5.
ASIA BED FACTORY v NATIONAL BED AND KAPOK INDUSTRIES WORKER’S
UNION
GR NO. L-9126
January 31, 1957
By: Gayares
Topic: Loss of the thing due; condonation or remission of debt, confusion or merger
of rights.
Petitioners: Asia Bed Factory (ABF)
Respondents: National Bed and Kapok Industries Workers’ Union (Union)
Ponente: Reyes, A.J.
RECIT-READY/SUMMARY: ABF and Union entered into a CBA, which allowed ABF
to give its employees work on Sundays and pay them for that amount of work. The
agreement also states that ABF must pay its employees for no Sunday work if the
fault is not due to the employees. However, Blue Sunday Law was passed which
prohibits work on Sundays. But due to the CBA, the employees still demanded
Sunday payment. Court ruled in favor of ABF.
DOCTRINE:
If the intention of the law is lawful and valid, it would not infringe the constitutional
prohibition against the impairment of the obligations of the contract between
parties.
FACTS:
 ABF and Union entered into a collective bargaining agreement (CBA)
which contained the following:
o Employees paid on a monthly basis at a daily rate based on
their current compensation plus the additional increase of
P0.30 cents a day;
o Employees shall be provided with work every Sunday and they
will work for half a day.
o If there is no work to be done on Sunday and employees are
not available for work through no fault of theirs, they shall be
entitled to payment of the equivalent of their wages as if they
had performed referred to that day.
o In the event that an employee shall absent for no excusable
reasons, the Company shall be entitled to reduce the wages.
 ABF complied with the terms until it was forced to suspend its business
on Sundays due to RA 946 (Blue Sunday Law), which prohibits the
operation of certain enterprises on Sundays.
 Some of the employees then demanded that they are entitled to Sunday
wages even if they do not work due to their CBA.
 Hence, petitioner filed in the CFI for a declaratory judgment that it ceased
to be bound by the CBA when the Blue Sunday Law took effect.
 Union filed for a motion for a summary judgment declaring that the
employees were entitled to the Sunday wages notwithstanding the
passages of the Blue Sunday Law.
 RTC: In view of the Blue Sunday Law, petitioner was relieved from its
compliance with its agreement to provide work on Sundays and to pay
them such wage.
 CA: Appeal of Union is denied.
ISSUE:
W/N the passage of Blue Sunday Law relieved ABF from complying with its
agreement to pay its laborers Sunday wages?
HELD/RATIO:
YES – The clause in question provided for the mutual prestations between the
contracting parties, ABF and Union. ABF has to provide its employees Sunday work
and pay them for such work; and the employees must do the work given to them.
However, those prestations became impossible when the Blue Sunday Law
prohibited operations of business establishments during Sundays.
The CBA puts the employees on a daily basis at rates of compensation. Payment
for Sundays is only due because of the work done.
While it is true that the CBA states that if no work is made available on those days
without the fault of the employees, ABF will still be liable to pay them wages; but
the fact that the law does not give the employer the right to provide work on
Sunday makes it seem that the Court will deprive the employer of his right without
relieving him of the obligation to pay employees who did no work.
Additionally, there is no attempt by ABF to reduce the compensation of the
employees as alleged by Union because it is the law itself that deprives the
employees of work on Sundays, thus, preventing them to earn.
There is no merit to the contention that to apply the Blue Sunday Law to their
agreement would infringe the constitutional prohibition against the impairment of
the obligations of contract. The Blue Sunday Law is intended for the health, well-
being, and happiness of the working class and is a legitimate exercise of police
power.
Judgment of the lower court is affirmed.