Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 101279 August 6, 1992

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,

vs.
HON. RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, and JOSE
N. SARMIENTO, as Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.

De Guzman, Meneses & Associates for petitioner.

GRIÑO-AQUINO, J.:

This petition for prohibition with temporary restraining order was filed by the Philippine Association of
Service Exporters (PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor
and Employment (DOLE) and the Administrator of the Philippine Overseas Employment
Administration (or POEA) from enforcing and implementing DOLE Department Order No. 16, Series
of 1991 and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, temporarily suspending
the recruitment by private employment agencies of Filipino domestic helpers for Hong Kong and
vesting in the DOLE, through the facilities of the POEA, the task of processing and deploying such
workers.

PASEI is the largest national organization of private employment and recruitment agencies duly
licensed and authorized by the POEA, to engaged in the business of obtaining overseas
employment for Filipino landbased workers, including domestic helpers.

On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino
housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order
No. 16, Series of 1991, temporarily suspending the recruitment by private employment agencies of
"Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA
took over the business of deploying such Hong Kong-bound workers.

In view of the need to establish mechanisms that will enhance the protection for
Filipino domestic helpers going to Hong Kong, the recruitment of the same by private
employment agencies is hereby temporarily suspended effective 1 July 1991. As
such, the DOLE through the facilities of the Philippine Overseas Employment
Administration shall take over the processing and deployment of household workers
bound for Hong Kong, subject to guidelines to be issued for said purpose.

In support of this policy, all DOLE Regional Directors and the Bureau of Local
Employment's regional offices are likewise directed to coordinate with the POEA in
maintaining a manpower pool of prospective domestic helpers to Hong Kong on a
regional basis.
 For compliance. (Emphasis ours; p. 30, Rollo.)

Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of
1991, dated July 10, 1991, providing GUIDELINES on the Government processing and deployment
of Filipino domestic helpers to Hong Kong and the accreditation of Hong Kong recruitment agencies
intending to hire Filipino domestic helpers.

Subject: Guidelines on the Temporary Government Processing and Deployment of

Domestic Helpers to Hong Kong.

Pursuant to Department Order No. 16, series of 1991 and in order to operationalize
the temporary government processing and deployment of domestic helpers (DHs) to
Hong Kong resulting from the temporary suspension of recruitment by private
employment agencies for said skill and host market, the following guidelines and
mechanisms shall govern the implementation of said policy.

I. Creation of a joint POEA-OWWA Household Workers Placement Unit (HWPU)

An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the
supervision of the POEA shall take charge of the various operations involved in the
Hong Kong-DH industry segment:

The HWPU shall have the following functions in coordination with appropriate units
and other entities concerned:

1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies

2. Manpower Pooling

3. Worker Training and Briefing

4. Processing and Deployment

5. Welfare Programs

II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong
Recruitment Agencies or Principals

Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers
may negotiate with the HWPU in Manila directly or through the Philippine Labor
Attache's Office in Hong Kong.

xxx xxx xxx

X. Interim Arrangement

All contracts stamped in Hong Kong as of June 30 shall continue to be processed by

POEA until 31 July 1991 under the name of the Philippine agencies concerned.
Thereafter, all contracts shall be processed with the HWPU.
 Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General
in Hong kong a list of their accepted applicants in their pool within the last week of
July. The last day of acceptance shall be July 31 which shall then be the basis of
HWPU in accepting contracts for processing. After the exhaustion of their respective
pools the only source of applicants will be the POEA manpower pool.

For strict compliance of all concerned. (pp. 31-35, Rollo.)

On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of
1991, on the processing of employment contracts of domestic workers for Hong Kong.

TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic
helpers for Hong Kong

Further to Memorandum Circular No. 30, series of 1991 pertaining to the government
processing and deployment of domestic helpers (DHs) to Hong Kong, processing of
employment contracts which have been attested by the Hong Kong Commissioner of
Labor up to 30 June 1991 shall be processed by the POEA Employment Contracts
Processing Branch up to 15 August 1991 only.

Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the
Philippines shall recruit under the new scheme which requires prior accreditation
which the POEA.

Recruitment agencies in Hong Kong may apply for accreditation at the Office of the
Labor Attache, Philippine Consulate General where a POEA team is posted until 31
August 1991. Thereafter, those who failed to have themselves accredited in Hong
Kong may proceed to the POEA-OWWA Household Workers Placement Unit in
Manila for accreditation before their recruitment and processing of DHs shall be
allowed.

Recruitment agencies in Hong Kong who have some accepted applicants in their
pool after the cut-off period shall submit this list of workers upon accreditation. Only
those DHs in said list will be allowed processing outside of the HWPU manpower
pool.

For strict compliance of all concerned. (Emphasis supplied, p. 36, Rollo.)

On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the
aforementioned DOLE and POEA circulars and to prohibit their implementation for the following
reasons:

1. that the respondents acted with grave abuse of discretion and/or in excess of their
rule-making authority in issuing said circulars;

2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are
unreasonable, unfair and oppressive; and

3. that the requirements of publication and filing with the Office of the National
Administrative Register were not complied with.
There is no merit in the first and second grounds of the petition.

Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate
recruitment and placement activities.

Art. 36. Regulatory Power. — The Secretary of Labor shall have the power to
restrict and regulate the recruitment and placement activities of all agencies within
the coverage of this title [Regulation of Recruitment and Placement Activities] and is
hereby authorized to issue orders and promulgate rules and regulations to carry out
the objectives and implement the provisions of this title. (Emphasis ours.)

On the other hand, the scope of the regulatory authority of the POEA, which was created by
Executive Order No. 797 on May 1, 1982 to take over the functions of the Overseas Employment
Development Board, the National Seamen Board, and the overseas employment functions of the
Bureau of Employment Services, is broad and far-ranging for:

1. Among the functions inherited by the POEA from the defunct Bureau of
Employment Services was the power and duty:

"2. To establish and maintain a registration and/or licensing system to

regulate private sector participation in the recruitment and placement
of workers, locally and overseas, . . ." (Art. 15, Labor Code, Emphasis
supplied). (p. 13, Rollo.)

2. It assumed from the defunct Overseas Employment Development Board the power
and duty:

3. To recruit and place workers for overseas employment of Filipino

contract workers on a government to government arrangement and in
such other sectors as policy may dictate . . . (Art. 17, Labor Code.) (p.
13, Rollo.)

3. From the National Seamen Board, the POEA took over:

2. To regulate and supervise the activities of agents or

representatives of shipping companies in the hiring of seamen for
overseas employment; and secure the best possible terms of
employment for contract seamen workers and secure compliance
therewith. (Art. 20, Labor Code.)

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not

unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity
of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more
administrative bodies are necessary to help in the regulation of society's ramified activities.
"Specialized in the particular field assigned to them, they can deal with the problems thereof with
more expertise and dispatch than can be expected from the legislature or the courts of justice"
(Ibid.).

It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the
recruitment and deployment of Filipino landbased workers for overseas employment. A careful
reading of the challenged administrative issuances discloses that the same fall within the
"administrative and policing powers expressly or by necessary implication conferred" upon the
respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by
Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24
SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to
"regulate" means "the power to protect, foster, promote, preserve, and control with due regard for
the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine
Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218).

The Solicitor General, in his Comment, aptly observed:

. . . Said Administrative Order [i.e., DOLE Administrative Order No. 16] merely
restricted the scope or area of petitioner's business operations by excluding
therefrom recruitment and deployment of domestic helpers for Hong Kong till after
the establishment of the "mechanisms" that will enhance the protection of Filipino
domestic helpers going to Hong Kong. In fine, other than the recruitment and
deployment of Filipino domestic helpers for Hongkong, petitioner may still deploy
other class of Filipino workers either for Hongkong and other countries and all other
classes of Filipino workers for other countries.

Said administrative issuances, intended to curtail, if not to end, rampant violations of

the rule against excessive collections of placement and documentation fees, travel
fees and other charges committed by private employment agencies recruiting and
deploying domestic helpers to Hongkong. [They are reasonable, valid and justified
under the general welfare clause of the Constitution, since the recruitment and
deployment business, as it is conducted today, is affected with public interest.

xxx xxx xxx

The alleged takeover [of the business of recruiting and placing Filipino domestic
helpers in Hongkong] is merely a remedial measure, and expires after its purpose
shall have been attained. This is evident from the tenor of Administrative Order No.
16 that recruitment of Filipino domestic helpers going to Hongkong by private
employment agencies are hereby "temporarily suspended effective July 1, 1991."

The alleged takeover is limited in scope, being confined to recruitment of domestic

helpers going to Hongkong only.

xxx xxx xxx

. . . the justification for the takeover of the processing and deploying of domestic
helpers for Hongkong resulting from the restriction of the scope of petitioner's
business is confined solely to the unscrupulous practice of private employment
agencies victimizing applicants for employment as domestic helpers for Hongkong
and not the whole recruitment business in the Philippines. (pp. 62-65, Rollo.)

The questioned circulars are therefore a valid exercise of the police power as delegated to the
executive branch of Government.

Nevertheless, they are legally invalid, defective and unenforceable for lack of power publication and
filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code,
Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code
of 1987 which provide:
 Art. 2. Laws shall take effect after fifteen (15) days following the completion of their
publication in the Official Gazatte, unless it is otherwise provided. . . . (Civil Code.)

Art. 5. Rules and Regulations. — The Department of Labor and other government
agencies charged with the administration and enforcement of this Code or any of its
parts shall promulgate the necessary implementing rules and regulations. Such rules
and regulations shall become effective fifteen (15) days after announcement of their
adoption in newspapers of general circulation. (Emphasis supplied, Labor Code, as
amended.)

Sec. 3. Filing. — (1) Every agency shall file with the University of the Philippines Law
Center, three (3) certified copies of every rule adopted by it. Rules in force on the
date of effectivity of this Code which are not filed within three (3) months shall not
thereafter be the basis of any sanction against any party or persons. (Emphasis
supplied, Chapter 2, Book VII of the Administrative Code of 1987.)

Sec. 4. Effectivity. — In addition to other rule-making requirements provided by law

not inconsistent with this Book, each rule shall become effective fifteen (15) days
from the date of filing as above provided unless a different date is fixed by law, or
specified in the rule in cases of imminent danger to public health, safety and welfare,
the existence of which must be expressed in a statement accompanying the rule.
The agency shall take appropriate measures to make emergency rules known to
persons who may be affected by them. (Emphasis supplied, Chapter 2, Book VII of
the Administrative Code of 1987).

Once, more we advert to our ruling in Tañada vs. Tuvera, 146 SCRA 446 that:

. . . Administrative rules and regulations must also be published if their purpose is to

enforce or implement existing law pursuant also to a valid delegation. (p. 447.)

Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of the administrative agency and not the public, need not be published.
Neither is publication required of the so-called letters of instructions issued by
administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties. (p. 448.)

We agree that publication must be in full or it is no publication at all since its purpose
is to inform the public of the content of the laws. (p. 448.)

For lack of proper publication, the administrative circulars in question may not be enforced and
implemented.

WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order
No. 16, Series of 1991, and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, by the
public respondents is hereby SUSPENDED pending compliance with the statutory requirements of
publication and filing under the aforementioned laws of the land.

SO ORDERED.

Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Medialdea, Regalado, Davide, Jr.,
Romero, Nocon and Bellosillo, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 126383 November 28, 1997

SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA. CONSUELO

MACQUILING LEONARDO MARTINEZ, DOMINGO ELA, JR., RODOLFO CALUCIN, JR., PERLA
MENDOZA, REX RAPHAEL REYES, ROGELIO BELMONTE, and 375 other EMPLOYEE-UNION
MEMBERS, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, and SAN JUAN DE DIOS
HOSPITAL, respondents.

FRANCISCO, J.:

Petitioners, the rank-and-file employee-union officers and members of San Juan De Dios Hospital
Employees Association, sent on July 08, 1991, a "four (4)-page letter with attached support
signatures . . . requesting and pleading for the expeditious implementation and payment by
respondent" Juan De Dios Hospital "of the '40-HOURS/5-DAY WORKWEEK' with compensable
weekly two (2) days off provided for by Republic Act 5901 as clarified for enforcement by the
Secretary of Labor's Policy Instructions No. 54 dated April 12, 1988." 1 Respondent hospital failed to
give a favorable response; thus, petitioners filed a complaint regarding their "claims for statutory
benefits under the above-cited law and policy issuance" 2, docketed as NLRC NCR Case No. 00-08-
04815-19. On February 26, 1992, the Labor Arbiter 3 dismissed the complaint. Petitioners appealed
before public respondent National Labor Relations Commission 4 (NLRC), docketed as NLRC NCR
CA 003028-92, which affirmed the Labor Arbiter's decision. Petitioners' subsequent motion for
reconsideration was denied; hence, this petition under Rule 65 of the Rules of Court ascribing grave
abuse of discretion on the part of NLRC in concluding that Policy Instructions No. 54 "proceeds from
a wrong interpretation of RA 5901" 5 and Article 83 of the Labor Code.

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

The policy instruction in question provides in full as follows:

Policy Instruction No. 54

To: All Concerned

Subject: Working Hours and Compensation of Hospital/Clinic Personnel

This issuance clarifies the enforcement policy of this Department on the working
hours and compensation of personnel employed by hospitals/clinics with a bed
capacity of 100 or more and those located in cities and municipalities with a
population of one million or more.

Republic Act 5901 took effect on 21 June 1969 prescribes a 40-hour/5 day work
week for hospital/clinic personnel. At the same time, the Act prohibits the diminution
of the compensation of these workers who would suffer a reduction in their weekly
wage by reason of the shortened workweek prescribed by the Act. In effect, RA 5901
requires that the covered hospital workers who used to work seven (7) days a week
should be paid for such number of days for working only 5 days or 40 hours a week.

The evident intention of RA 5901 is to reduce the number of hospital personnel,

considering the nature of their work, and at the same time guarantee the payment to
them of a full weekly wage for seven (7) days. This is quite clear in the Exemplary
Note of RA 5901 which states:

As compared with the other employees and laborers, these hospital

and health clinic personnel are over-worked despite the fact that their
duties are more delicate in nature. If we offer them better working
conditions, it is believed that the "brain drain", that our country suffers
nowadays as far as these personnel are concerned will be
considerably lessened. The fact that these hospitals and health
clinics personnel perform duties which are directly concerned with the
health and lives of our people does not mean that they should work
for a longer period than most employees and laborers. They are also
entitled to as much rest as other workers. Making them work longer
than is necessary may endanger, rather than protect the health of
their patients. Besides, they are not receiving better pay than the
other workers. Therefore, it is just and fair that they may be made to
enjoy the privileges of equal working hours with other workers except
those excepted by law. (Sixth Congress of the Republic of the
Philippines, Third Session, House of Representatives, H. No. 16630)

The Labor Code in its Article 83 adopts and incorporates the basic provisions of RA
5901 and retains its spirit and intent which is to shorten the workweek of covered
hospital personnel and at the same time assure them of a full weekly wage.

Consistent with such spirit and intent, it is the position of the Department that
personnel in subject hospital and clinics are entitled to a full weekly wage for seven
(7) days if they have completed the 40-hour/5-day workweek in any given workweek.

All enforcement and adjudicatory agencies of this Department shall be guided by this
issuance in the disposition of cases involving the personnel of covered hospitals and
clinics.

Done in the City of Manila, this 12th day of April, 1988.

(Sgd.)
FRANK
LIN M.
DRILO
N
 Secret
ary

(Emphasis Added)

We note that Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901,
otherwise known as "An Act Prescribing Forty Hours A Week Of Labor For Government and Private
Hospitals Or Clinic Personnel", enacted on June 21, 1969. Reliance on Republic Act No. 5901,
however, is misplaced for the said statute, as correctly ruled by respondent NLRC, has long been
repealed with the passage of the Labor Code on May 1, 1974, Article 302 of which explicitly
provides: "All labor laws not adopted as part of this Code either directly or by reference are hereby
repealed. All provisions of existing laws, orders, decree, rules and regulations inconsistent herewith
are likewise repealed." Accordingly, only Article 83 of the Labor Code which appears to have
substantially incorporated or reproduced the basic provisions of Republic Act No. 5901 may support
Policy Instructions No. 54 on which the latter's validity may be gauged. Article 83 of the Labor Code
states:

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

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

A cursory reading of Article 83 of the Labor Code betrays petitioners' position that "hospital
employees" are entitled to "a full weekly salary with paid two (2) days' off if they have completed the
40-hour/5-day workweek". 6 What Article 83 merely provides are: (1) the regular office hour of eight
hours a day, five days per week for health personnel, and (2) where the exigencies of service require
that health personnel work for six days or forty-eight hours then such health personnel shall be
entitled to an additional compensation of at least thirty percent of their regular wage for work on the
sixth day. There is nothing in the law that supports then Secretary of Labor's assertion that
"personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they
have completed the 40-hour/5-day workweek in any given workweek". Needless to say, the
Secretary of Labor exceeded his authority by including a two days off with pay in contravention of
the clear mandate of the statute. Such act the Court shall not countenance. Administrative
interpretation of the law, we reiterate, is at best merely advisory, 7 and the Court will not hesitate to
strike down an administrative interpretation that deviates from the provision of the statute.

Indeed, even if we were to subscribe with petitioners' erroneous assertion that Republic Act No.
5901 has neither been amended nor repealed by the Labor Code, we nevertheless find Policy
Instructions No. 54 invalid. A perusal of Republic Act No. 5901 8 reveals nothing therein that gives
two days off with pay for health personnel who complete a 40-hour work or 5-day workweek. In fact,
the Explanatory Note of House Bill No. 16630 (later passed into law as Republic Act No. 5901)
explicitly states that the bill's sole purpose is to shorten the working hours of health personnel and
not to dole out a two days off with pay.

Hence:

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

As compared with the other employees and laborers, these hospital and health clinic
personnel are over-worked despite the fact that their duties are more delicate in
nature. If we offer them better working conditions, it is believed that the "brain drain",
that our country suffers nowadays as far as these personnel are concerned will be
considerably lessened. The fact that these hospitals and health clinic personnel
perform duties which are directly concerned with the health and lives of our people
does not mean that they should work for a longer period than most employees and
laborers. They are also entitled to as much rest as other workers. Making them work
longer than is necessary may endanger, rather than protect, the health of their
patients. Besides, they are not receiving better pay than the other workers.
Therefore, it is just and fair that they be made to enjoy the privileges of equal working
hours with other workers except those excepted by law.

In the light of the foregoing, approval of this bill is strongly recommended.

(SGD.)
SERGI
O H.
LOYOL
A

"Congr
essma
n, 3rd
District
Manila"
(Annex
"F" of
petition
,
empha
sis
supplie
d)

Further, petitioners' position is also negated by the very rules and regulations promulgated
by the Bureau of Labor Standards which implement Republic Act No. 5901. Pertinent
portions of the implementing rules provide:
 RULES AND REGULATIONS IMPLEMENTING
REPUBLIC ACT NO. 5901

By virtue of Section 79 of the Revised Administrative Code, as modified by section

18 of Implementation Report for Reorganization Plan No. 20-A on Labor, vesting in
the Bureau of Labor Standards the authority to promulgate rules and regulations to
implement wage and hour laws, the following rules and regulations to are hereby
issued for the implementation of Republic Act No. 5901.

CHAPTER I — Coverage

Sec. 1. General Statement on Coverage. Republic Act No. 5901, hereinafter referred
to as the Act, shall apply to:

(a) All hospitals and clinics, including those with a bed capacity of less than one
hundred, which are situated in cities or municipalities with a population of one million
or more; and to

(b) All hospitals and clinics with a bed capacity of at least one hundred, irrespective
of the size of population of the city or municipality where they may be situated.

xxx xxx xxx

Sec. 7. Regular Working Day. The regular working days of covered employees shall
be not more than five days in a workweek. The workweek may begin at any hour and
on any day, including Saturday or Sunday, designated by the employer.

Employers are not precluded from changing the time at which the workday or
workweek begins, provided that the change is not intended to evade the
requirements of these regulations on the payment of additional compensation.

xxx xxx xxx

Sec. 15. Additional Pay Under the Act and C.A. No. 444. (a) Employees of covered
hospitals and clinics who are entitled to the benefits provided under the Eight-Hour
Labor Law, as amended, shall be paid an additional compensation equivalent to their
regular rate plus at least twenty-five percent thereof for work performed on Sunday
and Holidays, not exceeding eight hours, such employees shall be entitled to an
additional compensation of at least 25% of their regular rate.

(b) For work performed in excess of forty hours a week, excluding those rendered in
excess of eight hours a day during the week, employees covered by the Eight-Hour
Labor Law shall be entitled to an additional straight-time pay which must be
equivalent at least to their regular rate.

If petitioners are entitled to two days off with pay, then there appears to be no sense at all why
Section 15 of the implementing rules grants additional compensation equivalent to the regular rate
plus at least twenty-five percent thereof for work performed on Sunday to health personnel, or an
"additional straight-time pay which must be equivalent at least to the regular rate" "[f]or work
performed in excess of forty hours a week. . . . Policy Instructions No. 54 to our mind unduly
extended the statute. The Secretary of Labor moreover erred in invoking the "spirit and intent" of
Republic Act No. 5901 and Article 83 of the Labor Code for it is an elementary rule of statutory
construction that when the language of the law is clear and unequivocal, the law must be taken to
mean exactly what it says. 9 No additions or revisions may be permitted. Policy Instructions No. 54
being inconsistent with and repugnant to the provision of Article 83 of the Labor Code, as well as to
Republic Act No. 5901, should be, as it is hereby, declared void.

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

SO ORDERED.

Narvasa, C.J., Romero, Melo and Panganiban, JJ., concur.

 FIRST DIVISION

G.R. No. 129329 July 31, 2001

ESTER M. ASUNCION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, Second Division, MABINI MEDICAL CLINIC
and DR. WILFRIDO JUCO, respondents.

KAPUNAN, J.:

In her petition filed before this Court, Ester Asuncion prays that the Decision, dated November 29,
1996, and the Resolution, dated February 20,1997, of the public respondent National Labor
Relations Commission, Second Division, in NLRC CA. 011188 which reversed the Decision of the
Labor Arbiter, dated May 15, 1996 be set aside.

The antecedents of this case are as follows:

On August 16, 1993, petitioner Ester M. Asuncion was employed as an accountant/bookkeeper by

the respondent Mabini Medical Clinic. Sometime in May 1994, certain officials of the NCR-Industrial
Relations Division of the Department of Labor and Employment conducted a routine inspection of
the premises of the respondent company and discovered upon the disclosure of the petitioner of
(documents) violations of the labor standards law such as the non-coverage from the SSS of the
employees. Consequently, respondent Company was made to correct these violations.

On August 9, 1994, the private respondent, Medical Director Wilfrido Juco, issued a memorandum to
petitioner charging her with the following offenses:

1. Chronic Absentism (sic) – You have incurred since Aug. 1993 up to the present 35
absences and 23 half-days.

2. Habitual tardiness – You have late (sic) for 108 times. As shown on the record book.

3. Loitering and wasting of company time – on several occasions and witnessed by several
employees.

4. Getting salary of an absent employee without acknowledging or signing for it.

5. Disobedience and insubordination - continued refusal to sign memos given to you.1

Petitioner was required to explain within two (2) days why she should not be terminated based on
the above charges.

Three days later, in the morning of August 12, 1994, petitioner submitted her response to the
memorandum. On the same day, respondent Dr. Juco, through a letter dated August 12, 1994,
dismissed the petitioner on the ground of disobedience of lawful orders and for her failure to submit
her reply within the two-day period.

This prompted petitioner to file a case for illegal termination before the NLRC.
In a Decision, dated May 15, 1996, Labor Arbiter Manuel Caday rendered judgment declaring that
the petitioner was illegally dismissed. The Labor Arbiter found that the private respondents were
unable to prove the allegation of chronic absenteeism as it failed to present in evidence the time
cards, logbooks or record book which complainant signed recording her time in reporting for work.
These documents, according to the Labor Arbiter, were in the possession of the private respondents.
In fact, the record book was mentioned in the notice of termination. Hence, the non-presentation of
these documents gives rise to the presumption that these documents were intentionally suppressed
since they would be adverse to private respondent’s claim. Moreover, the Labor Arbiter ruled that the
petitioner’s absences were with the conformity of the private respondents as both parties had agreed
beforehand that petitioner would not report to work on Saturdays. The handwritten listing of the days
when complainant was absent from work or late in reporting for work and even the computerized
print-out, do not suffice to prove that petitioner’s absences were unauthorized as they could easily
be manufactured.2 Accordingly, the dispositive portion of the decision states, to wit:

WHEREFORE, Premises Considered, judgment is hereby rendered declaring the dismissal

of the complainant as illegal and ordering the respondent company to immediately reinstate
her to her former position without loss of seniority rights and to pay the complainant’s
backwages and other benefits, as follows:

1) P73,500.00 representing backwages as of the date of this decision until she is

actually reinstated in the service;

2) P20,000.00 by way of moral damages and another P20,000.00 representing

exemplary damages; and

3) 10% of the recoverable award in this case representing attorney’s fees.

SO ORDERED.3

On appeal, public respondent NLRC rendered the assailed decision which set aside the Labor
Arbiter’s ruling. Insofar as finding the private respondents as having failed to present evidence
relative to petitioner’s absences and tardiness, the NLRC agrees with the Labor Arbiter. However,
the NLRC ruled that petitioner had admitted the tardiness and absences though offering justifications
for the infractions. The decretal portion of the assailed decision reads:

WHEREFORE, premises considered, the appealed decision is hereby VACATED and SET
ASIDE and a NEW ONE entered dismissing the complaint for illegal dismissal for lack of
merit.

However, respondents Mabini Medical Clinic and Dr. Wilfrido Juco are jointly and solidarily
ordered to pay complainant Ester Asuncion the equivalent of her three (3) months salary for
and as a penalty for respondents’ non-observance of complainant’s right to due process.

SO ORDERED.4

Petitioner filed a motion for reconsideration which the public respondent denied in its Resolution,
dated February 19, 1997. Hence, petitioner through a petition for certiorari under Rule 65 of the
Rules of Court seeks recourse to this Court and raises the following issue:

THE PUBLIC RESPONDENT ERRED IN FINDING THAT THE PETITIONER WAS

DISMISSED BY THE PRIVATE RESPONDENT FOR A JUST OR AUTHORIZED CAUSE.
The petition is impressed with merit.

Although, it is a legal tenet that factual findings of administrative bodies are entitled to great weight
and respect, we are constrained to take a second look at the facts before us because of the diversity
in the opinions of the Labor Arbiter and the NLRC.5 A disharmony between the factual findings of the
Labor Arbiter and those of the NLRC opens the door to a review thereof by this Court.6

It bears stressing that a worker’s employment is property in the constitutional sense. He cannot be
deprived of his work without due process. In order for the dismissal to be valid, not only must it be
based on just cause supported by clear and convincing evidence,7 the employee must also be given
an opportunity to be heard and defend himself. 8 It is the employer who has the burden of proving
that the dismissal was with just or authorized cause.9 The failure of the employer to discharge this
burden means that the dismissal is not justified and that the employee is entitled to reinstatement
and backwages.10

In the case at bar, there is a paucity of evidence to establish the charges of absenteeism and
tardiness. We note that the employer company submitted mere handwritten listing and computer
print-outs. The handwritten listing was not signed by the one who made the same. As regards the
print-outs, while the listing was computer generated, the entries of time and other annotations were
again handwritten and unsigned.11

We find that the handwritten listing and unsigned computer print-outs were unauthenticated and,
hence, unreliable. Mere self-serving evidence of which the listing and print-outs are of that nature
should be rejected as evidence without any rational probative value even in administrative
proceedings. For this reason, we find the findings of the Labor Arbiter to be correct. On this point,
the Labor Arbiter ruled, to wit:

x x x In the instant case, while the Notice of Termination served on the complainant clearly
mentions the record book upon which her tardiness (and absences) was based, the
respondent (company) failed to establish (through) any of these documents and the
handwritten listing, notwithstanding, of (sic) the days when complainant was absent from
work or late in reporting for work and even the computerized print-outs, do not suffice to
prove the complainant’s absences were unauthorized as they could easily be manufactured.
x x x12

In IBM Philippines, Inc. v. NLRC,13 this Court clarified that the liberality of procedure in administrative
actions is not absolute and does not justify the total disregard of certain fundamental rules of
evidence. Such that evidence without any rational probative value may not be made the basis of
order or decision of administrative bodies. The Court’s ratiocination in that case is relevant to the
propriety of rejecting the unsigned handwritten listings and computer print-outs submitted by private
respondents which we quote, to wit:

However, the liberality of procedure in administrative actions is subject to limitations imposed

by basic requirements of due process. As this Court said in Ang Tibay v. CIR, the provision
for flexibility in administrative procedure "does not go so far as to justify orders without a
basis in evidence having rational probative value." More specifically, as held in Uichico v.
NLRC:

"It is true that administrative and quasi-judicial bodies like the NLRC are not bound
by the technical rules of procedure in the adjudication of cases. However, this
procedural rule should not be construed as a license to disregard certain
fundamental evidentiary rules. While the rules of evidence prevailing in the courts of
 law or equity are not controlling in proceedings before the NLRC, the evidence
presented before it must at least have a modicum of admissibility for it to be given
some probative value. The Statement of Profit and Losses submitted by Crispa, Inc.
to prove its alleged losses, without the accompanying signature of a certified public
accountant or audited by an independent auditor, are nothing but self-serving
documents which ought to be treated as a mere scrap of paper devoid of any
probative value."

The computer print-outs, which constitute the only evidence of petitioners, afford no
assurance of their authenticity because they are unsigned. The decisions of this Court, while
adhering to a liberal view in the conduct of proceedings before administrative agencies, have
nonetheless consistently required some proof of authenticity or reliability as condition for the
admission of documents.

In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC,14 this Court held as incompetent unsigned
daily time records presented to prove that the employee was neglectful of his duties:

Indeed, the DTRs annexed to the present petition would tend to establish private
respondent’s neglectful attitude towards his work duties as shown by repeated and habitual
absences and tardiness and propensity for working undertime for the year 1992. But the
problem with these DTRs is that they are neither originals nor certified true copies. They are
plain photocopies of the originals, if the latter do exist. More importantly, they are not even
signed by private respondent nor by any of the employer’s representatives. x x x.

In the case at bar, both the handwritten listing and computer print-outs being unsigned, the
authenticity thereof is highly suspect and devoid of any rational probative value especially in the light
of the existence of the official record book of the petitioner’s alleged absences and tardiness in the
possession of the employer company.

Ironically, in the memorandum charging petitioner and notice of termination, private respondents
referred to the record book as its basis for petitioner’s alleged absenteeism and tardiness.
Interestingly, however, the record book was never presented in evidence. Private respondents had
possession thereof and the opportunity to present the same. Being the basis of the charges against
the petitioner, it is without doubt the best evidence available to substantiate the allegations. The
purpose of the rule requiring the production of the best evidence is the prevention of fraud, because
if a party is in possession of such evidence and withholds it, and seeks to substitute inferior evidence
in its place, the presumption naturally arises that the better evidence is withheld for fraudulent
purposes which its production would expose and defeat.15 Thus, private respondents’ unexplained
and unjustified non-presentation of the record book, which is the best evidence in its possession and
control of the charges against the petitioner, casts serious doubts on the factual basis of the charges
of absenteeism and tardiness.

We find that private respondents failed to present a single piece of credible evidence to serve as the
basis for their charges against petitioner and consequently, failed to fulfill their burden of proving the
facts which constitute the just cause for the dismissal of the petitioner. However, the NLRC ruled that
despite such absence of evidence, there was an admission on the part of petitioner in her Letter
dated August 11, 1994 wherein she wrote:

I am quite surprised why I have incurred 35 absences since August 1993 up to the present. I
can only surmise that Saturdays were not included in my work week at your clinic. If you will
please recall, per agreement with you, my work days at your clinic is from Monday to Friday
without Saturday work. As to my other supposed absences, I believe that said absences
 were authorized and therefore cannot be considered as absences which need not be
explained (sic). It is also extremely difficult to understand why it is only now that I am
charged to explain alleged absences incurred way back August 1993.16

In reversing the decision of the Labor Arbiter, public respondent NLRC relied upon the supposed
admission of the petitioner of her habitual absenteeism and chronic tardiness.

We do not subscribe to the findings of the NLRC that the above quoted letter of petitioner amounted
to an admission of her alleged absences. As explained by petitioner, her alleged absences were
incurred on Saturdays. According to petitioner, these should not be considered as absences as there
was an arrangement between her and the private respondents that she would not be required to
work on Saturdays. Private respondents have failed to deny the existence of this arrangement.
Hence, the decision of the NLRC that private respondent had sufficient grounds to terminate
petitioner as she admitted the charges of habitual absences has no leg to stand on.

Neither have the private respondents shown by competent evidence that the petitioner was given
any warning or reprimanded for her alleged absences and tardiness. Private respondents claimed
that they sent several notices to the petitioner warning her of her absences, however, petitioner
refused to receive the same. On this point, the Labor Arbiter succinctly observed:

The record is bereft of any showing that complainant was ever warned of her absences prior
to her dismissal on August 9, 1994. The alleged notices of her absences from August 17,
until September 30, 1993, from October until November 27, 1993, from December 1, 1993
up to February 26, 1994 and the notice dated 31 May 1994 reminding complainant of her five
(5) days absences, four (4) half-days and tardiness for 582 minutes (Annex "1" to "1-D"
attached to respondent' Rejoinder), fail to show that the notices were received by the
complainant. The allegation of the respondents that the complainant refused to received (sic)
the same is self-serving and merits scant consideration. xxx17

The Court, likewise, takes note of the fact that the two-day period given to petitioner to explain and
answer the charges against her was most unreasonable, considering that she was charged with
several offenses and infractions (35 absences, 23 half-days and 108 tardiness), some of which were
allegedly committed almost a year before, not to mention the fact that the charges leveled against
her lacked particularity.

Apart from chronic absenteeism and habitual tardiness, petitioner was also made to answer for
loitering and wasting of company time, getting salary of an absent employee without acknowledging
or signing for it and disobedience and insubordination.18 Thus, the Labor Arbiter found that actually
petitioner tried to submit her explanation on August 11, 1994 or within the two-day period given her,
but private respondents prevented her from doing so by instructing their staff not to accept
complainant’s explanation, which was the reason why her explanation was submitted a day later.19

The law mandates that every opportunity and assistance must be accorded to the employee by the
management to enable him to prepare adequately for his defense.20 In Ruffy v. NLRC,21 the Court
held that what would qualify as sufficient or "ample opportunity," as required by law, would be "every
kind of assistance that management must accord to the employee to enable him to prepare
adequately for his defense." In the case at bar, private respondents cannot be gainsaid to have
given petitioner the ample opportunity to answer the charges leveled against her.

From the foregoing, there are serious doubts in the evidence on record as to the factual basis of the
charges against petitioner. These doubts shall be resolved in her favor in line with the policy under
the Labor Code to afford protection to labor and construe doubts in favor of labor.22 The consistent
rule is that if doubts exist between the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter. The employer must affirmatively show rationally
adequate evidence that the dismissal was for a justifiable cause.23 Not having satisfied its burden of
proof, we conclude that the employer dismissed the petitioner without any just cause. Hence, the
termination is illegal.

Having found that the petitioner has been illegally terminated, she is necessarily entitled to
reinstatement to her former previous position without loss of seniority and the payment of
backwages.24

WHEREFORE, the Decision of the National Labor Relations Commission, dated November 29, 1996
and the Resolution, dated February 20, 1997 are hereby REVERSED and SET ASIDE, and the
Decision of the Labor Arbiter, dated May 15, 1996 REINSTATED.

SO ORDERED.

Puno, Pardo, and Ynares-Santiago, JJ., concur.

Davide, Jr., C.J., (Chairman), on official leave.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. NO. 156225 January 29, 2008

LETRAN CALAMBA FACULTY and EMPLOYEES ASSOCIATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and COLEGIO DE SANJUAN DE LETRAN
CALAMBA, INC.,respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Assailed in the present Petition for Review on Certiorari under Rule 45 of the Rules of Court is the
Decision1 of the Court of Appeals (CA) promulgated on May 14, 2002 in CA-G.R. SP No. 61552
dismissing the special civil action for certiorari filed before it; and the Resolution2 dated November
28, 2002, denying petitioner's Motion for Reconsideration.

The facts of the case are as follows:

On October 8, 1992, the Letran Calamba Faculty and Employees Association (petitioner) filed with
Regional Arbitration Branch No. IV of the National Labor Relations Commission (NLRC) a
Complaint3 against Colegio de San Juan de Letran, Calamba, Inc. (respondent) for collection of
various monetary claims due its members. Petitioner alleged in its Position Paper that:

xxxx

2) [It] has filed this complaint in behalf of its members whose names and positions appear in
the list hereto attached as Annex "A".

3) In the computation of the thirteenth month pay of its academic personnel, respondent
does not include as basis therefor their compensation for overloads. It only takes into
account the pay the faculty members receive for their teaching loads not exceeding eighteen
(18) units. The teaching overloads are rendered within eight (8) hours a day.

4) Respondent has not paid the wage increases required by Wage Order No. 5 to its
employees who qualify thereunder.

5) Respondent has not followed the formula prescribed by DECS Memorandum Circular No.
2 dated March 10, 1989 in the computation of the compensation per unit of excess load or
overload of faculty members. This has resulted in the diminution of the compensation of
faculty members.

6) The salary increases due the non-academic personnel as a result of job grading has not
been given. Job grading has been an annual practice of the school since 1980; the same is
done for the purpose of increasing the salaries of non-academic personnel and as the
counterpart of the ranking systems of faculty members.
 7) Respondent has not paid to its employees the balances of seventy (70%) percent of the
tuition fee increases for the years 1990, 1991 and 1992.

8) Respondent has not also paid its employees the holiday pay for the ten (10) regular
holidays as provided for in Article 94 of the Labor Code.

9) Respondent has refused without justifiable reasons and despite repeated demands to pay
its obligations mentioned in paragraphs 3 to 7 hereof.

x x x x4

The complaint was docketed as NLRC Case No. RAB-IV-10-4560-92-L.

On January 29, 1993, respondent filed its Position Paper denying all the allegations of petitioner.

On March 10, 1993, petitioner filed its Reply.

Prior to the filing of the above-mentioned complaint, petitioner filed a separate complaint against the
respondent for money claims with Regional Office No. IV of the Department of Labor and
Employment (DOLE).

On the other hand, pending resolution of NLRC Case No. RAB-IV-10-4560-92-L, respondent filed
with Regional Arbitration Branch No. IV of the NLRC a petition to declare as illegal a strike staged by
petitioner in January 1994.

Subsequently, these three cases were consolidated. The case for money claims originally filed by
petitioner with the DOLE was later docketed as NLRC Case No. RAB-IV-11-4624-92-L, while the
petition to declare the subject strike illegal filed by respondent was docketed as NLRC Case No.
RAB-IV-3-6555-94-L.

On September 28, 1998, the Labor Arbiter (LA) handling the consolidated cases rendered a
Decision with the following dispositive portion:

WHEREFORE, premises considered, judgment is hereby rendered, as follows:

1. The money claims cases (RAB-IV-10-4560-92-L and RAB-IV-11-4624-92-L) are hereby

dismissed for lack of merit;

2. The petition to declare strike illegal (NLRC Case No. RAB-IV-3-6555-94-L) is hereby
dismissed, but the officers of the Union, particularly its President, Mr. Edmundo F.
Marifosque, Sr., are hereby reprimanded and sternly warned that future conduct similar to
what was displayed in this case will warrant a more severe sanction from this Office.

SO ORDERED.5

Both parties appealed to the NLRC.

On July 28, 1999, the NLRC promulgated its Decision6 dismissing both appeals. Petitioner filed a
Motion for Reconsideration7 but the same was denied by the NLRC in its Resolution8 dated June 21,
2000.
Petitioner then filed a special civil action for certiorari with the CA assailing the above-mentioned
NLRC Decision and Resolution.

On May 14, 2002, the CA rendered the presently assailed judgment dismissing the petition.

Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution promulgated on
November 28, 2002.

Hence, herein petition for review based on the following assignment of errors:

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE FACTUAL

FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION CANNOT BE
REVIEWED IN CERTIORARI PROCEEDINGS.

II

THE COURT OF APPEALS GRAVELY ERRED IN REFUSING TO RULE SQUARELY ON

THE ISSUE OF WHETHER OR NOT THE PAY OF FACULTY MEMBERS FOR TEACHING
OVERLOADS SHOULD BE INCLUDED AS BASIS IN THE COMPUTATION OF THEIR
THIRTEENTH MONTH PAY.

III

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE DECISION OF

THE NATIONAL LABOR RELATIONS COMMISSION IS SUPPORTED BY SUBSTANTIAL
EVIDENCE AND IN NOT GRANTING PETITIONER'S MONETARY CLAIMS.9

Citing Agustilo v. Court of Appeals,10 petitioner contends that in a special civil action
for certiorari brought before the CA, the appellate court can review the factual findings and the legal
conclusions of the NLRC.

As to the inclusion of the overloads of respondent's faculty members in the computation of their 13th-
month pay, petitioner argues that under the Revised Guidelines on the Implementation of the 13th-
Month Pay Law, promulgated by the Secretary of Labor on November 16, 1987, the basic pay of an
employee includes remunerations or earnings paid by his employer for services rendered, and that
excluded therefrom are the cash equivalents of unused vacation and sick leave credits, overtime,
premium, night differential, holiday pay and cost-of-living allowances. Petitioner claims that since the
pay for excess loads or overloads does not fall under any of the enumerated exclusions and
considering that the said overloads are being performed within the normal working period of eight
hours a day, it only follows that the overloads should be included in the computation of the faculty
members' 13th-month pay.

To support its argument, petitioner cites the opinion of the Bureau of Working Conditions of the
DOLE that payment of teaching overload performed within eight hours of work a day shall be
considered in the computation of the 13th-month pay.11

Petitioner further contends that DOLE-DECS-CHED-TESDA Order No. 02, Series of 1996 (DOLE
Order) which was relied upon by the LA and the NLRC in their respective Decisions cannot be
applied to the instant case because the DOLE Order was issued long after the commencement of
petitioner's complaints for monetary claims; that the prevailing rule at the time of the commencement
of petitioner's complaints was to include compensations for overloads in determining a faculty
member's 13th-month pay; that to give retroactive application to the DOLE Order issued in 1996 is to
deprive workers of benefits which have become vested and is a clear violation of the constitutional
mandate on protection of labor; and that, in any case, all doubts in the implementation and
interpretation of labor laws, including implementing rules and regulations, should be resolved in favor
of labor.

Lastly, petitioner avers that the CA, in concluding that the NLRC Decision was supported by
substantial evidence, failed to specify what constituted said evidence. Thus, petitioner asserts that
the CA acted arbitrarily in affirming the Decision of the NLRC.

In its Comment, respondent contends that the ruling in Agustilo is an exception rather than the
general rule; that the general rule is that in a petition for certiorari, judicial review by this Court or by
the CA in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which
the proper labor officer or office based his or its determination but is limited only to issues of
jurisdiction or grave abuse of discretion amounting to lack of jurisdiction; that before a party may ask
that the CA or this Court review the factual findings of the NLRC, there must first be a convincing
argument that the NLRC acted in a capricious, whimsical, arbitrary or despotic manner; and that in
its petition for certiorari filed with the CA, herein petitioner failed to prove that the NLRC acted
without or in excess of jurisdiction or with grave abuse of discretion.

Respondent argues that Agustilo is not applicable to the present case because in the former case,
the findings of fact of the LA and the NLRC are at variance with each other; while in the present
case, the findings of fact and conclusions of law of the LA and the NLRC are the same.

Respondent also avers that in a special civil action for certiorari, the discretionary power to review
factual findings of the NLRC rests upon the CA; and that absent any findings by the CA of the need
to resolve any unclear or ambiguous factual findings of the NLRC, the grant of the writ of certiorari is
not warranted.

Further, respondent contends that even granting that the factual findings of the CA, NLRC and the
LA may be reviewed in the present case, petitioner failed to present valid arguments to warrant the
reversal of the assailed decision.

Respondent avers that the DOLE Order is an administrative regulation which interprets the 13th-
Month Pay Law (P.D. No. 851) and, as such, it is mandatory for the LA to apply the same to the
present case.

Moreover, respondent contends that the Legal Services Office of the DOLE issued an opinion dated
March 4, 1992,12 that remunerations for teaching in excess of the regular load, which includes
overload pay for work performed within an eight-hour work day, may not be included as part of the
basic salary in the computation of the 13th-month pay unless this has been included by company
practice or policy; that petitioner intentionally omitted any reference to the above-mentioned opinion
of the Legal Services Office of the DOLE because it is fatal to its cause; and that the DOLE Order is
an affirmation of the opinion rendered by the said Office of the DOLE.

Furthermore, respondent claims that, contrary to the asseveration of petitioner, prior to the issuance
of the DOLE Order, the prevailing rule is to exclude excess teaching load, which is akin to overtime,
in the computation of a teacher's basic salary and, ultimately, in the computation of his 13th-month
pay.
As to respondent's alleged non-payment of petitioner's consolidated money claims, respondent
contends that the findings of the LA regarding these matters, which were affirmed by the NLRC and
the CA, have clear and convincing factual and legal bases to stand on.

The Court’s Ruling

The Court finds the petition bereft of merit.

As to the first and third assigned errors, petitioner would have this Court review the factual findings
of the LA as affirmed by the NLRC and the CA, to wit.

With respect to the alleged non-payment of benefits under Wage Order No. 5, this Office is
convinced that after the lapse of the one-year period of exemption from compliance with
Wage Order No. 5 (Exhibit "1-B), which exemption was granted by then Labor Minister Blas
Ople, the School settled its obligations to its employees, conformably with the agreement
reached during the management-employees meeting of June 26, 1985 (Exhibits "4-B" up to
"4-D", also Exhibit "6-x-1"). The Union has presented no evidence that the settlement
reached during the June 26, 1985 meeting was the result of coercion. Indeed, what is
significant is that the agreement of June 26, 1985 was signed by Mr. Porferio Ferrer, then
Faculty President and an officer of the complaining Union. Moreover, the samples from the
payroll journal of the School, identified and offered in evidence in these cases (Exhibits "1-C"
and 1-D"), shows that the School paid its employees the benefits under Wage Order No. 5
(and even Wage Order No. 6) beginning June 16, 1985.

Under the circumstances, therefore, the claim of the Union on this point must likewise fail.

The claim of the Union for salary differentials due to the improper computation of
compensation per unit of excess load cannot hold water for the simple reason that during the
Schoolyears in point there were no classes from June 1-14 and October 17-31. This fact was
not refuted by the Union. Since extra load should be paid only when actually performed by
the employees, no salary differentials are due the Union members.

The non-academic members of the Union cannot legally insist on wage increases due to
"Job Grading". From the records it appears that "Job Grading" is a system adopted by the
School by which positions are classified and evaluated according to the prescribed
qualifications therefor. It is akin to a merit system whereby salary increases are made
dependent upon the classification, evaluation and grading of the position held by an
employee.

The system of Job Grading was initiated by the School in Schoolyear 1989-1990. In 1992,
just before the first of the two money claims was filed, a new Job Grading process was
initiated by the School.

Under the circumstances obtaining, it cannot be argued that there were repeated grants of
salary increases due to Job Grading to warrant the conclusion that some benefit was granted
in favor of the non-academic personnel that could no longer be eliminated or banished under
Article 100 of the Labor Code. Since the Job Grading exercises of the School were neither
consistent nor for a considerable period of time, the monetary claims attendant to an
increase in job grade are non-existent.

The claim of the Union that its members were not given their full share in the tuition fee
increases for the Schoolyears 1989-1990, 1990-1991 and 1991-1992 is belied by the
 evidence presented by the School which consists of the unrefuted testimony of its
Accounting Coordinator, Ms. Rosario Manlapaz, and the reports extrapolated from the
journals and general ledgers of the School (Exhibits "2", "2-A" up to "2-G"). The evidence
indubitably shows that in Schoolyear 1989-1990, the School incurred a deficit
of P445,942.25, while in Schoolyears 1990-1991 and 1991-1992, the School paid out, 91%
and 77%, respectively, of the increments in the tuition fees collected.

As regards the issue of non-payment of holiday pay, the individual pay records of the
School's employees, a sample of which was identified and explained by Ms. Rosario
Manlapaz (Exhibit "3"), shows that said School employees are paid for all days worked in the
year. Stated differently, the factor used in computing the salaries of the employees is 365,
which indicates that their regular monthly salary includes payment of wages during all legal
holidays.13

This Court held in Odango v. National Labor Relations Commission14 that:

The appellate court’s jurisdiction to review a decision of the NLRC in a petition for certiorari is
confined to issues of jurisdiction or grave abuse of discretion. An extraordinary remedy, a
petition for certiorari is available only and restrictively in truly exceptional cases. The sole
office of the writ of certiorari is the correction of errors of jurisdiction including the
commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does
not include correction of the NLRC’s evaluation of the evidence or of its factual findings.
Such findings are generally accorded not only respect but also finality. A party assailing such
findings bears the burden of showing that the tribunal acted capriciously and whimsically or
in total disregard of evidence material to the controversy, in order that the extraordinary writ
of certiorari will lie.15

In the instant case, the Court finds no error in the ruling of the CA that since nowhere in the petition
is there any acceptable demonstration that the LA or the NLRC acted either with grave abuse of
discretion or without or in excess of its jurisdiction, the appellate court has no reason to look into the
correctness of the evaluation of evidence which supports the labor tribunals' findings of fact.

Settled is the rule that the findings of the LA, when affirmed by the NLRC and the CA, are binding on
the Supreme Court, unless patently erroneous.16 It is not the function of the Supreme Court to
analyze or weigh all over again the evidence already considered in the proceedings below.17 In a
petition for review on certiorari, this Court’s jurisdiction is limited to reviewing errors of law in the
absence of any showing that the factual findings complained of are devoid of support in the records
or are glaringly erroneous.18 Firm is the doctrine that this Court is not a trier of facts, and this applies
with greater force in labor cases.19 Findings of fact of administrative agencies and quasi-judicial
bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are
generally accorded not only great respect but even finality.20 They are binding upon this Court unless
there is a showing of grave abuse of discretion or where it is clearly shown that they were arrived at
arbitrarily or in utter disregard of the evidence on record.21 We find none of these exceptions in the
present case.

In petitions for review on certiorari like the instant case, the Court invariably sustains the unanimous
factual findings of the LA, the NLRC and the CA, specially when such findings are supported by
substantial evidence and there is no cogent basis to reverse the same, as in this case.22

The second assigned error properly raises a question of law as it involves the determination of
whether or not a teacher's overload pay should be considered in the computation of his or her 13th-
month pay. In resolving this issue, the Court is confronted with conflicting interpretations by different
government agencies.

On one hand is the opinion of the Bureau of Working Conditions of the DOLE dated December 9,
1991, February 28, 1992 and November 19, 1992 to the effect that if overload is performed within a
teacher's normal eight-hour work per day, the remuneration that the teacher will get from the
additional teaching load will form part of the basic wage.23

This opinion is affirmed by the Explanatory Bulletin on the Inclusion of Teachers' Overload Pay in the
13th-Month Pay Determination issued by the DOLE on December 3, 1993 under then Acting DOLE
Secretary Cresenciano B. Trajano. Pertinent portions of the said Bulletin read as follows:

1. Basis of the 13th-month pay computation

The Revised Implementing Guidelines of the 13th-Month Pay Law (P.D. 851, as amended)
provides that an employee shall be entitled to not less than 1/12 of the total basic salary
earned within a calendar year for the purpose of computing such entitlement. The basic
wage of an employee shall include:

"x x x all remunerations or earnings paid by his employer for services rendered but do not
include allowances or monetary benefits which are not considered or integrated as part of
the regular or basic salary, such as the cash equivalent of unused vacation and sick leave
credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances.
However, these salary-related benefits should be included as part of the basic salary in the
computation of the 13th month pay if by individual or collective agreement, company practice
or policy, the same are treated as part of the basic salary of the employees."

Basic wage is defined by the Implementing Rules of RA 6727 as follows:

"Basic Wage" means all remuneration or earnings paid by an employer to a worker for
services rendered on normal working days and hours but does not include cost of living
allowances, 13th-month pay or other monetary benefits which are not considered as part of
or integrated into the regular salary of the workers xxx.

The foregoing definition was based on Article 83 of the Labor Code which provides that
"the normal hours of work of any employee shall not exceed eight (8) hours a day." This
means that the basic salary of an employee for the purpose of computing the 13th-month
pay shall include all remunerations or earnings paid by an employer for services rendered
during normal working hours.

2. Overload work/pay

Overload on the other hand means "the load in excess of the normal load of private school
teachers as prescribed by the Department of Education, Culture and Sports (DECS) or the
policies, rules and standards of particular private schools." In recognition of the peculiarities
of the teaching profession, existing DECS and School Policies and Regulations for different
levels of instructions prescribe a regular teaching load, the total actual teaching or classroom
hours of which a teacher can generally perform in less than eight (8) hours per working day.
This is because teaching may also require the teacher to do additional work such as
handling an advisory class, preparation of lesson plans and teaching aids, evaluation of
students and other related activities. Where, however a teacher is engaged to undertake
actual additional teaching work after completing his/her regular teaching load, such
 additional work is generally referred to as overload. In short, additional work in excess of the
regular teaching load is overload work. Regular teaching load and overload work, if any,
may constitute a teacher's working day.

Where a teacher is required to perform such overload within the eight (8) hours
normal working day, such overload compensation shall be considered part of the
basic pay for the purpose of computing the teacher's 13th-month pay. "Overload work"
is sometimes misunderstood as synonymous to "overtime work" as this term is used and
understood in the Labor Code. These two terms are not the same because overtime work is
work rendered in excess of normal working hours of eight in a day (Art. 87, Labor Code).
Considering that overload work may be performed either within or outside eight hours in a
day, overload work may or may not be overtime work.

3. Concluding Statement

In the light of the foregoing discussions, it is the position of this Department that all basic
salary/wage representing payments earned for actual work performed during or within the
eight hours in a day, including payments for overload work within eight hours, form part of
basic wage and therefore are to be included in the computation of 13th-month pay mandated
by PD 851, as amended.24 (Underscoring supplied)

On the other hand, the Legal Services Department of the DOLE holds in its opinion of March 4, 1992
that remunerations for teaching in excess of the regular load shall be excluded in the computation of
the 13th-month pay unless, by school policy, the same are considered as part of the basic salary of
the qualified teachers.25

This opinion is later affirmed by the DOLE Order, pertinent portions of which are quoted below:

xxxx

2. In accordance with Article 83 of the Labor Code of the Philippines, as amended, the
normal hours of work of school academic personnel shall not exceed eight (8) hours a
day. Any work done in addition to the eight (8) hours daily work shall constitute
overtime work.

3. The normal hours of work of teaching or academic personnel shall be based on their
normal or regular teaching loads. Such normal or regular teaching loads shall be in
accordance with the policies, rules and standards prescribed by the Department of
Education, Culture and Sports, the Commission on Higher Education and the Technical
Education and Skills Development Authority. Any teaching load in excess of the normal
or regular teaching load shall be considered as overload. Overload partakes of the
nature of temporary extra assignment and compensation therefore shall be considered as an
overload honorarium if performed within the 8-hour work period and does not form part of
the regular or basic pay. Overload performed beyond the eight-hour daily work is overtime
work.26 (Emphasis supplied)

It was the above-quoted DOLE Order which was used by the LA as basis for ruling against herein
petitioner.

The petitioner’s claim that the DOLE Order should not be made to apply to the present case
because said Order was issued only in 1996, approximately four years after the present case was
initiated before the Regional Arbitration Branch of the NLRC, is not without basis. The general rule is
that administrative rulings and circulars shall not be given retroactive effect.27

Nevertheless, it is a settled rule that when an administrative or executive agency renders an

opinion or issues a statement of policy, it merely interprets a pre-existing law and the
administrative interpretation is at best advisory for it is the courts that finally determine what
the law means.28

In the present case, while the DOLE Order may not be applicable, the Court finds that overload pay
should be excluded from the computation of the 13th-month pay of petitioner's members.

In resolving the issue of the inclusion or exclusion of overload pay in the computation of a teacher's
13th-month pay, it is decisive to determine what "basic salary" includes and excludes.

In this respect, the Court's disquisition in San Miguel Corporation v. Inciong29 is instructive, to wit:

Under Presidential Decree 851 and its implementing rules, the basic salary of an employee
is used as the basis in the determination of his 13th month pay. Any compensations or
remunerations which are deemed not part of the basic pay is excluded as basis in the
computation of the mandatory bonus.

Under the Rules and Regulations Implementing Presidential Decree 851, the following
compensations are deemed not part of the basic salary:

a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of

Instruction No. 174;

b) Profit sharing payments;

c) All allowances and monetary benefits which are not considered or integrated as part of the
regular basic salary of the employee at the time of the promulgation of the Decree on
December 16, 1975.

Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree
851 issued by the then Labor Secretary Blas Ople, overtime pay, earnings and other
remunerations are excluded as part of the basic salary and in the computation of the 13th-
month pay.

The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of
Instruction No. 174 and profit sharing payments indicate the intention to strip basic salary of
other payments which are properly considered as "fringe" benefits. Likewise, the catch-all
exclusionary phrase "all allowances and monetary benefits which are not considered or
integrated as part of the basic salary" shows also the intention to strip basic salary of any
and all additions which may be in the form of allowances or "fringe" benefits.

Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree 851
is even more emphatic in declaring that earnings and other remunerations which are not part
of the basic salary shall not be included in the computation of the 13th-month pay.

While doubt may have been created by the prior Rules and Regulations Implementing
Presidential Decree 851 which defines basic salary to include all remunerations or earnings
 paid by an employer to an employee, this cloud is dissipated in the later and more controlling
Supplementary Rules and Regulations which categorically, exclude from the definition of
basic salary earnings and other remunerations paid by employer to an employee. A cursory
perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad
inclusion is now a subject of broad exclusion. The Supplementary Rules and Regulations
cure the seeming tendency of the former rules to include all remunerations and earnings
within the definition of basic salary.

The all-embracing phrase "earnings and other remunerations" which are deemed not part of
the basic salary includes within its meaning payments for sick, vacation, or maternity leaves,
premium for works performed on rest days and special holidays, pay for regular holidays and
night differentials. As such they are deemed not part of the basic salary and shall not be
considered in the computation of the 13th-month pay. If they were not so excluded, it is hard
to find any "earnings and other remunerations" expressly excluded in the computation of the
13th-month pay. Then the exclusionary provision would prove to be idle and with no purpose.

This conclusion finds strong support under the Labor Code of the Philippines. To cite a few
provisions:

"Art. 87 – Overtime work. Work may be performed beyond eight (8) hours a day provided
that the employee is paid for the overtime work, additional compensation equivalent to his
regular wage plus at least twenty-five (25%) percent thereof."

It is clear that overtime pay is an additional compensation other than and added to the
regular wage or basic salary, for reason of which such is categorically excluded from the
definition of basic salary under the Supplementary Rules and Regulations Implementing
Presidential Decree 851.

In Article 93 of the same Code, paragraph

"c.) work performed on any special holiday shall be paid an additional compensation of at
least thirty percent (30%) of the regular wage of the employee."

It is likewise clear that premium for special holiday which is at least 30% of the regular wage
is an additional compensation other than and added to the regular wage or basic salary. For
similar reason it shall not be considered in the computation of the 13th -month pay.30

In the same manner that payment for overtime work and work performed during special holidays is
considered as additional compensation apart and distinct from an employee's regular wage or basic
salary, an overload pay, owing to its very nature and definition, may not be considered as part of a
teacher's regular or basic salary, because it is being paid for additional work performed in excess of
the regular teaching load.

The peculiarity of an overload lies in the fact that it may be performed within the normal eight-hour
working day. This is the only reason why the DOLE, in its explanatory bulletin, finds it proper to
include a teacher's overload pay in the determination of his or her 13th-month pay. However, the
DOLE loses sight of the fact that even if it is performed within the normal eight-hour working day, an
overload is still an additional or extra teaching work which is performed after the regular teaching
load has been completed. Hence, any pay given as compensation for such additional work should
be considered as extra and not deemed as part of the regular or basic salary.
Moreover, petitioner failed to refute private respondent's contention that excess teaching load is paid
by the hour, while the regular teaching load is being paid on a monthly basis; and that the
assignment of overload is subject to the availability of teaching loads. This only goes to show that
overload pay is not integrated with a teacher's basic salary for his or her regular teaching load. In
addition, overload varies from one semester to another, as it is dependent upon the availability of
extra teaching loads. As such, it is not legally feasible to consider payments for such overload as
part of a teacher's regular or basic salary. Verily, overload pay may not be included as basis for
determining a teacher's 13th-month pay.

WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals are AFFIRMED.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

*RENATO C. CORONA ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice