efforts exerted in consummating sales of other related transactions. They are, as such,
additional pay, which the SC has made clear do not from part of the basic salary.