31 Insular Bank of Asia and America Employees’ Union v.
Inciong pay all its employees for all the regular holidays since 1 Nov 1974.
G.R. No. L-52415 | 23 October 1984 | Makasiar | Santos
PETITIONER: Insular Bank of Asia and America Employees’ Union (IBAAEU)
RESPONDENTS: Hon. Inciong Amado, Deputy Minister of the Ministry of Labor,
and Insular Bank of Asia
RECIT-READY: Petitioner IBAAEU filed a complaint against respondent Insular
Bank of Asia for the payment of holiday pay. The holiday claims of petitioner were
granted by the LA. Respondent bank complied with this ruling, only to stop
payment of holiday pay on account of the passage of Sec 2, Rule IV and Book III
of the Implementing Rules and Policy Instruction No. 9. Both laws indicate that
monthly-paid employees are excluded from the coverage of holiday pay.
Petitioner argues before the SC that these subject laws are null and void since
itenlarged the scope of exclusion for holiday pay. Public respondent Inciong
asserts that holiday pay is primarily intended for the benefit of the daily-paid
employees since their employment and income is circumscribed by the principle
of no work, no pay. The SC ruled in favor of petitioner.
In this case, the provisions of the LC on the entitlement to the benefits of holiday
pay are clear and explicit. Policy Instruction No. 9 went as far to state that the
benefit is principally intended for daily paid employees, when the law clearly
states states that every worker shall be paid their regular holiday pay. Until the
provisions of the Labor Code on holiday pay is amended by another law, monthly
paid employees are included in the benefits of regular holiday pay. Thus, the SC
declared Sec. 2, Rule IV, Book III of the Rules Implementing the Labor Code and
Policy Instruction No. 9 null and void.
DOCTRINE:
Montlly paid employees are not excluded from the benefits of holiday pay.
The law is explicit and cleat when it stated that every worker shall be paid
their regular holiday pay.
FACTS:
1. Petitioner IBAAEU filed a complaint against respondent Insular Bank of Asia
for the payment of holiday pay.
2. LA Ricarte Soriano granted the holiday pay claims. It held that the daily rate
of pay of the bank employees was computed in the past with unworked
refular holidays as excluded for purposes of determining the deductble
amount for absences incurred. Consequently, it ordered respondent bank to
3. Respondent bank opt not to appeal from this decision, but instead complied
witht the LA’s ruling until Jan 1976.
4. IMPT! When PD 850 was promulgated amending certain provisions of the
Labor Code, the Department of Labor promulgated the rules and regulations
for the implementation of holidays with pay. Sec 2, Rule IV, Book III of the
Implementing Rules provide:
Sec. 2. Status of employees paid by the month. — Employees who are
uniformly paid by the month, irrespective of the number of working days
therein, with a salary of not less than the statutory or established minimum
wage shall be presumed to be paid for all days in the month whether worked
or not.
For this purpose, the monthly minimum wage shall not be less than the
statutory minimum wage multiplied by 365 days divided by twelve.
Policy Instruction No. 9 was issued by the then Secretary of Labor (now
Minister) interpreting the above-quoted rule, which states:
xxx xxx xxx
The ten (10) paid legal holidays law, to start with, is intended to
benefit principally daily employees. In the case of monthly, only
those whose monthly salary did not yet include payment for the ten
(10) paid legal holidays are entitled to the benefit.
Under the rules implementing P.D. 850, this policy has been fully
clarified to eliminate controversies on the entitlement of monthly
paid employees, The new determining rule is this: If the monthly
paid employee is receiving not less than P240, the maximum
monthly minimum wage, and his monthly pay is uniform from
January to December, he is presumed to be already paid the ten
(10) paid legal holidays. However, if deductions are made from his
monthly salary on account of holidays in months where they occur,
then he is still entitled to the ten (10) paid legal holidays.
5. By reason of such ruling, respondent bank stopped payment of holiday pay.
Subsequently, petitioner filed a motion for Writ of Execution force the bank to
 pay its employees.
- Based on this motion, LA Soriano, issued order enjoining the
respondent bank to continue paying its employees their regular holiday
pay.
- Upon elevation to the NLRC, it dismissed respondent bank’s appeal
- Respondent bank then resorted to a Motion for Reconsideration with the
Office of the Minister of Labor. The Office of the Minister of Labor,
through Deputy Minister Incong, reversed the NLRC’s decision.
6. Public respondent Inciong asserts that rules implementing PD 850 and
Policy Instruction No. 9 were issued to claify the policy in the implementation
of the 10 paid legal holidays. The 10[12 now] legal holidays law is intended
to benefit principally daily paid employees. In case of monthly, only those
whose monthly salary did not yet include payment for the 10 paid legal
holidays are entitled to the benefit. He theorizes that because the daily-paid
workers are employees whose income are circumscribed by the principle of
no work, no pay, holiday pay is intended to primarily benefit them.
the Art. 4 of the LC, which states that “All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be reslved in favor of labor”.
The Minister of Labor had exceeded his statutory authority granted by Art. 5 of the LC
authorizing him to promulgate the necessary implementing rules and regulations. The
SC noted that administrative interpretation of the law is at best merely advisory, for it
is the courts that finally determine what the law means.
3. Until the provisions of the Labor Code on holiday pay is amended by another law,
monthly paid employees are included in the benefits of regular holiday pay. Thus, the
SC declared Sec. 2, Rule IV, Book III of the Rules Implementing the Labor Code and
Policy Instruction No. 9 null and void. Accordinlfly, public respondent had no basis at
all to deny the members of petitioner union their regular holiday pay as directed by
the Labor Code.

7. Petitioner argues before the SC that Sec. 2, Rule IV, Book III of the
Implementing Rules and Policy Instruction No. 9 are null and void since in
the guise of clarifying the Labor Code’s provisions on holiday pay, they in
effect amended them by enlarging the scope of their exclusion.

ISSUES: 1. W/N Sec. 2 of the Implementing Rules and Policy Instruction No. 9
are valid? NO

RULING:

1. Accordin to Art. 94 of the LC, every worker shall be paid his his regular daily wage
during regular holidays, except in retail and service establishments regularly
employing less than 10 workers. Corollary thereto is Art. 82 which provides the scope
holiday pay, and excluding therein government employees, managerial employees,
field personnel, members of the family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service of another, and workers
who are paid by result as determined by the Secretary of Labor.

Clearly, monthly paid employees are not excluded from the benefits of the holiday
pay. However, the implementing rules on holiday pay excludes monthly paid
employees from the said benefits.

2. In this case, the controversial Policy Instruction No. 9 went as far to state that the
benefit is principally intended for daily paid employees, when the law clearly states
states that every worker shall be paid their regular holiday pay. This is a violation of