NO WORK, NO PAY PRINCIPLE

CASE DIGESTS

1. AKLAN ELECTRIC CO., INC. VS. NLRC

G.R. NO. 121439, 25 JANUARY 2000

FACTS:

On January 22, 1992, Aklan Electric Cooperative, Inc. AKELCO petitioner’s Board of Directors
passed a resolution temporarily transferring the Office from Lezo, Aklan to Amon Theater, Kalibo,
Aklan upon the recommendation of Atty. Leovigildo Mationg, then project supervisor, on the
ground that the office at Lezo was dangerous and unsafe. The majority of the employees including
herein private respondents continued to report for work at Lezo Aklan and were paid of their
salaries. Later, AKELCO withdraw the temporary designation at Kalibo and that the daily
operations must be held again at the main office of Lezo, Aklan. Those who continuously reported
for work at Lezo, Aklan in compliance with the aforementioned resolution were not paid their
salaries.

Private respondents did not only objected to the transfer of petitioner’s business office to Kalibo
but they also defied the directive to report thereat because they considered the transfer illegal.
Private respondents refused to recognize the authority of petitioner’s lawful officers and agents
resulting in the disruption of petitioner’s business operations. They cannot choose where to work,
thus, when they defied the lawful orders of petitioner to report at Kalibo, private respondents
were considered dismissed as far as petitioner was concerned. They were dismissed by petitioner
after the strike done by them, but were accepted back, as an act of compassion, subject to the
condition of "no work, no pay". At about ten months after, they requested for the payment of their
backwages claiming for non-payment of salaries and wages.

ISSUE:

Whether or not private respondents refused to work under the lawful orders of the petitioner
AKELCO management, hence they are covered by the "no work, no pay" principle and are thus not
entitled to the claim for unpaid wages.

HELD:

Yes. Private respondents refused to work under the lawful orders of the petitioner AKELCO
management; hence they are covered by the "no work, no pay" principle and are thus not entitled
to the claim for unpaid wages.

Private respondents had not rendered services from June 16, 1992 to March 18, 1993 so as to
entitle them to payment of wages. They could not have worked for petitioner’s office in Lezo
during the stated period since petitioner transferred its business operation in Kalibo where all its
records and equipments were brought. The computations of the claims for wages and benefits
submitted by private respondents to petitioner is not proof of rendition of work.

There allegations that they continued to report for work at Lezo to support their claim for wages
has no basis. There is no allegation nor proof that the transfer was made in bad faith or with
malice.

The age-old rule governing the relation between labor and capital, or management and employee
of a "fair day’s wage for a fair day’s labor" remains as the basic factor in determining employees’
wages. If there is no work performed by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but was illegally locked out, suspended or
dismissed, or otherwise illegally prevented from working.
It would neither be fair nor just to allow private respondents to recover something they have not
earned and could not have earned because they did not render services at the Kalibo office during
the stated period. 

Thus, private respondents complaint for payment of unpaid wages before the Labor Arbiter is
DISMISSED.

2. REPUBLIC VS. PACHEO

G.R. NO. 178021 JANUARY 25, 2012

FACTS:

Pacheo was a Revenue Attorney IV, Assistant Chief of the Legal Division of the Bureau of Internal
Revenue (BIR). On May 7, 2002, the BIR issued Revenue Travel Assignment Order (RTAO) ordering
the reassignment of Pacheo as Assistant Chief, Legal Division from RR7 in Quezon City to RR4 in
San Fernando, Pampanga. The BIR cited exigencies of the revenue service as basis for the issuance
of the said RTAO. Pacheo questioned the reassignment through her Letter addressed to Rene G.
Banez, then Commissioner of Internal Revenue (CIR). She was of the view that that her
reassignment was merely intended to harass and force her out of the BIR in the guise of exigencies
of the revenue service.

Pacheo appealed to the CSC where the latter granted the same. However, the CSC held that rules
and so holds that the withholding by the BIR of her salaries is justified as she is not entitled
thereto since she is deemed not to have performed any actual work in the government on the
principle of no work no pay. Still not satisfied, Pacheo moved for reconsideration. She argued that
the CSC erred in not finding that she was constructively dismissed and, therefore, entitled to back
salary.

The Court agrees that petitioner’s reassignment was not valid. The Commission, ruled and hold
the withholding by the BIR of her salaries being justified as she is not entitled thereto. She was
being reinstated to her original station without any right to claim back salary as she did not report
to work either at her new place of assignment or at her original station.

Still not satisfied, Pacheo moved for reconsideration. She argued that the CSC erred in not finding
that she was constructively dismissed and, therefore, entitled to back salary. It was legally
impossible for her to report to her original place of assignment since ther is somebody who hold
on the same position he had before. The reassignment to the same position palpably created an
impediment to Pacheo’s return to her original station.

ISSUE:

Whether or not Pacheo is not entitled for back wages applying the “no work, no pay rules” at the
time of her reassignment.

HELD:

No. Pacheo is entitled for back wages. Pacheo being constructively dismissed, is entitled to
reinstatement and is entitled to a back wages.

If there is no work performed by the employee there can be no wage or pay, unless of course the
laborer was able, willing and ready to work but was illegally locked out, dismissed or
suspended.The "No work, no pay" principle contemplates a "no work" situation where the
employees voluntarily absent themselves.

In this case, petitioner was forced to forego her continued employment and did not just abandon
her duties. In fact, she lost no time in protesting her reassignment as a form of constructive
dismissal. It is settled that the filing of a complaint for illegal dismissal is inconsistent with a
charge of abandonment. The filing of the complaint is proof enough of his desire to return to work,
thus negating any suggestion of abandonment.

The principle of "no work, no pay" does not apply when the employee himself was forced out of
job. Indeed, it is not always true that back salaries are paid only when work is done. For another,
the poor employee could offer no work since he was forced out of work. Thus, to always require
complete exoneration or performance of work would ultimately leave the dismissal
uncompensated no matter how grossly disproportionate the penalty was. Clearly, it does not serve
justice to simply restore the dismissed employee to his position and deny him his claim for back
salaries and other economic benefits on these grounds. We would otherwise be serving justice in
halves."

An illegally dismissed government employee who is later ordered reinstated is entitled to back
wages and other monetary benefits from the time of his illegal dismissal up to his reinstatement.
This is only fair and sensible because an employee who is reinstated after having been illegally
dismissed is considered as not having left his office and should be given a comparable
compensation at the time of his reinstatement.

Thus, Pacheo being constructively dismissed, is entitled to reinstatement and is entitled to a back
wages and benefits from her illegal dismissal up to her reinstatement.

3. J.P. HEILBRONN C. VS. NATIONAL LABOR UNION

G.R. No. L-5121January 30, 1953

FACTS:

The case was docketed as "National Labor Union, petitioner, vs. J.P. Heilbronn Co., respondent,
case No. 160-V." In connection with the hearing of that case, particularly incidental motions and
petitions concerning questions that arose between the management and its employees who were
members of J.P. Heilbronn Employees Association affiliated with the National Labor Union,
Armando Ocampo and Protacio Ty, President and Secretary, respectively, of the local union
attended the conferences and hearing before the CIR, in some cases assisting the lawyer who
represented them.

Subsequently, a motion was filed in the case by the Labor Union in behalf of Armando Ocampo
and Protacio Ty praying the court to order the Company to pay to these men the amounts of P88
and P64.65 respectively, corresponding to the deductions in their salaries made by the Company
on the days or hours of their absence from their work while attending the conferences and hearing
already mentioned. Despite opposition of the company to the said motion, the same was granted
by the CIR.

The action taken by the CIR is hardly consistent with its previous rulings regarding payment of
wages or salaries to laborers or employees who had voluntarily absented themselves from work.

ISSUE:

Whether or not the Laborers who voluntarily absent themselves from work to attend the hearing
of a case in which they seek to prove and establish their demands against the company should lose
their pay during that period.

HELD:

Yes.
Laborers who voluntarily absent themselves from work to attend the hearing of a case in which
they seek to prove and establish their demands against the company, the legality and propriety of
which demands is not yet known, should lose their pay during the period of such absence from
work.

The age-old rule governing the relation between labor and capital or management and employee
is that a "fair day's wage for a fair day's labor." If there is no work performed by the employee
there can be no wage or pay, unless of course, the laborer was able, willing and ready to work but
was illegally locked out, dismissed or suspended. It is hardly fair or just for an employee or laborer
to fight or litigate against his employer on the employer's time.

In a case where a laborer absents himself from work because of a strike or to attend a conference
or hearing in a case or incident between him and his employer, he might seek reimbursement of
his wages from his union which had declared the strike or filed the case in the industrial court. Or,
in the present case, he might have his absence from his work charged against his vacation leave.

Three of the Justices who sign the present decision believe that the deductions made from the
wages of Armando Ocampo and Protacio Ty might possibly be charged as damages in the case in
the event that the said case in the CIR prosecuted in behalf of their union is finally decided in their
favor and against the company.

In view of the foregoing, the order appealed from ordering the reimbursement of the salaries or
wages of Armando Ocampo and Protacio Ty corresponding to the days or portion of days they
were absent from work his hereby set aside, with costs.

4. ODANGO VS. NLRC

G.R. NO. 147420 June 10, 2004

FACTS:

Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday to Friday
and half of Saturday. After a routine inspection, the Regional Branch of the Department of Labor
and Employment ("DOLE") found ANTECO liable for underpayment of the monthly salaries of its
employees. On 10 September 1989, the DOLE directed ANTECO to pay its employees wage
differentials amounting to ₱1,427,412.75. ANTECO failed to pay. 

Thus, on various dates in 1995, thirty-three (33) monthly-paid employees filed complaints with
the NLRC praying for payment of wage differentials, damages and attorney’s fees. The Labor
Arbiter rendered a Decision in favor of petitioners granting them wage differentials. ANTECO
appealed, CA denied petitioner’s claim.

Petitioners claim that the Court of Appeals gravely erred in denying their claim for wage
differentials. Petitioners base their claim on Section 2, Rule IV of Book III of the Omnibus Rules
Implementing the Labor Code. Petitioners argue that under this provision monthly-paid
employees are considered paid for all days of the month including un-worked days.

ISSUE:

Whether or not petitioners are entitled for wage differentials.

HELD:

No. Petitioners are entitled for wage differentials

The Labor Code is clear that monthly-paid employees are not excluded from the benefits of
holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary
of Labor excludes monthly-paid employees from the said benefits by inserting, under Rule IV,
Book III of the implementing rules, Section 2 which provides that monthly-paid employees are
presumed to be paid for all days in the month whether worked or not.

Thus, Section 2 cannot serve as basis of any right or claim. Absent any other legal basis,
petitioners’ claim for wage differentials must fail. 

The basic rule in this jurisdiction is "no work, no pay." The right to be paid for un-worked days is
generally limited to the ten legal holidays in a year.

Petitioners’ claim is based on a mistaken notion that Section 2, Rule IV of Book III gave rise to a
right to be paid for un-worked days beyond the ten legal holidays. In effect, petitioners demand
that ANTECO should pay them on Sundays, the un-worked half of Saturdays and other days that
they do not work at all. Petitioners’ line of reasoning is not only a violation of the "no work, no
pay" principle, it also gives rise to an invidious classification, a violation of the equal protection
clause. Sustaining petitioners’ argument will make monthly-paid employees a privileged class who
aren't paid even if they do not work. 

Thus, the petition is denied.

5. TRI-C GENERAL SERVICES VS. MATUTO

G.R. No. 194686 September 23, 2015

FACTS:

Petitioner Tri-C General Services, Inc. is a manpower agency engaged in the business of supplying
services to all PLDT Business Offices in Laguna. Respondents Nolasco Matuto (Matuto), Magno and
Laviñ a were hired by petitioner as janitors/janitress assigned at the PLDT Business Office in
Calamba City. Magno was hired on August 1, 1993 while Matuto was hired on June 5, 1995 and
Laviñ a on February 4, 1996. On November 3, 2004, Matuto and Laviñ a were barred from their
work place in PLDT-Calamba, while Magno was denied entry on November 26, 2004. Thus,
respondents filed an illegal dismissal case against petitioner.

The respondents averred that sometime in January 1997, they spearheaded the first complaint of
several janitors against petitioner for underpayment of wages and violation of labor standards
before the Department of Labor and Employment. The LA decided in their favor and ordered the
petitioner to pay their underpaid salaries. However, petitioner did not pay the respondents with
the mandated minimum wage but merely increased their salaries by _5.00 every year. They
alleged that since then, they earned the ire of petitioner and experienced harassment and
intimidation. Respondents further alleged that assuming that petitioner had valid ground to
terminate them, their termination was still deemed illegal since petitioner failed to furnish them
with the two notices required by law.

In its defense, petitioner denied dismissing respondents. PLDT-Laguna informed petitioner that it
would implement cost-cutting measures and that it would discontinue, after careful assessment,
the services of respondents. Petitioner further claimed that it had no other recourse but to
temporarily put the respondents on "floating status" upon termination of client's contract since
their work was entirely dependent on the need for janitorial services of its clients.

Subsequent letters pertain to the request for the respondents to report at petitioner’s main office.
The respondents were warned that failure to report at their office will mean that they were no
longer interested in their work.
The LA ruled in favor of the petitioner, considered the complaint for illegal dismissal is DISMISSED
for lack of merit except that TRI-C GENERAL SERVICES, INC. is ordered to pay complainants their
separation pay. Respondents elevated the matters to the NLRC, which sustained the decision of the
LA that they were not illegally dismissed. The separation pay, however, was deleted. They
appealed to CA. CA reversed the decision and declared that respondents were illegally dismissed
ordering Tri-C payment of full backwages from the time of their illegal dismissal of the
respondents.

ISSUE:

Whether or not the respondent is illegally dismissed.

HELD:

No. The respondents are not illegally dismissed. They cannot avail to claim back wages in case of
reinstatement applying the principle of “no work, no pay”.

In the present case, it was settled that respondents were not illegally dismissed from employment
and their wages were not withheld without valid and legal basis. Aside from their mere assertion
and joint affidavit, respondents failed to adduce corroborative and competent evidence to
substantiate their conclusion that they were dismissed from employment. Respondents did not
even present the alleged notice of termination of their employment. Therefore, in the absence of
any showing of an overt or positive act proving that petitioner had dismissed respondents, the
latter’s claim of illegal dismissal cannot be sustained as the same would be self-serving,
conjectural and of no probative value

As all circumstances surrounding the alleged termination are taken into account, petitioner should
accept respondents back and reinstate them to their former positions. However, under the
principle of "no work, no pay," there should be no payment of backwages. In a case where the
employee's failure to work was occasioned neither by his abandonment nor by a termination, the
burden of economic loss is not rightfully shifted to the employer; each party must bear his own
loss.

Thus, the decision rendered by the Court of Appeals is REVERSED and SET ASIDE.