DAVID vs. MACASIO G.R. No.
195466 | July 2, 2014 as Macasio is a task basis employee — who is paid the fixed amount of P700.00
Facts:
1. Macasio filed before the LA a complaint against petitioner Ariel L. David, doing
business under the name and style “Yiels Hog Dealer,” for nonpayment of
overtime pay, holiday pay and 13th month pay. Macasio also claimed service
incentive leave (SIL).
2. Macasio alleged that he had been working as butcher for David since 1995; that
David exercised control and supervision over him by setting the work day,
reporting time and hogs to be chopped as well as manner of work; that David daily
paid his salaray of P700.00; that David approved and disapproved his leaves.
Macasio added that David owned the hogs as well as the tools, that David also
rented the workplace and that David had 25 butchers and delivery drivers.
3. In his defense, David claimed that he started his hog dealer business in 2005 and
that he only has ten employees. He alleged that he hired Macasio as a butcher or
chopper on “pakyaw” or task basis who is, therefore, not entitled to overtime pay,
holiday pay and 13th month pay pursuant to the Labor Code’s IRR. David pointed
out that Macasio: (1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m.
of the following day or earlier, depending on the volume of the delivered hogs;
(2) received the fixed amount of P700.00 per engagement, regardless of the actual
number of hours that he spent chopping the delivered hogs; and (3) was not
engaged to report for work and, accordingly, did not receive any fee when no hogs
were delivered.
4. Macasio disputed David’s allegations. Macasio argued that, as per a Certificate of
Employment that David issued in his favor which erroneously placed Macasio’s
employment date at 2000, David did not start his business only in 2005. Also, he
reported for work every day which the payroll or time record could have easily
proved had David submitted them in evidence.
5. Refuting Macasio’s submissions, David claims that Macasio was not his
employee as he hired the latter on “pakyaw” or task basis. He also claimed that
he issued the Certificate of Employment, upon Macasio’s request, only for
overseas employment purposes. He pointed to the “Pinagsamang Sinumpaang
Salaysay,” executed by Presbitero Solano and Christopher (Antonio Macasio’s
co-butchers), to corroborate his claims.
6. LA dismissed the claims, giving credence to the pakyaw basis claim which makes
Macasio not entitled to overtime, holiday, SIL and 13 th month pay. NLRC
affirmed LA. CA partly granted Macasio’s certiorari petition, awarding his claim
for holiday, SIL and 13th month pay.
7. In this petition, David maintains that Macasio’s engagement was on a “pakyaw”
or task basis. Hence, the latter is excluded from the coverage of holiday, SIL and
13th month pay. David adds that he never had any control over the manner by
which Macasio performed his work and he simply looked on to the “end-result.”
He also contends that he never compelled Macasio to report for work and that
under their arrangement, Macasio was at liberty to choose whether to report for
work or not as other butchers could carry out his tasks. He points out that Solano
and Antonio had, in fact, attested to their (David and Macasio’s) established
“pakyawan” arrangement that rendered a written contract unnecessary. In as much
per engagement regardless of the time consumed in the performance — David
argues that Macasio is not entitled to the benefits he claims. Also, he posits that
because he engaged Macasio on “pakyaw” or task basis then no employer-
employee relationship exists between them.
Issues:
1) Whether an employer-employee relationship exists.
2) Whether those on pakyaw basis are entitled to holiday pay and SIL.
3) Whether Macasio is entitled to his claim.
Ratio Decidendi:
1) YES. First, David engaged the services of Macasio, thus satisfying the element
of “selection and engagement of the employee.” This is evidenced by David’s
“Sinumpaang Salaysay” wherein he admitted that Macasio applied for the job and
was accepted by David, and by Solano and Antonio’s “Pinagsamang Sinumpaang
Salaysay” wherein they attested to Macasio being their co-worker. Second, David
paid Macasio’s wages. Both David and Macasio categorically stated in their
respective pleadings before the lower tribunals and even before this Court that the
former had been paying the latter P700.00 each day after the latter had finished
the day’s task. Solano and Antonio also confirmed this fact of wage payment in
their “Pinagsamang Sinumpaang Salaysay.” Third, David had been setting the day
and time when Macasio should report for work. By having power to control
Macasio’s schedule, he can regulate the work and could even refuse to give him
any assignment, thereby effectively dismissing him. And fourth, David had the
right and power to control and supervise Macasio’s work as to the means and
methods of performing it. In addition to setting the day and time when Macasio
should report for work, the established facts show that David rents the place where
Macasio had been performing his tasks. Moreover, Macasio would leave the
workplace only after he had finished chopping all of the hog meats given to him
for the day’s task. Also, David would still engage Macasio’s services and have
him report for work even during the days when only few hogs were delivered for
butchering.
A distinguishing characteristic of “pakyaw” or task basis engagement, as opposed
to straight-hour wage payment, is the non-consideration of the time spent in
working. In a task-basis work, the emphasis is on the task itself, in the sense that
payment is reckoned in terms of completion of the work, not in terms of the
number of time spent in the completion of work. Once the work or task is
completed, the worker receives fixed amount as wage, without regard to the
standard measurement of time generally used in pay computation.
In Macasio’s case, the established facts show that he would usually start his work
at 10:00 p.m. Thereafter, regardless of the total hours that he spent at the
workplace or of the total number of the hogs assigned to him for chopping,
Macasio would receive the fixed amount of P700.00 once he had completed his
task. Clearly, these circumstances show a “pakyaw” or task basis engagement that
all three tribunals uniformly found.

2) YES. Article 82 LC provides that the provisions of Title I (working conditions
and rest periods) do not apply to field personnel and workers who are paid by
results as determined by Secretary of Labor in appropriate regulations. “Field
personnel” shall refer to nonagricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer
and whose actual hours of work in the field cannot be determined with reasonable
certainty.
Article 94 provides for right to holiday pay, and its IRR states that it shall
apply to all employees except to “Field personnel and other employees
whose time and performance is unsupervised by the employer including
those who are engaged on task or contract basis.” On the other hand,
Article 95 provides for right to SIL, and its IRR provides that it applies to all
employees except to “Field personnel and other employees whose
performance is unsupervised by the employer including those who are
engaged on task or contract basis.”
Note that unlike Article 82, the IRR on holiday and SIL pay do not exclude
employees “engaged on task basis” as a separate and distinct category from
employees classified as “field personnel.” Rather, these employees are
altogether merged into one classification of exempted employees.
The resolution of the issue hinges on how to interpret the phrase “those who
are engaged on task or contract basis.” According to decided cases, the phrase
should be related with field personnel applying the rule on ejusdem generis.
In other words, the payment of an employee on task or pakyaw basis alone is
insufficient to exclude one from the coverage of SIL and holiday pay. They
are exempted from the coverage of Title I (including the holiday and SIL pay)
only if they qualify as “field personnel.”
Thus, in Serrano vs. Severino Santos Transit (which was the legal basis of
the CA ruling), the Court, applying the rule on ejusdem generis, declared that
“employees engaged on task or contract basis are not automatically exempted
from the grant of service incentive leave, unless, they fall under the
classification of field personnel.” The Court explained that the phrase
“including those who are engaged on task or contract basis, purely
commission basis” found in Section 1(d), Rule V of Book III of the IRR
should not be understood as a separate classification of employees to which
SIL shall not be granted. Rather, as with its preceding phrase — “other
employees whose performance is unsupervised by the employer” — the
phrase “including those who are engaged on task or contract basis” serves to
amplify the interpretation of the Labor Code definition of “field personnel”
as those “whose actual hours of work in the field cannot be determined with
reasonable certainty.” Although Serrano speaks only of SIL pay, the principle
still applies to holiday pay since the exempting phrases under the IRR’s for
SIL and holiday pay are identical.
In short, in determining whether workers engaged on “pakyaw” or task basis
is entitled to holiday and SIL pay, the presence (or absence) of employer
supervision as regards the worker’s time and performance is the key: if the
worker is simply engaged on pakyaw or task basis, then the general rule is
that he is entitled to a holiday pay and SIL pay unless exempted from the
exceptions specifically provided under Article 94 (holiday pay) and Article
95 (SIL pay) of the Labor Code. However, if the worker engaged on pakyaw
or task basis also falls within the meaning of “field personnel” under the law,
then he is not entitled to these monetary benefits.
3) PARTLY YES. Macasio is entitled to his claim insofar as holiday pay and SIL is
concerned. He is not field personnel. First, Macasio regularly performed his duties
at David’s principal place of business; Second, his actual hours of work could be
determined with reasonable certainty; and Third, David supervised his time and
performance of duties. Since Macasio cannot be considered a “field personnel,”
then he is not exempted from the grant of holiday, SIL pay even as he was engaged
on “pakyaw” or task basis.
With respect to 13th month pay which is governed by PD 851, Macasio cannot
claim. PD 851’s IRR provides that those who are paid on task basis, and those
who are paid a fixed amount for performing a specific work, irrespective of
time consumed in performance thereof, are exempted from 13 th month pay
benefits. Note that unlike the IRR of the Labor Code on holiday and SIL pay,
PD 851’s IRR exempts employees “paid on task basis” without any reference
to “field personnel.” This could only mean that, insofar as payment of the
13th month pay is concerned, the law did not intend to qualify the exemption
from its coverage with the requirement that the task worker be a “field
personnel” at the same time.
Bisig Manggagawa sa Tryco v. NLRC G.R. No. 151309, 15 October 2008
Facts:
Tryco Pharma Corporation (Tryco) is a manufacturer of veterinary medicines
and its principal office is located in Caloocan City. Petitioners Joselito Lariño,
Vivencio Barte, Saturnino Egera and Simplicio Aya-ay are its regular employees,
occupying the positions of helper, shipment helper and factory workers, respectively,
assigned to the Production Department. They are members of Bisig Manggagawa sa
Tryco (BMT), the exclusive bargaining representative of the rank-and-file employees.
Tryco and the petitioners signed separate Memoranda of Agreement 2
(MOA), providing for a compressed workweek schedule to be implemented in the
company effective May 20, 1996. The MOA was entered into pursuant to Department
of Labor and Employment Department Order (D.O.) No. 21, Series of 1990,
Guidelines on the Implementation of Compressed Workweek.
As provided in the MOA, 8:00 a.m. to 6:12 p.m., from Monday to Friday,
shall be considered as the regular working hours, and no overtime pay shall be due and
payable to the employee for work rendered during those hours. The MOA specifically
stated that the employee waives the right to claim overtime pay for work rendered after
5:00 p.m. until 6:12 p.m. from Monday to Friday considering that the compressed
workweek schedule is adopted in lieu of the regular work-week schedule which also
consists of 46 hours. However, should an employee be permitted or required to work
beyond 6:12 p.m., such employee shall be entitled to overtime pay.
 Tryco informed the Bureau of Working Conditions of the Department of
Labor and Employment of the implementation of a compressed workweek in the
company. In January 1997, BMT and Tryco negotiated for the renewal of their
collective bargaining agreement (CBA) but failed to arrive at a new agreement.
Meantime, Tryco received the Letter dated March 26, 1997 from the Bureau of Animal
Industry of the Department of Agriculture reminding it that its production should be
conducted in San Rafael, Bulacan, not in Caloocan City. Accordingly, Tryco issued a
Memorandum dated April 7, 1997 which directed petitioner Aya-ay to report to the
company’s plant site in Bulacan. When petitioner Aya-ay refused to obey, Tryco
reiterated the order on April 18, 1997. Subsequently, through a Memorandum dated
May 9, 1997, Tryco also directed petitioners Egera, Lariño and Barte to report to the
company’s plant site in Bulacan.
BMT opposed the transfer of its members to San Rafael, Bulacan, contending
that it constitutes unfair labor practice. In protest, BMT declared a strike on May 26,
1997. In August 1997, petitioners filed their separate complaints 8 for illegal dismissal,
underpayment of wages, nonpayment of overtime-pay and service incentive leave, and
refusal to bargain against Tryco and its President, Wilfredo C. Rivera. In their Position
Paper, petitioners alleged that the company acted in bad faith during the CBA
negotiations because it sent representatives without authority to bind the company, and
this was the reason why the negotiations failed. They added that the management
transferred petitioners Lariño, Barte, Egera and Aya-ay from Caloocan to San Rafael,
Bulacan to paralyze the union. They prayed for the company to pay them their salaries
from May 26 to 31, 1997, service incentive leave, and overtime pay, and to implement
Wage Order No. 4.
In their defense, respondents averred that the petitioners were not dismissed
but they refused to comply with the management’s directive for them to report to the
company’s plant in San Rafael, Bulacan. They denied the allegation that they
negotiated in bad faith, stating that, in fact, they sent the Executive Vice-President and
Legal Counsel as the company’s representatives to the CBA negotiations.
They claim that the failure to arrive at an agreement was due to the
stubbornness of the union panel. Respondents further averred that, long before the start
of the negotiations, the company had already been planning to decongest the Caloocan
office to comply with the government policy to shift the concentration of
manufacturing activities from the metropolis to the countryside. The decision to
transfer the company’s production activities to San Rafael, Bulacan was precipitated
by the letter-reminder of the Bureau of Animal Industry.
On February 27, 1998, the Labor Arbiter dismissed the case for lack of merit.
The Labor Arbiter held that the transfer of the petitioners would not paralyze or render
the union ineffective for the following reasons: (1) complainants are not members of
the negotiating panel; and (2) the transfer was made pursuant to the directive of the
Department of Agriculture. The Labor Arbiter also denied the money claims,
ratiocinating that the nonpayment of wages was justified because the petitioners did
not render work from May 26 to 31, 1997; overtime pay is not due because of the
compressed workweek agreement between the union and management; and service
incentive leave pay cannot be claimed by the complainants because they are already
enjoying vacation leave with pay for at least five days. As for the claim of
noncompliance with Wage Order No. 4, the Labor Arbiter held that the issue should
be left to the grievance machinery or voluntary arbitrator.
On October 29, 1999, the NLRC affirmed the Labor Arbiter’s Decision,
dismissing the case. Complainants Joselito Lariño, Vivencio Barte, Saturnino Egera
and Simplicio Aya-ay are directed to report to work at respondents’ San Rafael Plant,
Bulacan but without backwages. Respondents are directed to accept the complainants
back to work.
On December 22, 1999, the NLRC denied the petitioners’ motion for
reconsideration for lack of merit. Left with no recourse, petitioners filed a petition for
certiorari with the CA. On July 24, 2001, the CA dismissed the petition for certiorari
and ruled that the transfer order was a management prerogative not amounting to a
constructive dismissal or an unfair labor practice. The CA further sustained the
enforceability of the MOA, particularly the waiver of overtime pay in light of this
Court’s rulings upholding a waiver of benefits in exchange of other valuable
privileges.
Issue:
1. Whether there was illegal constructive dismissal of the petitioners.
2. Whether private respondents committed unfair labor practice.
3. Whether the MOA is not enforceable as it is contrary to law.
Held:
1. No. There is no reason to deviate from the well-entrenched rule that
findings of fact of labor officials, who are deemed to have acquired expertise in matters
within their respective jurisdiction, are generally accorded not only respect but even
finality, and bind us when supported by substantial evidence. This is particularly true
when the findings of the Labor Arbiter, the NLRC and the CA are in absolute
agreement.
Petitioners mainly contend that the transfer orders amount to a constructive
dismissal. They maintain that the letter of the Bureau of Animal Industry is not credible
because it is not authenticated; it is only a ploy, solicited by respondents to give them
an excuse to effect a massive transfer of employees. The Court denied the petitioners’
wild and reckless imputation that the Bureau of Animal Industry conspired with the
respondents just to effect the transfer of the petitioners. There is not an iota of proof
to support the outlandish claim.
Furthermore, Tryco’s decision to transfer its production activities to San
Rafael, Bulacan, regardless of whether it was made pursuant to the letter of the Bureau
of Animal Industry, was within the scope of its inherent right to control and manage
its enterprise effectively. While the law is solicitous of the welfare of employees, it
must also protect the right of an employer to exercise what are clearly management
prerogatives.
When the transfer is not unreasonable, or inconvenient, or prejudicial to the
employee, and it does not involve a demotion in rank or diminution of salaries,
benefits, and other privileges, the employee may not complain that it amounts to a
constructive dismissal. However, the employer has the burden of proving that the
transfer of an employee is for valid and legitimate grounds.
In the instant case, the transfer orders do not entail a demotion in rank or
diminution of salaries, benefits and other privileges of the petitioners. Petitioners,
therefore, anchor their objection solely on the ground that it would cause them great
inconvenience since they are all residents of Metro Manila and they would incur
additional expenses to travel daily from Manila to Bulacan. The Court declared that
mere incidental inconvenience is not sufficient to warrant a claim of constructive
dismissal.
2. No. The Court could not see how the mere transfer of its members
can paralyze the union. The union was not deprived of the membership of the
petitioners whose work assignments were only transferred to another location. There
was no showing or any indication that the transfer orders were motivated by an
intention to interfere with the petitioners’ right to organize.
Unfair labor practice refers to acts that violate the workers’ right to organize.
With the exception of Article 248(f) of the Labor Code of the Philippines, the
prohibited acts are related to the workers’ right to self-organization and to the
observance of a CBA. Without that element, the acts, no matter how unfair, are not
unfair labor practices.
3. No. The MOA is enforceable and binding against the petitioners.
Where it is shown that the person making the waiver did so voluntarily, with full
understanding of what he was doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and binding undertaking.
D.O. No. 21 sanctions the waiver of overtime pay in consideration of the
benefits that the employees will derive from the adoption of a compressed workweek
scheme. Moreover, the adoption of a compressed workweek scheme in the company
will help temper any inconvenience that will be caused the petitioners by their transfer
to a farther workplace.
Notably, the MOA complied with the conditions set by the DOLE, under
D.O. No. 21, to protect the interest of the employees in the implementation of a
compressed workweek scheme:
1. Employees voluntarily agree to work more than 8 hours a day the total
in a week shall not exceed normal weekly hours of work prior to the
compressed workweek.
2. No diminution whatsoever of weekly or monthly take-home pay and
fringe benefits.
3. If an employee is permitted or required to work in excess of his normal
weekly hours prior to adoption of the compressed workweek scheme, all
such excess shall be considered overtime work and compensated in
accordance with the LC and CBA.
4. Appropriate waivers with respect to overtime premium pay for work
performed in excess of 8 hours a day may be devised by the parties to
the agreement.
5. Effectivity and implementation shall be by agreement of the parties.
Considering that the MOA clearly states that the employee waives the
payment of overtime pay in exchange of a five-day workweek, there is no room for
interpretation and its terms should be implemented as they are written.
PENARANDA vs. BAGANGA G.R. No. 159577 | May 3, 2006
Facts:
1. Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywood
Corporation (BPC) to take charge of the operations and maintenance of its steam
plant boiler. He filed a Complaint for illegal dismissal with money claims against
BPC and its general manager, Hudson Chua, before the NLRC.
2. He alleges that he was employed by respondent BPC on March 15, 1999 with a
monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was
illegally terminated on December 19, 2000. Further, he alleges that his services
were terminated without the benefit of due process and valid grounds in
accordance with law. Furthermore, he was not paid his overtime pay, premium
pay for working during holidays/rest days, night shift differentials and finally
claims for payment of damages and attorney’s fees having been forced to litigate
the present complaint.
3. Respondents allege that his separation was done in pursuance of Art. 283 of the
Labor Code. BPC was on temporary closure due to repair and general
maintenance and it applied for clearance with the DOLE to shut down and to
dismiss employees. Due to petitioner’s insistence, he was paid his separation
benefits. Consequently, when BPC partially reopened in 2001, petitioner failed to
reapply. Hence, he was not terminated much less illegally. Moreover, he was not
a managerial employee and therefore he was not entitled of overtime pay. If ever
he rendered services beyond normal hours of work, there was no office
order/authorization for him to do so.
4. LA ruled that the temporary closure did not terminate petitioner’s employment;
hence, he need not reapply when the plant reopened. According to the labor
arbiter, petitioner’s money claims for illegal dismissal was also weakened by his
quitclaim and admission during the clarificatory conference that he accepted
separation benefits, sick and vacation leave conversions and thirteenth
month pay. Nevertheless, the labor arbiter found petitioner entitled to overtime
pay, premium pay for working on rest days, and attorney’s fees in the total amount
of P21,257.98.
5. On respondents’ appeal, NLRC deleted award of overtime pay and premium pay
for working rest days. CA dismissed petitioner’s petition for certiorari on
procedural grounds, to wit: 1) He failed to attach copies of pleadings he submitted
to LA and NLRC; and 2) He failed to explain why the filing and service of the
Petition was not done by personal service. MR denied. Hence, this petition.
Issues:
1) Whether the CA dismissal of petitioner’s petition was correct.
2) Whether respondents’ appeal to NLRC was timely.
3) Whether petitioner is entitled to overtime pay and premium pay for working
on rest days.
Ratio Decidendi:
1) NO. The Petition filed with the CA shows a prima facie case. Petitioner
attached his evidence to challenge the finding that he was a managerial
employee. In his MR, petitioner also submitted the pleadings before the labor
arbiter in an attempt to comply with the CA rules. Evidently, the CA could
have ruled on the Petition on the basis of these attachments. Petitioner should
be deemed in substantial compliance with the procedural requirements.
Rules of procedure must be adopted to help promote, not frustrate, substantial
justice. The Court frowns upon the practice of dismissing cases purely on
procedural grounds. Considering that there was substantial compliance, a
liberal interpretation of procedural rules in this labor case is more in keeping
with the constitutional mandate to secure social justice.
2) YES. Under the Rules of Procedure of the NLRC, an appeal from the decision
of the labor arbiter should be filed within 10 days from receipt thereof.
Petitioner’s claim that respondents filed their appeal beyond the required
period is not substantiated. In the pleadings before us, petitioner fails to
indicate when respondents received the Decision of the labor arbiter. Neither
did the petitioner attach a copy of the challenged appeal. Thus, this Court has
no means to determine from the records when the 10-day period commenced
and terminated.
3) NO. Article 82 of the Labor Code exempts managerial employees from the
coverage of labor standards. Labor standards provide the working conditions
of employees, including entitlement to overtime pay and premium pay for
working on rest days. Under this provision, managerial employees are “those
whose primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision.”
IRR of Labor Code provides for the following conditions to be a managerial
employee:
a) Their primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof;
b) They customarily and regularly direct the work of two or more
employees therein;
c) They have the authority to hire or fire other employees of lower rank; or
their suggestions and recommendations as to the hiring and firing and as
to the promotion or any other change of status of other employees are
given particular weight.
Petitioner is not a managerial employee, but a member of the managerial
staff, which also takes him out of coverage of labor standards. IRR provides
for duties and responsibilities of members of managerial staff:
a) The primary duty consists of the performance of work directly related to
management policies of the employer;
b) Customarily and regularly exercise discretion and independent
judgment;
c) (i) Regularly and directly assist a proprietor or a managerial employee
whose primary duty consists of the management of the establishment in
which he is employed or subdivision thereof; or (ii) execute under
general supervision work along specialized or technical lines requiring
special training, experience, or knowledge; or (iii) execute under general
supervision special assignments and tasks; and
d) who do not devote more than 20 percent of their hours worked in a
workweek to activities which are not directly and closely related to the
performance of the work described in paragraphs (1), (2), and (3) above.
As shift engineer, petitioner’s duties and responsibilities include supervising,
checking and monitoring manpower workmanship as well as operation of
boiler and accessories; evaluating performance of machinery and manpower;
training new employees for effectivity and safety while working; and
recommending personnel actions such as promotion or disciplinary actions.
Petitioner supervised the engineering section of the steam plant boiler. His
work involved overseeing the operation of the machines and the performance
of the workers in the engineering section. This work necessarily required the
use of discretion and independent judgment to ensure the proper functioning
of the steam plant boiler. As supervisor, petitioner is deemed a member of
the managerial staff.
Noteworthy, even petitioner admitted that he was a supervisor. In his Position
Paper, he stated that he was the foreman responsible for the operation of the
boiler. The term foreman implies that he was the representative of
management over the workers and the operation of the department.
Petitioner’s evidence also showed that he was the supervisor of the steam
plant. His classification as supervisor is further evident from the manner his
salary was paid. He belonged to the 10% of respondent’s 354 employees who
were paid on a monthly basis; the others were paid only on a daily basis.
Royal Plant Workers Union v. Coca-Cola Bottlers Philippines, Inc. – Cebu Plant
G.R. No. 198783, 15 April 2013
Facts:
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic
corporation engaged in the manufacture, sale and distribution of soft drink products.
It has several bottling plants all over the country, one of which is located in Cebu City.
Under the employ of each bottling plant are bottling operators. In the case of the plant
in Cebu City, there are 20 bottling operators who work for its Bottling Line 1 while
there are 12-14 bottling operators who man its Bottling Line 2. All of them are male
and they are members of herein respondent Royal Plant Workers Union (ROPWU).
The bottling operators work in two shifts. The first shift is from 8 a.m. to 5
p.m. and the second shift is from 5 p.m. up to the time production operations is
finished. Thus, the second shift varies and may end beyond eight (8) hours. However,
the bottling operators are compensated with overtime pay if the shift extends beyond
eight (8) hours. For Bottling Line 1, 10 bottling operators work for each shift while 6
to 7 bottling operators work for each shift for Bottling Line 2.
Each shift has rotations of work time and break time. Prior to September
2008, the rotation is this: after two and a half (2 ½) hours of work, the bottling
operators are given a 30-minute break and this goes on until the shift ends. In
September 2008 and up to the present, the rotation has changed and bottling operators
are now given a 30-minute break after one and one half (1 ½) hours of work.
In 1974, the bottling operators of then Bottling Line 2 were provided with
chairs upon their request. In 1988, the bottling operators of then Bottling Line 1
followed suit and asked to be provided also with chairs. Their request was likewise
granted. Sometime in September 2008, the chairs provided for the operators were
removed pursuant to a national directive of petitioner.
This directive is in line with the “I Operate, I Maintain, I Clean” program of
petitioner for bottling operators, wherein every bottling operator is given the
responsibility to keep the machinery and equipment assigned to him clean and safe.
The program reinforces the task of bottling operators to constantly move about in the
performance of their duties and responsibilities.
With this task of moving constantly to check on the machinery and equipment
assigned to him, a bottling operator does not need a chair anymore, hence, petitioner’s
directive to remove them. Furthermore, CCBPI rationalized that the removal of the
chairs is implemented so that the bottling operators will avoid sleeping, thus, prevent
injuries to their persons. As bottling operators are working with machines which
consist of moving parts, it is imperative that they should not fall asleep as to do so
would expose them to hazards and injuries. In addition, sleeping will hamper the
efficient flow of operations as the bottling operators would be unable to perform their
duties competently.
The bottling operators took issue with the removal of the chairs. Through the
representation of herein respondent, they initiated the grievance machinery of the
Collective Bargaining Agreement (CBA) in November 2008. Even after exhausting
the remedies contained in the grievance machinery, the parties were still at a deadlock
with petitioner still insisting on the removal of the chairs and respondent still against
such measure. As such, respondent sent a Notice to Arbitrate, dated 16 July 2009, to
petitioner stating its position to submit the issue on the removal of the chairs for
arbitration.
Nevertheless, before submitting to arbitration the issue, both parties availed
of the conciliation/mediation proceedings before the National Conciliation and
Mediation Board (NCMB) Regional Branch No. VII. They failed to arrive at an
amicable settlement. Thus, the process of arbitration continued and the parties
appointed the chairperson and members of the Arbitration Committee as outlined in
the CBA. Petitioner and respondent respectively appointed as members to the
Arbitration Committee Mr. Raul A. Kapuno, Jr. and Mr. Luis Ruiz while they both
chose Atty. Alice Morada as chairperson thereof. They then executed a Submission
Agreement which was accepted by the Arbitration Committee on 01 October 2009. As
contained in the Submission Agreement, the sole issue for arbitration is whether the
removal of chairs of the operators assigned at the production/manufacturing line while
performing their duties and responsibilities is valid or not.
Both parties submitted their position papers and other subsequent pleadings
in amplification of their respective stands. Petitioner argued that the removal of the
chairs is valid as it is a legitimate exercise of management prerogative, it does not
violate the Labor Code and it does not violate the CBA it contracted with respondent.
On the other hand, respondent espoused the contrary view. It contended that the
bottling operators have been performing their assigned duties satisfactorily with the
presence of the chairs; the removal of the chairs constitutes a violation of the
Occupational Health and Safety Standards, the policy of the State to assure the right
of workers to just and humane conditions of work as stated in Article 3 of the Labor
Code and the Global Workplace Rights Policy.
On June 11, 2010, the Arbitration Committee rendered a decision in favor of
the Royal Plant Workers Union (the Union) and against CCBPI, the dispositive portion
of which reads, as follows: Wherefore, the undersigned rules in favor of ROPWU
declaring that the removal of the operators’ chairs is not valid. CCBPI is hereby
ordered to restore the same for the use of the operators as before their removal in 2008.
The Arbitration Committee ruled, among others, that the use of chairs by the
operators had been a company practice for 34 years in Bottling Line 2, from 1974 to
2008, and 20 years in Bottling Line 1, from 1988 to 2008; that the use of the chairs by
the operators constituted a company practice favorable to the Union; that it ripened
into a benefit after it had been enjoyed by it; that any benefit being enjoyed by the
employees could not be reduced, diminished, discontinued, or eliminated by the
employer in accordance with Article 100 of the Labor Code, which prohibited the
diminution or elimination by the employer of the employees’ benefit; and that
jurisprudence had not laid down any rule requiring a specific minimum number of
years before a benefit would constitute a voluntary company practice which could not
be unilaterally withdrawn by the employer.
The Arbitration Committee further stated that, although the removal of the
chairs was done in good faith, CCBPI failed to present evidence regarding instances
of sleeping while on duty. There were no specific details as to the number of incidents
of sleeping on duty, who were involved, when these incidents happened, and what
actions were taken. There was no evidence either of any accident or injury in the many
years that the bottling operators used chairs. To the Arbitration Committee, it was
puzzling why it took 34 and 20 years for CCBPI to be so solicitous of the bottling
operators’ safety that it removed their chairs so that they would not fall asleep and
injure themselves. Finally, the Arbitration Committee was of the view that, contrary
to CCBPI’s position, line efficiency was the result of many factors and it could not be
attributed solely to one such as the removal of the chairs. Not contented with the
Arbitration Committee’s decision, CCBPI filed a petition for review under Rule 43
before the CA.
On May 24, 2011, the CA rendered a contrasting decision which nullified and
set aside the decision of the Arbitration Committee, sustaining the removal of the
chairs of the bottling operators from the manufacturing/production line.
The CA held that the removal of the chairs from the
manufacturing/production lines by CCBPI is within the province of management
prerogatives; that it was part of its inherent right to control and manage its enterprise
effectively; and that since it was the employer’s discretion to constantly develop
measures or means to optimize the efficiency of its employees and to keep its
machineries and equipment in the best of conditions, it was only appropriate that it
should be given wide latitude in exercising it.
The CA stated that CCBPI complied with the conditions of a valid exercise
of a management prerogative when it decided to remove the chairs used by the bottling
operators in the manufacturing/production lines. The removal of the chairs was solely
motivated by the best intentions for both the Union and CCBPI, in line with the “I
Operate, I Maintain, I Clean” program for bottling operators, wherein every bottling
operator was given the responsibility to keep the machinery and equipment assigned
to him clean and safe. The program would reinforce the task of bottling operators to
constantly move about in the performance of their duties and responsibilities. Without
the chairs, the bottling operators could efficiently supervise these machineries’
operations and maintenance.
It would also be beneficial for them because the working time before the
break in each rotation for each shift was substantially reduced from two and a half
hours (2 ½) to one and a half hours (1 ½) before the 30-minute break. This scheme
was clearly advantageous to the bottling operators as the number of resting periods
was increased. CCBPI had the best intentions in removing the chairs because some
bottling operators had the propensity to fall asleep while on the job and sleeping on
the job ran the risk of injury exposure and removing them reduced the risk. The CA
added that the decision of CCBPI to remove the chairs was not done for the purpose
of defeating or circumventing the rights of its employees under the special laws, the
Collective Bargaining Agreement (CBA) or the general principles of justice and fair
play. It opined that the principles of justice and fair play were not violated because,
when the chairs were removed, there was a commensurate reduction of the working
time for each rotation in each shift.
The provision of chairs for the bottling operators was never part of the CBAs
contracted between the Union and CCBPI. The chairs were not provided as a benefit
because such matter was dependent upon the exigencies of the work of the bottling
operators. As such, CCBPI could withdraw this provision if it was not necessary in the
exigencies of the work, if it was not contributing to the efficiency of the bottling
operators or if it would expose them to some hazards.
Lastly, the CA explained that the provision of chairs to the bottling operators
cannot be covered by Article 100 of the LC on elimination or diminution of benefits
because the employee’s benefits referred to therein mainly involved monetary
considerations or privileges converted to their monetary equivalent.
Issue:
1. Whether Rule 43 of the Rules of Court was an improper remedy and should
have been dismissed.
2. Whether the removal of the bottling operators’ chairs from CCBPI’s
production lines is a valid exercise of management prerogative.
3. Whether the rights of the Union under any labor law, the CBA and under
general principles for justice and fair play are violated.
Held:
1. No. The Court has already ruled in a number of cases that a decision or award
of a voluntary arbitrator is appealable to the CA via a petition for review under Rule
43.
2. Yes. The management is free to regulate, according to its own discretion and
judgment, all aspects of employment, including hiring, work assignments, working
methods, time, place, and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay-off of
workers, and discipline, dismissal and recall of workers. The prerogative, however, is
not absolute; it must be exercised in good faith and with due regard to the rights of
labor.
In the case, CCBPI removed the operators’ chairs pursuant to a national
directive and in line with its “I Operate, I Maintain, I Clean” program, launched to
enable the Union to perform their duties and responsibilities more efficiently. The
chairs were not removed indiscriminately. They were carefully studied with due regard
to the welfare of the members of the Union.
The removal of the chairs was compensated by: a) a reduction of the operating
hours of the bottling operators from a two-and-one-half (2 ½)-hour rotation period to
a one-and-a half (1 ½) hour rotation period; and b) an increase of the break period from
15-30 minutes between rotations.
The decision to remove the chairs was to avoid instances of operators
sleeping on the job while in the performance of their duties and because of the fact
that the chairs were not necessary considering that the operators constantly move about
while working. It was designed to increase work efficiency. Lack of proof of any
operator sleeping on the job is of no moment.
3. No. There is no law that requires employers to provide chairs for bottling
operators. The CA correctly ruled that the Labor Code, specifically Article 132
thereof, only requires employers to provide seats for women. No similar requirement
is mandated for men or male workers. It must be stressed that all concerned bottling
operators in this case are men.
There was no violation either of the Health, Safety and Social Welfare Benefit
provisions under Book IV of the Labor Code of the Philippines. As shown in the
foregoing, the removal of the chairs was compensated by the reduction of the working
hours and increase in the rest period. The directive did not expose the bottling
operators to safety and health hazards.
As to the CBA, contains no provision whatsoever requiring the management
to provide chairs for the operators in the production/manufacturing line while
performing their duties and responsibilities. On the contrary, Sec. 2 of Art. 1 of the
CBA expressly provides as follows: x x x On the other hand, all such benefits and/or
privileges as are not expressly provided for in this Agreement but which are now being
accorded, may in the future be accorded, or might have previously been accorded, to
the employees and/or workers, shall be deemed as purely voluntary acts on the part of
the COMPANY in each case, and the continuance and repetition thereof now or in the
future, no matter how long or how often, shall not be construed as establishing an
obligation on the part of the COMPANY.
Since the matter of the chairs is not expressly stated in the CBA, it is
understood to be a purely voluntary act on the part of CCBPI and the did not convert
it into an obligation in favor of the Union.
As to the general principles of justice and fair play, there’s no violation at all
because the bottling operators’ working time was considerably reduced and the break
period, when they could sit down, was increased. The bottling operators’ new work
schedule is certainly advantageous to them because it greatly increases their rest period
and significantly decreases their working time.
And as to Art. 100 of the LC, the operators’ chairs cannot be considered as one of the
employee benefits covered. The term “benefits” mentioned in the non-diminution rule
refers to monetary benefits or privileges given to the employee with monetary
equivalents. Such benefits or privileges form part of the employees’ wage, salary or
compensation making them enforceable obligations.
FAR EAST AGRICULTURAL SUPPLY vs. LEBATIQUE
G.R. No. 162813 | February 12, 2007
Facts:
1. Petitioner Far East Agricultural Supply, Inc. (Far East) hired on March 4, 1996
private respondent Jimmy Lebatique as truck driver. He delivered animal feeds to
the company’s clients.
2. On January 24, 2000, Lebatique complained of nonpayment of overtime work
particularly on January 22, 2000, when he was required to make a second delivery
in Novaliches, Quezon City. That same day, Manuel Uy, brother of Far East’s
General Manager and petitioner Alexander Uy, suspended Lebatique apparently
for illegal use of company vehicle. Even so, Lebatique reported for work the next
day but he was prohibited from entering the company premises.
3. On January 26, 2000, Lebatique sought the assistance of the DOLE Public
Assistance and Complaints Unit concerning the nonpayment of his overtime
pay. According to Lebatique, two days later, he received a telegram from
petitioners requiring him to report for work. When he did the next day, January
29, 2000, Alexander asked him why he was claiming overtime pay. Lebatique
explained that he had never been paid for overtime work since he started
working for the company. He also told Alexander that Manuel had fired him.
After talking to Manuel, Alexander terminated Lebatique and told him to look for
another job.
4. On March 20, 2000, Lebatique filed a complaint for illegal dismissal and
nonpayment of overtime pay. The Labor Arbiter found that Lebatique was
illegally dismissed, and ordered his reinstatement and the payment of his full back
wages, 13th month pay, service incentive leave pay, and overtime pay.
5. NLRC reversed. CA reinstated LA ruling, holding that Lebatique was not a field
personnel and therefore entitled to overtime pay, service incentive leave pay and
13th month pay. Hence, this petition.
6. Petitioners contend, among others, that Lebatique was merely suspended; that
Lebatique is estopped from claiming that he was illegally dismissed since his
complaint before the DOLE was only on the nonpayment of his overtime pay.
Also, petitioners maintain that Lebatique, as a driver, is not entitled to overtime
pay since he is a field personnel whose time outside the company premises cannot
be determined with reasonable certainty. According to petitioners, the drivers do
not observe regular working hours unlike the other office employees. The drivers
may report early in the morning to make their deliveries or in the afternoon,
depending on the production of animal feeds and the traffic conditions. Petitioners
also aver that Lebatique worked for less than eight hours a day.
Issues:
1) Whether Lebatique was illegally dismissed.
2) Whether Lebatique was a field personnel not entitled to overtime pay.
Ratio Decidendi:
1) YES. It is well-settled that in cases of illegal dismissal, the burden is on the
employer to prove that the termination was for a valid cause. In this case,
petitioners failed to discharge such burden. Petitioners aver that Lebatique
was merely suspended for one day but he abandoned his work thereafter. To
constitute abandonment as a just cause for dismissal, there must be: (a)
absence without justifiable reason; and (b) a clear intention, as manifested by
some overt act, to sever the employer-employee relationship.
The records show that petitioners failed to prove that Lebatique abandoned
his job. Nor was there a showing of a clear intention on the part of Lebatique
to sever the employer-employee relationship. When Lebatique was verbally
told by Alexander Uy, the company’s General Manager, to look for another
job, Lebatique was in effect dismissed. Even assuming earlier he was merely
suspended for illegal use of company vehicle, the records do not show that
he was afforded the opportunity to explain his side.
It is clear also from the sequence of the events leading to Lebatique’s
dismissal that it was Lebatique’s complaint for nonpayment of his overtime
pay that provoked the management to dismiss him, on the erroneous premise
that a truck driver is a field personnel not entitled to overtime pay. An
employee who takes steps to protest his layoff cannot by any stretch of
imagination be said to have abandoned his work and the filing of the
 complaint is proof enough of his desire to return to work, thus negating any
suggestion of abandonment.
2) NO. Under Article 82 of the Labor code, the provisions on Working
Conditions and Rest Periods shall not apply to field personnel. The definition
of a “field personnel” is not merely concerned with the location where the
employee regularly performs his duties but also with the fact that the
employee’s performance is unsupervised by the employer.
Field personnel are those who regularly perform their duties away from the
principal place of business of the employer and whose actual hours of work
in the field cannot be determined with reasonable certainty. Thus, in order to
determine whether an employee is a field employee, it is also necessary to
ascertain if actual hours of work in the field can be determined with
reasonable certainty by the employer. In so doing, an inquiry must be made
as to whether or not the employee’s time and performance are constantly
supervised by the employer.
As correctly found by the CA, Lebatique is not a field personnel for the
following reasons: (1) company drivers, including Lebatique, are directed to
deliver the goods at a specified time and place; (2) they are not given the
discretion to solicit, select and contact prospective clients; and (3) Far East
issued a directive that company drivers should stay at the client’s premises
during truck-ban hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.
Even petitioners admit that the drivers can report early in the morning, to
make their deliveries, or in the afternoon, depending on the production of
animal feeds. Drivers, like Lebatique, are under the control and supervision
of management officers. Lebatique, therefore, is a regular employee whose
tasks are usually necessary and desirable to the usual trade and business of
the company. Thus, he is entitled to the benefits accorded to regular
employees of Far East, including overtime pay and service incentive leave
pay.
[Mukhang importante din ito] Note that all money claims arising from an
employer-employee relationship shall be filed within three years from the
time the cause of action accrued; otherwise, they shall be forever barred.
Further, if it is established that the benefits being claimed have been withheld
from the employee for a period longer than three years, the amount pertaining
to the period beyond the three-year prescriptive period is therefore barred by
prescription. The amount that can only be demanded by the aggrieved
employee shall be limited to the amount of the benefits withheld within three
years before the filing of the complaint.
Lebatique timely filed his claim for service incentive leave pay, considering
that in this situation, the prescriptive period commences at the time he was
terminated. On the other hand, his claim regarding nonpayment of overtime
pay since he was hired in March 1996 is a different matter. In the case of
overtime pay, he can only demand for the overtime pay withheld for the
period within three years preceding the filing of the complaint on March 20,
2000. However, we find insufficient the selected time records presented by
petitioners to compute properly his overtime pay. The Labor Arbiter should
have required petitioners to present the daily time records, payroll, or other
documents in management’s control to determine the correct overtime pay
due Lebatique.
Jose Rizal College v. NLRC G.R. No. L-65482, 1 December 1987
Facts:
Petitioner is a non-stock, non-profit educational institution duly organized
and existing under the laws of the Philippines. It has three groups of employees
categorized as follows: (a) personnel on monthly basis, who receive their monthly
salary uniformly throughout the year, irrespective of the actual number of working
days in a month without deduction for holidays; (b) personnel on daily basis who are
paid on actual days worked and they receive unworked holiday pay and (c) collegiate
faculty who are paid on the basis of student contract hour.
Before the start of the semester they sign contracts with the college
undertaking to meet their classes as per schedule. Unable to receive their
corresponding holiday pay, as claimed, from 1975 to 1977, private respondent
National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty
and personnel of Jose Rizal College filed with the Ministry of Labor a complaint
against the college for said alleged non-payment of holiday pay, docketed as Case No.
RO4-10-81-72. Due to the failure of the parties to settle their differences on
conciliation, the case was certified for compulsory arbitration where it was docketed
as RB-IV- 23037-78.
After the parties had submitted their respective position papers, the Labor
Arbiter rendered a decision on February 5, 1979, the dispositive portion of which
reads: "WHEREFORE, judgment is hereby rendered as follows: The faculty and
personnel of the respondent Jose Rizal College who are paid their salary by the month
uniformly in a school year, irrespective of the number of working days in a month,
without deduction for holidays, are presumed to be already paid the 10 paid legal
holidays and are no longer entitled to separate payment for the said regular holidays;
The personnel of the respondent Jose Rizal College who are paid their wages daily are
entitled to be paid the 10 unworked regular holidays according to the pertinent
provisions of the Rules and Regulations Implementing the Labor Code; Collegiate
faculty of the respondent Jose Rizal College who by contract are paid compensation
per student contract hour are not entitled to unworked regular holiday pay considering
that these regular holidays have been excluded in the programming of the student
contact hours.''
On appeal, respondent National Labor Relations Commission in a decision
promulgated on June 2, 1982, modified the decision appealed from, in the sense that
teaching personnel paid by the hour are declared to be entitled to holiday pay. Hence,
this petition.
Issue:
1. Whether the school faculty who according to their contracts are paid per
lecture hour are entitled to unworked holiday pay.
2. Whether the petitioners were deprived of due process.
Held:
1. No. Subject holiday pay is provided for in the Labor Code, which reads:
"Art. 94. Right to holiday pay—(a) Every worker shall be paid his regular
daily wage during regular holidays, except in retail and service establishments
regularly employing less than ten (10) workers; The employer may require an
employee to work on any holiday but such employee shall be paid a compensation
equivalent to twice his regular rate; x x" and in the Implementing Rules and
Regulations, Rule IV, Book III, which reads:
"SEC. 8. Holiday pay of certain employees. — (a) Private school teachers,
including faculty members of colleges and universities, may not be paid for the regular
holidays during semestral vacations. They shall, however, be paid for the regular
holidays during Christmas vacations. x x"
Under the foregoing provisions, apparently, the petitioner, although a non-
profit institution is under obligation to give pay even on unworked regular holidays to
hourly paid faculty members subject to the terms and conditions provided for therein.
The Court believes that the aforementioned implementing rule is not justified
by the provisions of the law which after all is silent with respect to faculty members
paid by the hour who because of their teaching contracts are obliged to work and
consent to be paid only for work actually done (except when an emergency or a
fortuitous event or a national need calls for the declaration of special holidays).
Regular holidays specified as such by law are known to both school and faculty
members as "no class days;" certainly the latter do not expect payment for said
unworked days, and this was clearly in their minds when they entered into the teaching
contracts.
On the other hand, both the law and the Implementing Rules governing
holiday pay are silent as to payment on Special Public Holidays. It is readily apparent
that the declared purpose of the holiday pay which is the prevention of diminution of
the monthly income of the employees on account of work interruptions is defeated
when a regular class day is cancelled on account of a special public holiday and class
hours are held on another working day to make up for time lost in the school calendar.
Otherwise stated, the faculty member, although forced to take a rest, does not earn
what he should earn on that day.
When a special public holiday is declared, the faculty member paid by the
hour is deprived of expected income, and it does not matter that the school calendar is
extended in view of the days or hours lost, for their income that could be earned from
other sources is lost during the extended days. Similarly, when classes are called off
or shortened on account of typhoons, floods, rallies, and the like, these faculty
members must likewise be paid, whether or not extensions are ordered.
2. No. the "cardinal primary" requirements of due process in
administrative proceedings, to wit: "(1) the right to a hearing which includes the right
to present one's case and submit evidence in support thereof; (2) the tribunal must
consider the evidence presented; (3) the decision must have something to support
itself; (4) the evidence must be substantial, and substantial evidence means such
evidence as a reasonable mind might accept as adequate to support a conclusion; (5)
the decision must be based on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected; (6) the tribunal or body
of any of its judges must act on its or his own independent consideration of the law
and facts of the controversy, and not simply accept the views of a subordinate; (7) the
board or body should in all controversial questions, render its decisions in such manner
that the parties to the proceeding can know the various issues involved, and the reason
for the decision rendered."
The records show petitioner JRC was amply heard and represented in the
instant proceedings. It submitted its position paper before the Labor Arbiter and the
NLRC and even filed a motion for reconsideration of the decision of the latter, as well
as an "Urgent Motion for Hearing En Banc" Thus, petitioner's claim of lack of due
process is unfounded.
MAKATI HABERDASHERY, INC., vs. NATIONAL LABOR RELATIONS
COMMISSION
Facts:
Individual complainants, private respondents herein, have been working for
petitioner Makati Haberdashery, Inc. as tailors, seamstress, sewers, basters
(manlililip) and "plantsadoras". They are paid on a piece-rate basis except Maria
Angeles and Leonila Serafina who are paid on a monthly basis. In addition to their
piece-rate, they are given a daily allowance of three (P 3.00) pesos provided they
report for work before 9:30 a.m. everyday.
Private respondents are required to work from or before 9:30 a.m. up to 6:00 or 7:00
p.m. from Monday to Saturday and during peak periods even on Sundays and
holidays.
On July 20, 1984, the Sandigan ng Manggagawang Pilipino, a labor organization of
the respondent workers, filed a complaint docketed as NLRC NCR Case No. 7-2603-
84 for (a) underpayment of the basic wage; (b) underpayment of living allowance;
(c) non-payment of overtime work; (d) non-payment of holiday pay; (e) non-
payment of service incentive pay; (f) 13th month pay; and (g) benefits provided for
under Wage Orders Nos. 1, 2, 3, 4 and 5.
During the pendency of NLRC NCR Case No. 7-2603-84, private respondent
Dioscoro Pelobello left with Salvador Rivera, a salesman of petitioner Haberdashery,
an open package which was discovered to contain a "jusi" barong tagalog. When
confronted, Pelobello replied that the same was ordered by respondent Casimiro
Zapata for his customer. Zapata allegedly admitted that he copied the design of
petitioner Haberdashery. But in the afternoon, when again questioned about said
barong, Pelobello and Zapata denied ownership of the same. Consequently a
memorandum was issued to each of them to explain on or before February 4, 1985
why no action should be taken against them for accepting a job order which is
prejudicial and in direct competition with the business of the company. Both
respondents allegedly did not submit their explanation and did not report for work.
Hence, they were dismissed by petitioners on February 4, 1985. They countered by
filing a complaint for illegal dismissal docketed as NLRC NCR Case No. 2-428-85
on February 5, 1985.
Judgment is hereby rendered in NLRC NCR Case No. 2-428-85 finding respondents
guilty of illegal dismissal and ordering them to reinstate Dioscoro Pelobello and
Casimiro Zapata to their respective or similar positions without loss of seniority
rights, with full backwages from July 4, 1985 up to actual reinstatement. The charge
of unfair labor practice is dismissed for lack of merit. The complainants' claims for
underpayment re violation of the minimum wage law is hereby ordered dismissed for
lack of merit. Respondents are hereby found to have violated the decrees on the cost
of living allowance, service incentive leave pay and the 13th Month Pay. In view
thereof, the economic analyst of the Commission is directed to compute the
monetary awards due each complainant based on the available records of the
respondents retroactive as of three years prior to the filing of the instant case.
Issues:
I W/N AN EMPLOYER-EMPLOYEE RELATIONSHIP EXISTS BETWEEN
PETITIONER HABERDASHERY AND RESPONDENTS WORKERS.
II W/N RESPONDENTS WORKERS ARE ENTITLED TO MONETARY CLAIMS
DESPITE THE FINDING THAT THEY ARE NOT ENTITLED TO MINIMUM
WAGE.
III W/N RESPONDENTS PELOBELLO AND ZAPATA WERE ILLEGALLY
DISMISSED.
Ruling:
Yes. The first issue which is the pivotal issue in this case is resolved in favor of
private respondents. We have repeatedly held in countless decisions that the test of
employer-employee relationship is four-fold: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to
control the employee's conduct. It is the so called "control test" that is the most
important element. This simply means the determination of whether the employer
controls or has reserved the right to control the employee not only as to the result of
the work but also as to the means and method by which the same is to be
accomplished.
The facts at bar indubitably reveal that the most important requisite of control is
present. As gleaned from the operations of petitioner, when a customer enters into a
contract with the haberdashery or its proprietor, the latter directs an employee who
may be a tailor, pattern maker, sewer or "plantsadora" to take the customer's
measurements, and to sew the pants, coat or shirt as specified by the customer.
Supervision is actively manifested in all these aspects — the manner and quality of
cutting, sewing and ironing.
Furthermore, the presence of control is immediately evident in this memorandum
issued by Assistant Manager Cecilio B. Inocencio, Jr. dated May 30, 1981 addressed
to Topper's Makati Tailors.
From this memorandum alone, it is evident that petitioner has reserved the right to
control its employees not only as to the result but also the means and methods by
which the same are to be accomplished. That private respondents are regular
employees is further proven by the fact that they have to report for work regularly
from 9:30 a.m. to 6:00 or 7:00 p.m. and are paid an additional allowance of P 3.00
daily if they report for work before 9:30 a.m. and which is forfeited when they arrive
at or after 9:30 a.m.
Yes. There is no dispute that private respondents are entitled to the Minimum Wage
as mandated in Section 3(f), Rules Implementing Presidential Decree 1713 which
explicitly states that, "All employees paid by the result shall receive not less than the
applicable new minimum wage rates for eight (8) hours work a day, except where a
payment by result rate has been established by the Secretary of Labor. ..." No such
rate has been established in this case.
But all these notwithstanding, the question as to whether or not there is in fact an
underpayment of minimum wages to private respondents has already been resolved
in the decision of the Labor Arbiter where he stated: "Hence, for lack of sufficient
evidence to support the claims of the complainants for alleged violation of the
minimum wage, their claims for underpayment re violation of the Minimum Wage
Law under Wage Orders Nos. 1, 2, 3, 4, and 5 must perforce fall."
The records show that private respondents did not appeal the above ruling of the
Labor Arbiter to the NLRC; neither did they file any petition raising that issue in the
Supreme Court. Accordingly, insofar as this case is concerned, that issue has been
laid to rest. As to private respondents, the judgment may be said to have attained
finality. For it is a well-settled rule in this jurisdiction that "an appellee who has not
himself appealed cannot obtain from the appellate court-, any affirmative relief other
than the ones granted in the decision of the court below. "
As a consequence of their status as regular employees of the petitioners, they can
claim cost of living allowance. This is apparent from the provision defining the
employees entitled to said allowance, thus: "... All workers in the private sector,
regardless of their position, designation or status, and irrespective of the method by
which their wages are paid. "
Private respondents are also entitled to claim their 13th Month Pay under Section
3(e) of the Rules and Regulations Implementing P.D. No. 851 which provides:
Section 3. Employers covered. — The Decree shall apply to all employers except to:
(e) Employers of those who are paid on purely commission, boundary, or task basis,
and those who are paid a fixed amount for performing a specific work, irrespective
of the time consumed in the performance thereof, except where the workers are paid
on piece-rate basis in which case the employer shall be covered by this issuance
insofar as such workers are concerned.
On the other hand, while private respondents are entitled to Minimum Wage, COLA
and 13th Month Pay, they are not entitled to service incentive leave pay because as
piece-rate workers being paid at a fixed amount for performing work irrespective of
time consumed in the performance thereof, they fall under one of the exceptions
stated in Section 1(d), Rule V, Implementing Regulations, Book III, Labor Code. For
the same reason private respondents cannot also claim holiday pay (Section 1(e),
Rule IV, Implementing Regulations, Book III, Labor Code).
No, it is apparent that public respondents have misread the evidence, for it does show
that a violation of the employer's rules has been committed and the evidence of such
transgression, the copied barong tagalog, was in the possession of Pelobello who
pointed to Zapata as the owner. When required by their employer to explain in a
memorandum issued to each of them, they not only failed to do so but instead went
on AWOL (absence without official leave), waited for the period to explain to expire
and for petitioner to dismiss them. They thereafter filed an action for illegal
dismissal on the far-fetched ground that they were dismissed because of union
activities. Assuming that such acts do not constitute abandonment of their jobs as
insisted by private respondents, their blatant disregard of their employer's
memorandum is undoubtedly an open defiance to the lawful orders of the latter, a
justifiable ground for termination of employment by the employer expressly
provided for in Article 283(a) of the Labor Code as well as a clear indication of guilt
for the commission of acts inimical to the interests of the employer, another
justifiable ground for dismissal under the same Article of the Labor Code, paragraph
(c). Well established in our jurisprudence is the right of an employer to dismiss an
employee whose continuance in the service is inimical to the employer's interest.
In fact the Labor Arbiter himself to whom the explanation of private respondents was
submitted gave no credence to their version and found their excuses that said barong
tagalog was the one they got from the embroiderer for the Assistant Manager who
was investigating them, unbelievable.Under the circumstances, it is evident that there
is no illegal dismissal of said employees. Thus, We have ruled that:
No employer may rationally be expected to continue in employment a person whose
lack of morals, respect and loyalty to his employer, regard for his employer's rules,
and appreciation of the dignity and responsibility of his office, has so plainly and
completely been bared.
The law is protecting the rights of the laborer authorizes neither oppression nor self-
destruction of the employer. 17 More importantly, while the Constitution is
committed to the policy of social justice and the protection of the working class, it
should not be supposed that every labor dispute will automatically be decided in
favor of labor.
JPL Marketing v CA
Facts:
JPL Marketing and Promotions (hereinafter referred to as "JPL") is a domestic
corporation engaged in the business of recruitment and placement of workers. On the
other hand, private respondents Noel Gonzales, Ramon Abesa III and Faustino
Aninipot were employed by JPL as merchandisers on separate dates and assigned at
different establishments in Naga City and Daet, Camarines Norte as attendants to the
display of California Marketing Corporation (CMC), one of petitioner’s clients.
On 13 August 1996, JPL notified private respondents that CMC would stop its direct
merchandising activity in the Bicol Region, Isabela, and Cagayan Valley effective 15
August 1996.3 They were advised to wait for further notice as they would be
transferred to other clients. However, on 17 October 1996,4 private respondents
Abesa and Gonzales filed before the National Labor Relations Commission Regional
Arbitration Branch (NLRC) Sub V complaints for illegal dismissal, praying for
separation pay, 13th month pay, service incentive leave pay and payment for moral
damages. Aninipot filed a similar case thereafter.
The Labor Arbiter found that Gonzales and Abesa applied with and were employed
by the store where they were originally assigned by JPL even before the lapse of the
six (6)-month period given by law to JPL to provide private respondents a new
assignment. Thus, they may be considered to have unilaterally severed their relation
with JPL, and cannot charge JPL with illegal dismissal.7 The Labor Arbiter held that
it was incumbent upon private respondents to wait until they were reassigned by JPL,
and if after six months they were not reassigned, they can file an action for
separation pay but not for illegal dismissal.8 The claims for 13th month pay and
service incentive leave pay was also denied since private respondents were paid way
above the applicable minimum wage during their employment.
Private respondents appealed to the NLRC. In its Resolution,10 the Second Division
of the NLRC agreed with the Labor Arbiter’s finding that when private respondents
filed their complaints, the six-month period had not yet expired, and that CMC’s
decision to stop its operations in the areas was beyond the control of JPL, thus, they
were not illegally dismissed. However, it found that despite JPL’s effort to look for
clients to which private respondents may be reassigned it was unable to do so, and
hence they are entitled to separation pay.
The Court of Appeals dismissed the petition and affirmed in toto the NLRC
resolution. While conceding that there was no illegal dismissal, it justified the award
of separation pay on the grounds of equity and social justice.
Issue: w/n separation pay be awarded?
W/n they are entitled for the 13th month pay?
Held:
1. No. Under Arts. 283 and 284 of the Labor Code, separation pay is authorized only
in cases of dismissals due to any of these reasons: (a) installation of labor saving
devices; (b) redundancy; (c) retrenchment; (d) cessation of the employer's business;
and (e) when the employee is suffering from a disease and his continued employment
is prohibited by law or is prejudicial to his health and to the health of his co-
employees. However, separation pay shall be allowed as a measure of social justice
in those cases where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character, but only when he was illegally
dismissed.32 In addition, Sec. 4(b), Rule I, Book VI of the Implementing Rules to
Implement the Labor Code provides for the payment of separation pay to an
employee entitled to reinstatement but the establishment where he is to be reinstated
has closed or has ceased operations or his present position no longer exists at the
time of reinstatement for reasons not attributable to the employer.
The common denominator of the instances where payment of separation pay is
warranted is that the employee was dismissed by the employer.33 In the instant case,
there was no dismissal to speak of. Private respondents were simply not dismissed at
all, whether legally or illegally. What they received from JPL was not a notice of
termination of employment, but a memo informing them of the termination of
CMC’s contract with JPL. More importantly, they were advised that they were to be
reassigned. At that time, there was no severance of employment to speak of.
Furthermore, Art. 286 of the Labor Code allows the bona fide suspension of the
operation of a business or undertaking for a period not exceeding six (6) months,
wherein an employee/employees are placed on the so-called "floating status." When
that "floating status" of an employee lasts for more than six months, he may be
considered to have been illegally dismissed from the service. Thus, he is entitled to
the corresponding benefits for his separation, and this would apply to suspension
either of the entire business or of a specific component thereof.34
As clearly borne out by the records of this case, private respondents sought
employment from other establishments even before the expiration of the six (6)-
month period provided by law. As they admitted in their comment, all three of them
applied for and were employed by another establishment after they received the
notice from JPL.35 JPL did not terminate their employment; they themselves severed
their relations with JPL. Thus, they are not entitled to separation pay.
The Court is not inclined in this case to award separation pay even on the ground of
compassionate justice. The Court of Appeals relied on the cases36 wherein the Court
awarded separation pay to legally dismissed employees on the grounds of equity and
social consideration. Said cases involved employees who were actually dismissed by
their employers, whether for cause or not. Clearly, the principle applies only when
the employee is dismissed by the employer, which is not the case in this instance. In
seeking and obtaining employment elsewhere, private respondents effectively
terminated their employment with JPL.
2. Yes. JPL cannot escape the payment of 13th month pay and service incentive
leave pay to private respondents. Said benefits are mandated by law and should be
given to employees as a matter of right.
Presidential Decree No. 851, as amended, requires an employer to pay its rank and
file employees a 13th month pay not later than 24 December of every year. However,
employers not paying their employees a 13th month pay or its equivalent are not
covered by said law.39 The term "its equivalent" was defined by the law’s
implementing guidelines as including Christmas bonus, mid-year bonus, cash
bonuses and other payment amounting to not less than 1/12 of the basic salary but
shall not include cash and stock dividends, cost-of-living-allowances and all other
allowances regularly enjoyed by the employee, as well as non-monetary benefits.40
On the other hand, service incentive leave, as provided in Art. 95 of the Labor Code,
is a yearly leave benefit of five (5) days with pay, enjoyed by an employee who has
rendered at least one year of service. Unless specifically excepted, all establishments
are required to grant service incentive leave to their employees. The term "at least
one year of service" shall mean service within twelve (12) months, whether
continuous or broken reckoned from the date the employee started working.41 The
Court has held in several instances that "service incentive leave is clearly
demandable after one year of service."
Admittedly, private respondents were not given their 13th month pay and service
incentive leave pay while they were under the employ of JPL. Instead, JPL provided
salaries which were over and above the minimum wage. The Court rules that the
difference between the minimum wage and the actual salary received by private
respondents cannot be deemed as their 13th month pay and service incentive leave
pay as such difference is not equivalent to or of the same import as the said benefits
contemplated by law. Thus, as properly held by the Court of Appeals and by the
NLRC, private respondents are entitled to the 13th month pay and service incentive
leave pay.
However, the Court disagrees with the Court of Appeals’ ruling that the 13th month
pay and service incentive leave pay should be computed from the start of
employment up to the finality of the NLRC resolution. While computation for the
13th month pay should properly begin from the first day of employment, the service
incentive leave pay should start a year after commencement of service, for it is only
then that the employee is entitled to said benefit. On the other hand, the computation
for both benefits should only be up to 15 August 1996, or the last day that private
respondents worked for JPL. To extend the period to the date of finality of the NLRC
resolution would negate the absence of illegal dismissal, or to be more precise, the
want of dismissal in this case. Besides, it would be unfair to require JPL to pay
private respondents the said benefits beyond 15 August 1996 when they did not
render any service to JPL beyond that date. These benefits are given by law on the
basis of the service actually rendered by the employee, and in the particular case of
the service incentive leave, is granted as a motivation for the employee to stay longer
with the employer. There is no cause for granting said incentive to one who has
already terminated his relationship with the employer.
The law in protecting the rights of the employees authorizes neither oppression nor
self-destruction of the employer. It should be made clear that when the law tilts the
scale of justice in favor of labor, it is but recognition of the inherent economic
inequality between labor and management. The intent is to balance the scale of
justice; to put the two parties on relatively equal positions. There may be cases where
the circumstances warrant favoring labor over the interests of management but never
should the scale be so tilted if the result is an injustice to the employer. Justitia
nemini neganda est (Justice is to be denied to none).
Rodriguez vs. Park N Ride, Inc. | GR No. 222980
Facts:
On October 7, 2009, Rodriguez filed a Complaint for constructive illegal
dismissal, non-payment of service incentive leave pay and 13th month pay, including
claims for moral and exemplary damages and attorney's fees against Park N Ride,
Vicest Phils., Grand Leisure, and the Javier Spouses.
In her Position Paper, Rodriguez alleged that she was employed on January
30, 1984 as Restaurant Supervisor at Vicest Phils. Four (4) years later, the restaurant
business closed. Rodriguez was transferred to office work and became an
Administrative and Finance Assistant to Estelita Javier. One of Rodriguez's duties was
to open the office in Makati City at 8:00 a.m. daily.
The Javier Spouses established other companies. Rodriguez was also required
to handle the personnel and administrative matters of these companies without
additional compensation. She likewise took care of the household concerns of the
Javier Spouses, such as preparing payrolls of drivers and helpers, shopping for
household needs, and looking after the spouses' house whenever they travelled abroad.
Sometime in 2000, the Javier Spouses established Park N Ride, a business
that provided terminal parking and leasing. Although the company's main business
was in Lawton, Manila, its personnel and administrative department remained in
Makati City. Rodriguez handled the administrative, finance, and warehousing
departments of Park N Ride. Every Saturday, after opening the Makati office at 8:00
a.m., Rodriguez was required to report at the Lawton office at 11:00 a.m. to substitute
the Head Cashier, who would be on day-off.
She allegedly worked from 8:00 a.m. to 7:00 p.m., Mondays to Saturdays;
was on call on Sundays; and worked during Christmas and other holidays. She was
deducted an equivalent of two (2) days' wage for every day of absence and was not
paid any service incentive leave pay. On one occasion, Rodriguez asked the Javier
Spouses if she could go home by 10:00 a.m. to attend a family reunion, but her request
was denied.
The Javier Spouses' treatment of Rodriguez became unbearable; thus, on
March 25, 2009, she filed her resignation letter effective April 25, 2009. The Javier
Spouses allegedly did not accept her resignation and convinced her to reconsider and
stay on. However, her experience became worse. Rodriguez claimed that toward the
end of her employment, Estelita was always unreasonable and hot-headed, and would
belittle and embarrass her in the presence of co-workers.
On September 22, 2009, Rodriguez went on her usual "pamalengke" for the
Spouses. Later, she proceeded to open the Makati office. Estelita was mad at her when
they finally talked over the phone, berating her for opening the office late. She
allegedly told her that if she did not want to continue with her work, the company
could manage without her.
Thus, Rodriguez did not report for work the next day, and on September 26,
2009, she wrote the Javier Spouses a letter expressing her gripes at them. She intimated
that they were always finding fault with her to push her to resign. On October 6, 2009,
the Javier Spouses replied to her letter, allegedly accepting her resignation.
Rodriguez prayed for separation pay in lieu of reinstatement; full back wages; service
incentive leave pay; proportional 13th month pay; moral damages of P100,000.00;
exemplary damages of P100,000.00; and attorney's fees.
In their Position Paper, Javier Spouses stated that in 1984, they hired
Rodriguez as a nutritionist in their fast food business. Vicest (Phils) Inc., the spouses'
construction business, hired Rodriguez as an employee when the fast food business
closed. When the construction business became slow, Park N Ride hired Rodriguez as
Administrative Officer.
Javier Spouses trusted Rodriguez with both their businesses and personal
affairs, and this made her more senior than any of her colleagues at work. She was
given authority to transact with business and banking institutions and became a
signatory to their bank accounts. She was also given custody over the deeds and titles
of ownership over properties of the Javier Spouses.
However, Rodriguez was allegedly emotionally sensitive and prone to
occasional "tampo" when she would be reprimanded or cited for tasks
unaccomplished. She would then be absent after such reprimands and would
eventually return after a few days.
On September 22, 2009, the Javier Spouses inquired from Rodriguez about
an overdue contract with a vendor. Rodriguez offered no explanation for the delay,
and other employees heard her say that she was going to resign.
 On September 23, 2009, Rodriguez did not report for work. On September
26, 2009, when she still has not reported for work after three days, a letter was sent to
her citing her continued and unauthorized absence. "She was told that her resignation
could not be processed because she had not completed her employment clearance and
she was unable to properly turnover her tasks to her assistant." She was asked to report
on September 30, 2009 or, at the very least, to reply in writing on or before October 7,
2009.Rodriguez neither reported for work on September 30, 2009 nor submitted any
reply to the letter sent to her.
Rodriguez allegedly continued to ignore the requests for her to complete the
turnover of her tasks and responsibilities and refused to cooperate in tracing the
documents in her custody. Corollary to this, it was discovered that the company check
books were missing; that Rodriguez had unliquidated cash advances of not less than
P500,000.00; and that two (2) checks were deposited in her personal account
amounting to P936,000.00.
The Javier Spouses claimed that Rodriguez was not entitled to service
incentive leave pay, moral and exemplary damages, attorney's fees and director's fee.
They averred that they were willing to pay Rodriguez the 13th month pay differentials,
as soon as Rodriguez completed her clearance.
On May 26, 2010, Labor Arbiter dismissed Rodriguez's Complaint for lack
of merit. According to the Decision, the summary of evidence pointed to the
voluntariness of Rodriguez's resignation rather than the existence of a hostile and
frustrating working environment. The Javier Spouses were ordered to pay Rodriguez
her proportionate 13th month pay for 2009.
Rodriguez appealed to the NLRC. The Commission granted Rodriguez's
appeal and modified Labor Arbiter’s Decision. The Commission ruled that Rodriguez
was illegally dismissed and awarded her back wages, separation pay, 13th month pay
differentials, moral and exemplary damages, and attorney's fees.
However, on the Javier Spouses' Motion for Reconsideration, the
Commission set aside its May 30, 2011 Decision and reinstated Labor Arbiter’s
Decision.
Rodriguez filed a Motion for Reconsideration, which was denied by the
Commission. Rodriguez filed a Rule 65 Petition before the CA imputing grave abuse
of discretion on the NLRC.
The CA held that there was no constructive dismissal, but rather Rodriguez
voluntarily resigned from her employment. Rodriguez sought reconsideration. The CA
denied the motion. Hence, this Petition.
Issue: WON petitioner was constructively dismissed.
Held:
No. There is constructive dismissal when an employer’s act of clear
discrimination, insensibility or disdain becomes so unbearable on the part of the
employee so as to foreclose any choice on his part except to resign from such
employment. It exists where there is involuntary resignation because of the harsh,
hostile and unfavorable conditions set by the employer. We have held that the standard
for constructive dismissal is “whether a reasonable person in the employee’s position
would have felt compelled to give up his employment under the circumstances.” The
unreasonably harsh conditions that compel resignation on the part of an employee must
be way beyond the occasional discomforts brought about by the misunderstandings
between the employer and employee. Strong words may sometimes be exchanged as
the employer describes her expectations or as the employee narrates the conditions of
her work environment and the obstacles she encounters as she accomplishes her
assigned tasks. As in every human relationship, there are bound to be disagreements.
However, when these strong words from the employer happen without
palpable reason or are expressed only for the purpose of degrading the dignity of the
employee, then a hostile work environment will be created. In a sense, the doctrine of
constructive dismissal has been a consistent vehicle by this Court to assert the dignity
of labor. However, this is not the situation in this case.
The National Labor Relations Commission did not commit a grave abuse of
discretion in finding that petitioner was not constructively dismissed but that she
voluntarily resigned from employment. Petitioner’s unequivocal intent to relinquish
her position was manifest when she submitted her letters of resignation. The
resignation letters dated May 1, 2008 and March 25, 2009 contained words of
gratitude, which could hardly come from an employee forced to resign. These letters
were reinforced by petitioner’s very own act of not reporting for work despite
respondents’ directive.
From the representation of petitioner, what triggered her resignation was the
incident on September 22, 2009 when Estelita told her “Kung ayaw mo na ng
ginagawa mo, we can manage!” These words, however, are not sufficient to make the
continued employment of petitioner impossible, unreasonable, or unlikely.
The Court of Appeals correctly observed that the utterance of Estelita was
more a consequence of her spontaneous outburst of feelings resulting from petitioner’s
failure to perform a task that was long overdue, rather than an act to force petitioner
to resign from work. It appears that petitioner was asked to finish assigned tasks and
liquidate cash advances.
Petitioner was neither terminated on September 22, 2009 nor was she
constructively dismissed. There was no showing of bad faith or malicious design by
the respondents that would make her work conditions unbearable. On the other hand,
it is a fact that petitioner enjoyed the privilege of working closely with the Javier
Spouses and having their full trust and confidence. Spontaneous expressions of an
employer do not automatically render a hostile work atmosphere. The circumstances
in this case negate its presence.
Abduljuahid R. Pigcaulan v. Security | GR No. 173648
Facts:
Canoy and Pigcaulan were both employed by SCII as security guards and
were assigned to SCII's different clients. Subsequently, however, Canoy and
Pigcaulan filed with the Labor Arbiter separate complaints for underpayment of
salaries and non-payment of overtime, holiday, rest day, service incentive leave and
13th month pays. These complaints were later on consolidated as they involved the
same causes of action.
Canoy and Pigcaulan, in support of their claim, submitted their respective
daily time records reflecting the number of hours served and their wages for the
same. They likewise presented itemized lists of their claims for the corresponding
periods served.
Respondents, however, maintained that Canoy and Pigcaulan were paid their
just salaries and other benefits under the law; that the salaries they received were above
the statutory minimum wage and the rates provided by the Philippine Association of
Detective and Protective Agency Operators (PADPAO) for security guards; that their
holiday pay were already included in the computation of their monthly salaries; that
they were paid additional premium of 30% in addition to their basic salary whenever
they were required to work on Sundays and 200% of their salary for work done on
holidays; and, that Canoy and Pigcaulan were paid the corresponding 13th month pay
for the years 1998 and 1999. In support thereof, copies of payroll listings and lists of
employees who received their 13th month pay for the periods December 1997 to
November 1998 and December 1998 to November 1999 were presented. In addition,
respondents contended that Canoy's and Pigcaulan's monetary claims should only be
limited to the past three years of employment pursuant to the rule on prescription of
claims.
The Labor Arbiter held that the payroll listings presented by the respondents
did not prove that Canoy and Pigcaulan were duly paid as same were not signed by
the latter or by any SCII officer. The 13th month payroll was, however, acknowledged
as sufficient proof of payment, for it bears Canoy's and Pigcaulan's signatures. Thus,
without indicating any detailed computation of the judgment award, the Labor Arbiter
ordered the payment of overtime pay, holiday pay, service incentive leave pay and
proportionate 13th month pay for the year 2000 in favor of Canoy and Pigcaulan.
Respondents appealed to the NLRC, which sustained the LA’s decision and
dismissed the subsequent motion for reconsideration.
Respondents appealed to the CA which set aside the rulings of both the LA
and the NLRC after noting that there were no factual and legal bases mentioned in the
questioned rulings to support the conclusions made. Consequently, it dismissed all the
monetary claims of Canoy and Pigcaulan on the following rationale:
First. The Labor Arbiter disregarded the NLRC rule that, in cases involving
money awards and at all events, as far as practicable, the decision shall embody the
detailed and full amount awarded.
Second. The Labor Arbiter found that the payrolls submitted by SCII have no
probative value for being unsigned by Canoy, when, in fact, said payrolls, particularly
the payrolls from 1998 to 1999 indicate the individual signatures of Canoy.
Third. The Labor Arbiter did not state in his decision the substance of the
evidence adduced by Pigcaulan and Canoy as well as the laws or jurisprudence that
would show that the two are indeed entitled to the salary differential and incentive
leave pays.
Fourth. The Labor Arbiter held Reyes liable together with SCII for the
payment of the claimed salaries and benefits despite the absence of proof that Reyes
deliberately or maliciously designed to evade SCII's alleged financial obligation;
hence the Labor Arbiter ignored that SCII has a corporate personality separate and
distinct from Reyes. To justify solidary liability, there must be an allegation and
showing that the officers of the corporation deliberately or maliciously designed to
evade the financial obligation of the corporation.
Canoy and Pigcaulan filed a Motion for Reconsideration, but same was
denied by the CA. Hence, this petition.
Issue: WON the CA erred when it dismissed the complaint allegedly due to absence
of legal and factual bases despite attendance of substantial evidence in the records.
Held:
No. It is well to note that while the caption of the petition reflects both the
names of Canoy and Pigcaulan as petitioners, it appears from its body that it is being
filed solely by Pigcaulan. In fact, the Verification and Certification of Non-Forum
Shopping was executed by Pigcaulan alone. Thus, since it was only Pigcaulan who
filed the petition, the CA Decision has already become final and binding upon Canoy.
There was no substantial evidence to support the grant of overtime pay. The
Court find that both the Labor Arbiter and the NLRC erred in this regard. The
handwritten itemized computations are self-serving, unreliable and unsubstantial
evidence to sustain the grant of salary differentials, particularly overtime
pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth
of the handwritten entries stated therein. Written only in pieces of paper and solely
prepared by Canoy and Pigcaulan, these representative daily time records, as termed
by the Labor Arbiter, can hardly be considered as competent evidence to be used as
basis to prove that the two were underpaid of their salaries. We find nothing in the
records which could substantially support Pigcaulan's contention that he had rendered
service beyond eight hours to entitle him to overtime pay and during Sundays to entitle
him to restday pay. Hence, in the absence of any concrete proof that additional service
beyond the normal working hours and days had indeed been rendered, we cannot
affirm the grant of overtime pay to Pigcaulan.
Pigcaulan is entitled to holiday pay, service incentive leave pay and
proportionate 13th month pay for year 2000. As employer, SCII has the burden of
proving that it has paid these benefits to its employees.
SCII presented payroll listings and transmittal letters to the bank to show that
Canoy and Pigcaulan received their salaries as well as benefits which it claimed are
already integrated in the employees' monthly salaries. However, the documents
presented do not prove SCII's allegation. SCII failed to show any other concrete proof
by means of records, pertinent files or similar documents reflecting that the specific
claims have been paid. With respect to 13th month pay, SCII presented proof that this
benefit was paid but only for the years 1998 and 1999. To repeat, the burden of
proving payment of these monetary claims rests on SCII, being the employer. It is a
rule that one who pleads payment has the burden of proving it. "Even when the
plaintiff alleges non-payment, still the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove non-payment." Since
SCII failed to provide convincing proof that it has already settled the claims, Pigcaulan
should be paid his holiday pay, service incentive leave benefits and proportionate
13th month pay for the year 2000.
Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary
awards granted. Such failure, however, should not result in prejudice to the substantial
rights of the party. While we disallow the grant of overtime pay and rest day pay in
favor of Pigcaulan, he is nevertheless entitled, as a matter of right, to his holiday pay,
service incentive leave pay and 13th month pay for year 2000. Hence, the CA is not
correct in dismissing Pigcaulan's claims in its entirety. Consistent with the rule that all
money claims arising from an employer-employee relationship shall be filed within
three years from the time the cause of action accrued, Pigcaulan can only demand the
amounts due him for the period within three years preceding the filing of the complaint
in 2000. Furthermore, since the records are insufficient to use as bases to properly
compute Pigcaulan's claims, the case should be remanded to the Labor Arbiter for a
detailed computation of the monetary benefits due to him.
Labor Congress of Philippines For vs NLRC | GR No. 123938
Facts:
The 99 persons named as petitioners in this proceeding were rank-and-file
employees of respondent Empire Food Products, which hired them on various dates.
Petitioners filed against Empire and NLRC complaint for payment of money claims
and for violation of labor standards laws. Alongside this they also filed a petition for
direct certification for the Labor Congress to be their bargaining representative. On
Oct. 23, 1990, petitioners represented by LCP, and private respondents Gonzalo and
Evelyn Kehyeng (Kehyeng spouses) entered into a Memorandum of Agreement,
recognizing the following:
 Status of LCP as sole and exclusive Bargaining Agent and Representative
for all rank and file employees of the Empire Food Products regarding
"wages, hours of work, and other terms and conditions of employment";
 With regard to the NLRC complaint, all parties agree to resolve the issues
during the Collective Bargaining Agreement;
 Proper adjustment of wages, withdrawal of case from the Calendar of NLRC,
non-interference or any ULP act, etc.
On Oct. 24, 1990, the Mediator Arbiter approved the memorandum and certified LCP
as the sole and exclusive bargaining agent for the rank-and-file employees of Empire.
On November 1990, LCP President Navarro submitted to Empire a proposal for
collective bargaining. However, on January 1991, the private petitioners Ana Marie et
al filed a complaint for:
 Unfair Labor Practices via Illegal Lockout and Dismissal;
 Union-Busting through harassment, threats and interference to the right for
self-organization;
 Violation of the Oct. 23, 1990 memorandum
 Underpayment of wages
 Actual, moral and exemplary damages
After the submission by the parties of their respective position papers and
presentation of testimonial evidence, LA absolved private respondents of the charges
of unfair labor practice, union busting, violation of the memorandum of agreement,
underpayment of wages and denied petitioners’ prayer for actual, moral and
exemplary damages. LA, however, directed the reinstatement of the individual
complainants except those who resigned and executed quitclaims and releases prior
to the filing of this complaint.
On appeal, the NLRC Remanded case to Labor Arbiter for further
proceedings due to overlooking “…the testimonies of some of the individual
complainants which are now on record”.
The case was dismissed by the LA stating that Complainants failed to present
with definiteness and clarity the particular act or acts constitutive of unfair labor
practice, declaration of Unfair Labor Practices connotes a finding of prima facie
evidence of probability that a criminal offense may have been committed so as to
warrant the filing of a criminal information before the regular court. As regards the
issue of harassment, threats and interference with the rights of employees to self-
organization which is actually an ingredient of unfair labor practice, complainants
failed to specify what type of threats or intimidation was committed and who
committed the same. Affirmed by the NLRC stating that (a) there was a dearth of
evidence to prove the existence of unfair labor practice and union busting on the part
of private respondents; (b) the agreement of 23 October 1990 could not be made the
basis of an obligation within the ambit of the NLRC’s jurisdiction, as the provisions
thereof, particularly Section 2, spoke of a resolutory condition which could or could
not happen; (c) the claims for underpayment of wages were without basis as
complainants were admittedly “pakiao” workers and paid on the basis of their output
subject to the lone limitation that the payment conformed to the minimum wage rate
for an eight-hour workday; and (d) petitioners were not underpaid. Their motion for
reconsideration having been denied by the NLRC, hence, this petition.
Issue: WON the petitioners are entitled to labor standard benefits, considering their
status as piece rate workers.
Held:
Yes. petitioners are entitled to labor standards benefits, namely, holiday pay,
premium pay, 13th month pay and service incentive leave. Supreme Court decision
cites that petitioners, despite being “pakyao” or piece workers does not imply that they
are not regular employees entitled to reinstatement. Applying the two-fold test from
LC Article 286(n) [Art. 280 (old)], the SC found that the supposedly piece workers
had three factors in their favor:
a) The nature of the tasks of Ana Marie, et al of repacking snack food items was
NECESSARY and DESIRABLE in the usual business of Empire Foods,
which is a food and fruit processing company. According to Tabas vs
California Manufacturing, merchandisers of processed food who coordinates
for sales of processed food was a necessity and was desirable for the day-to-
day operations of a food processing company. With more reason would the
job of food packers be necessary for the day-to-day operations of a food
processing plant.
b) Ana Marie et al worked throughout the year, with their employment being
independent from a specific project or season.
c) The length of time that petitioners fulfilled the requirement of Article 286(n).
Therefore, the SC considered the employees as regular employees despite their status
as piece workers, according them benefits such as holiday pay, premium pay, 13 th
month pay and service incentive leave.
The Rules Implementing the Labor Code exclude certain employees from
receiving benefits such as nighttime pay, holiday pay, service incentive leaves and
13th month pay, inter alia, "field personnel and other employees whose time and
performance is unsupervised by the employer, including those who are engaged on
task or contract basis, purely commission basis, or those who are paid a fixed amount
for performing work irrespective of the time consumed in the performance thereof."
However, petitioners as piece-rate workers do not fall within this group. Not only did
the employees labor under the control of Empire, the employees also worked
throughout the year to fulfil their quota as “basis for compensation”.
Further, in Section 8 (b), Rule IV, Book III, piece workers are specifically
mentioned as being entitled to holiday pay.
In addition, the Revised Guidelines on the Implementation of the 13th Month
Pay Law, in view of the modifications to P.D. No. 851 19 by Memorandum Order No.
28, clearly exclude the employer of piece rate workers from those exempted from
paying 13th month pay.
They should also be paid for overtime pay, even though Sec. 2(e), Rule I,
Book III of the Implementing Rules states that:
“…workers who are paid by results including those who are paid on piece-
work, takay, pakiao, or task basis, if their output rates are in accordance with
the standards prescribed under Sec. 8, Rule VII, Book III, of these
regulations, or where such rates have been fixed by the Secretary of Labor in
accordance with the aforesaid section, are not entitled to receive overtime
pay.”
In this case, Empire Foods did not allege that they
adhered
 to
 the
 standards
 set forth
 in
 Sec. 8, Rule VII, Book III,
nor
 with
 the
 rates
 prescribed
 by
 the
 Secretary
 of
 Labor. Therefore,
even though they are piece workers, they are entitled to overtime pay.
With regard to the issue of abandonment of work, the SC cited the Office of
Solicitor General’s observations:
In finding that petitioner employees abandoned their work, the Labor Arbiter
and the NLRC relied on the testimony of Security Guard Rolando Cairo that
on January 21, 1991, petitioners refused to work. As a result of their failure
to work, the cheese curls ready for repacking on said date were spoiled…
… The failure to work for one day, which resulted in the spoilage of cheese
curls does not amount to abandonment of work. In fact two (2) days after the
reported abandonment of work or on January 23, 1991, petitioners filed a
 complaint for, among others, unfair labor practice, illegal lockout and/or
illegal dismissal.

Furthermore, the SC stressed that the burden of proving the existence of just
cause for dismissing an employee, such as abandonment, rests on the employer.
According to the SC, Empire Foods failed to discharge this burden as basis for
dismissing the employees.

Also, the SC considered that, in terminating the employees for abandonment

of work, Empire failed to serve to the employees a written notice of termination (as
required by the Two-Notice rule and Section 2, Rule XIV, Book V of the Omnibus
Rules), violating the employees’ right to security of tenure and the constitutional right
to due process.