G.R. No. 101761.
 March 24, 1993.* Same; Same; Same; Same; Payment of the questioned benefits has not
NATIONAL SUGAR REFINERIES CORPORATION,
petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and NBSR
SUPERVISORY UNION, (PACIWU) TUCP, respondents.
Labor Law; Constitutional Law; While social justice has an inclination to give
favor and protection to the working class, the cause of the labor sector is not upheld
at all times as the management has also a right entitled to respect and enforcement
in the interest of simple fair play.—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 be automatically decided in favor of labor. Management
also has its own rights which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privileges in life,
this Court has inclined more often than not toward the worker and upheld his cause
in his conflicts with the employer. Such favoritism, however, has not blinded us to
the rule that justice is in every case for the deserving, to be dispensed in the light of
the established facts and the applicable law and doctrine.
Same; Classification of Employment; Criterion which determines whether a
particular employee is within the definition of a statute is the character of work
performed rather than title or nomenclature of position held.—The question whether
a given employee is exempt from the benefits of the law is a factual one dependent
on the circumstances of the particular case. In determining whether an employee is
within the terms of the statutes, the criterion is the character of the work performed,
rather than the title of the employee's position. Consequently, while generally this
Court is not supposed to review the factual findings of respondent commission,
substantial justice and the peculiar circumstances obtaining herein mandate a
deviation from the rule.
Same; Same; Same; Overtime pay, etc.; Supervisory employees discharging
functions that qualify them as officers or members of the managerial staff considered
exempt from the coverage of Article 82 of the Labor Code and therefore, not entitled
to overtime, rest day and holiday pay—The members of respondent union discharge
duties and responsibilities which ineluctably qualify them as officers or members of
the 
______________
*
 SECOND DIVISION.
453
VOL. 220, MARCH 24, 1993  453  respondent.
National Sugar Refineries Corporation vs. NLRC
managerial staff, as defined in Section 2, Rule I, Book III of the aforestated
Rules to Implement the Labor Code, viz.: x x x Under the facts obtaining in this case,
we are constrained to agree with petitioner that the union members should be
considered as officers or members of the managerial staff and are, therefore, exempt
from the coverage of Article 82. Perforce, they are not entitled to overtime, rest day
and holiday pay.
ripened into a contractual obligation as payment thereof was made at a time when
they were rightfully entitled thereto.—We likewise do not subscribe to the finding of
the labor arbiter that the payment of the questioned benefits to the union members
has ripened into a contractual obligation. x x x The members of respondent union
were paid the questioned benefits for the reason that, at that time, they were
rightfully entitled thereto. Prior to the JE Program, they could not be categorically
classified as members or officers of the managerial staff considering that they were
then treated merely on the same level as rank-and-file. Consequently, the payment
thereof could not be construed as constitutive of voluntary employer practice, which
cannot now be unilaterally withdrawn by petitioner.
Same; Same; Same; Same; Same; Entitlement to benefits provided for by law
requires prior compliance with conditions set forth therein.—Quintessentially, with
the promotion of the union members, they are no longer entitled to the benefits
which attach and pertain exclusively to their former positions. Entitlement to the
benefits provided for by law requires prior compliance with the conditions set forth
therein. With the promotion of the members of respondent union, they occupied
positions which no longer meet the requirements imposed by law. Their assumption
of these positions removed them from the coverage of the law, ergo, their exemption
therefrom.
Same; Management Prerogatives; Promotion of employees is a recognized
management prerogative to be exercised in good faith; Case at bar.—Promotion of
its employees is one of the jurisprudentiallyrecognized exclusive prerogatives of
management, provided it is done in good faith. In the case at bar, private respondent
union has miserably failed to convince this Court that the petitioner acted in bad faith
in implementing the JE Program. There is no showing that the JE Program was
intended to circumvent the law and deprive the members of respondent union of the
benefits they used to receive.
PETITION for certiorari of the decision of the National Labor 
454
454  SUPREME COURT REPORTS ANNOTATED 
National Sugar Refineries Corporation vs. NLRC
Relations Commission.
The facts are stated in the opinion of the Court.
     Jose Mario C. Bunag for petitioner.
     The Solicitor General and the Chief Legal Officer, NLRC, for public
     Zoilo V. de la Cruz for private respondent.
REGALADO, J p:
The main issue presented for resolution in this original petition for certiorari is
whether supervisory employees, as defined in Article 212 (m), Book V of the Labor
Code, should be considered as officers or members of the managerial staff under
1
Article 82, Book III of the same Code, and hence are not entitled to overtime rest day
and holiday pay.
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation
which is fully owned and controlled by the Government, operates three (3) sugar
refineries located at Bukidnon, Iloilo and Batangas. The Batangas refinery was
privatized on April 11, 1992 pursuant to Proclamation No. 50. 1 Private respondent
union represents the former supervisors of the NASUREFCO Batangas Sugar
Refinery, namely, the Technical Assistant to the Refinery Operations Manager, Shift
Sugar Warehouse Supervisor, Senior Financial/Budget Analyst, General Accountant,
Cost Accountant, Sugar Accountant, Junior Financial/Budget Analyst, Shift Boiler
Supervisor,, Shift Operations Chemist, Shift Electrical Supervisor, General Services
Supervisor, Instrumentation Supervisor, Community Development Officer,
Employment and Training Supervisor, Assistant Safety and Security Officer, Head
and Personnel Services, Head Nurse, Property Warehouse Supervisor, Head of
Inventory Control Section, Shift Process Supervisor, Day Maintenance Supervisor
and Motorpool Supervisor.
On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all
employees, from rank-and-file to department heads. The JE Program was designed to
rationalized the duties and functions of all positions, reestablish levels of
responsibility, and recognize both wage and operational structures. Jobs were ranked
according to effort, responsibility, training and working conditions and relative worth
of the job. As a result, all positions were re-evaluated, and all employees including
the members of respondent union were granted salary adjustments and increases in
benefits commensurate to their actual duties and functions.
We glean from the records that for about ten years prior to the JE Program, the
members of respondent union were treated in the same manner as rank-and file
employees. As such, they used to be paid overtime, rest day and holiday pay
pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended.
With the implementation of the JE Program, the following adjustments were made:
(1) the members of respondent union were re-classified under levels S-5 to S-8
which are considered managerial staff for purposes of compensation and benefits; (2)
there was an increase in basic pay of the average of 50% of their basic pay prior to
the JE Program, with the union members now enjoying a wide gap (P1,269.00 per
month) in basic pay compared to the highest paid rank-and-file employee; (3)
longevity pay was increased on top of alignment adjustments; (4) they were entitled
to increased company COLA of P225.00 per month; (5) there was a grant of P100.00
allowance for rest day/holiday work.
On May 11, 1990, petitioner NASUREFCO recognized herein respondent union,
which was organized pursuant to Republic Act NO. 6715 allowing supervisory
employees to form their own unions, as the bargaining representative of all the
supervisory employees at the NASUREFCO Batangas Sugar Refinery.
Two years after the implementation of the JE Program, specifically on June 20, 1990,
the members of herein respondent union filed a complainant with the executive labor
arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation
of Article 100 of the Labor Code.
On January 7, 1991, Executive Labor Arbiter Antonio C. Pido rendered a decision 2
disposing as follows:
"WHEREFORE, premises considered, respondent National Sugar refineries
Corporation is hereby directed to —
1. pay the individual members of complainant union the usual overtime pay, rest day
pay and holiday pay enjoyed by them instead of the P100.00 special allowance which
was implemented on June 11, 1988; and
2. pay the individual members of complainant union the difference in money value
between the P100.00 special allowance and the overtime pay, rest day pay and
holiday pay that they ought to have received from June 1, 1988.
All other claims are hereby dismissed for lack of merit.
SO ORDERED."
In finding for the members therein respondent union, the labor ruled that the along
span of time during which the benefits were being paid to the supervisors has
accused the payment thereof to ripen into contractual obligation; at the complainants
cannot be estopped from questioning the validity of the new compensation package
despite the fact that they have been receiving the benefits therefrom, considering that
respondent union was formed only a year after the implementation of the Job
Evaluation Program, hence there was no way for the individual supervisors to
express their collective response thereto prior to the formation of the union; and the
comparative computations presented by the private respondent union showed that the
P100.00 special allowance given NASUREFCO fell short of what the supervisors
ought to receive had the overtime pay rest day pay and holiday pay not been
discontinued, which arrangement, therefore, amounted to a diminution of benefits.
On appeal, in a decision promulgated on July 19, 1991 by its Third Division,
respondent National Labor Relations Commission (NLRC) affirmed the decision of
the labor arbiter on the ground that the members of respondent union are not
managerial employees, as defined under Article 212 (m) of the Labor Code and,
2
therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC
declared that these supervisory employees are merely exercising recommendatory
powers subject to the evaluation, review and final action by their department heads;
their responsibilities do not require the exercise of discretion and independent
judgment; they do not participate in the formulation of management policies nor in
the hiring or firing of employees; and their main function is to carry out the ready
policies and plans of the corporation. 3 Reconsideration of said decision was denied
in a resolution of public respondent dated August 30, 1991. 4  employer who are dependent on him for support, domestic helpers, persons in the
Hence this petition for certiorari, with petitioner NASUREFCO asseverating that
public respondent commission committed a grave abuse of discretion in refusing to
recognized the fact that the members of respondent union are members of the
managerial staff who are not entitled to overtime, rest day and holiday pay; and in
making petitioner assume the "double burden" of giving the benefits due to rank-and-
file employees together with those due to supervisors under the JE Program.
We find creditable merit in the petition and that the extraordinary writ of certiorari
shall accordingly issue.
The primordial issue to be resolved herein is whether the members of respondent
union are entitled to overtime, rest day and holiday pay. Before this can be resolved,
however it must of necessity be ascertained first whether or not the union members,
as supervisory employees, are to be considered as officers or members of the
managerial staff who are exempt from the coverage of Article 82 of the Labor Code.
It is not disputed that the members of respondent union are supervisory employees,
as defined employees, as defined under Article 212(m), Book V of the Labor Code
on Labor Relations, which reads:
"(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharged, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer effectively recommend such managerial actions
if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not falling within any of
those above definitions are considered rank-and-file employees of this Book."
Respondent NLRC, in holding that the union members are entitled to overtime, rest
day and holiday pay, and in ruling that the latter are not managerial employees,
adopted the definition stated in the aforequoted statutory provision.
Petitioner, however, avers that for purposes of determining whether or not the
members of respondent union are entitled to overtime, rest day and holiday pay, said
employees should be considered as "officers or members of the managerial staff" as
defined under Article 82, Book III of the Labor Code on "Working Conditions and
Rest Periods" and amplified in Section 2, Rule I, Book III of the Rules to Implement
the Labor Code, to wit:
"Art. 82 Coverage. — The provisions of this title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the
personal service of another, and workers who are paid by results as determined by
the Secretary of Labor in Appropriate regulations.
"As used herein, 'managerial employees' refer to those whose primary duty consists
of the management of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or members of the
managerial staff." (Emphasis supplied.)
xxx xxx xxx
'Sec. 2. Exemption. — The provisions of this rule shall not apply to the following
persons if they qualify for exemption under the condition set forth herein:
xxx xxx xxx
(b) Managerial employees, if they meet all of the following conditions, namely:
(1) Their primary duty consists of the management of the establishment in which
they are employed or of a department or subdivision thereof:
(2) They customarily and regularly direct the work of two or more employees
therein:
(3) 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.
(c) Officers or members of a managerial staff if they perform the following duties
and responsibilities:
(1) The primary duty consists of the performance of work directly related to
management policies of their employer;
(2) Customarily and regularly exercise discretion and independent judgment;
3
(3) (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
(4) Who do not devote more 20 percent of their hours worked in a work-week to
activities which are not directly and closely related to the performance of the work
described in paragraphs (1), (2), and above."
It is the submission of petitioner that while the members of respondent union, as
supervisors, may not be occupying managerial positions, they are clearly officers or
members of the managerial staff because they meet all the conditions prescribed by
law and, hence, they are not entitled to overtime, rest day and supervisory employees
under Article 212 (m) should be made to apply only to the provisions on Labor
Relations, while the right of said employees to the questioned benefits should be
considered in the light of the meaning of a managerial employee and of the officers
or members of the managerial staff, as contemplated under Article 82 of the Code
and Section 2, Rule I Book III of the implementing rules. In other words, for
purposes of forming and joining unions, certification elections, collective bargaining,
and so forth, the union members are supervisory employees. In terms of working
conditions and rest periods and entitlement to the questioned benefits, however, they
are officers or members of the managerial staff, hence they are not entitled thereto.
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 be
automatically decided in favor of labor. Management also has its own rights which,
as such, are entitled to respect and enforcement in the interest of simple fair play.
Out of its concern for those with less privileges in life, this Court has inclined more
often than not toward the worker and upheld his cause in his conflicts with the
employer. Such favoritism, however, has not blinded us to the rule that justice is in
every case for the deserving, to be dispensed in the light of the established facts and
the applicable law and doctrine. 5 
This is one such case where we are inclined to tip the scales of justice in favor of the
employer.
The question whether a given employee is exempt from the benefits of the law is a
factual one dependent on the circumstances of the particular case, In determining
whether an employee is within the terms of the statutes, the criterion is the character
of the work performed, rather than the title of the employee's position. 6 
Consequently, while generally this Court is not supposed to review the factual
findings of respondent commission, substantial justice and the peculiar
circumstances obtaining herein mandate a deviation from the rule.
A cursory perusal of the Job Value Contribution Statements 7 of the union members
will readily show that these supervisory employees are under the direct supervision
of their respective department superintendents and that generally they assist the latter
in planning, organizing, staffing, directing, controlling communicating and in
making decisions in attaining the company's set goals and objectives. These
supervisory employees are likewise responsible for the effective and efficient
operation of their respective departments. More specifically, their duties and
functions include, among others, the following operations whereby the employee:
1) assists the department superintendent in the following:
a) planning of systems and procedures relative to department activities;
b) organizing and scheduling of work activities of the department, which includes
employee shifting scheduled and manning complement;
c) decision making by providing relevant information data and other inputs;
d) attaining the company's set goals and objectives by giving his full support;
e) selecting the appropriate man to handle the job in the department; and
f) preparing annual departmental budget;
2) observes, follows and implements company policies at all times and recommends
disciplinary action on erring subordinates;
3) trains and guides subordinates on how to assume responsibilities and become
more productive;
4) conducts semi-annual performance evaluation of his subordinates and
recommends necessary action for their development/advancement;
5) represents the superintendent or the department when appointed and authorized by
the former;
6) coordinates and communicates with other inter and intra department supervisors
when necessary;
4
7) recommends disciplinary actions/promotions;
8) recommends measures to improve work methods, equipment performance, quality
of service and working conditions;
9) sees to it that safety rules and regulations and procedure and are implemented and
followed by all NASUREFCO employees, recommends revisions or modifications to
said rules when deemed necessary, and initiates and prepares reports for any
observed abnormality within the refinery;
10) supervises the activities of all personnel under him and goes to it that instructions
to subordinates are properly implemented; and
11) performs other related tasks as may be assigned by his immediate superior.
From the foregoing, it is apparent that the members of respondent union discharge
duties and responsibilities which ineluctably qualify them as officers or members of
the managerial staff, as defined in Section 2, Rule I Book III of the aforestated Rules
to Implement the Labor Code, viz.: (1) their primary duty consists of the
performance of work directly related to management policies of their employer; (2)
they customarily and regularly exercise discretion and independent judgment; (3)
they regularly and directly assist the managerial employee whose primary duty
consist of the management of a department of the establishment in which they are
employed (4) they execute, under general supervision, work along specialized or
technical lines requiring special training, experience, or knowledge; (5) they execute,
under general supervision, special assignments and tasks; and (6) they do not devote
more than 20% of their hours worked in a work-week to activities which are not
directly and clearly related to the performance of their work hereinbefore described.  It bears mention that this positional submission was never refuted nor controverted
Under the facts obtaining in this case, we are constrained to agree with petitioner that
the union members should be considered as officers and members of the managerial
staff and are, therefore, exempt from the coverage of Article 82. Perforce, they are
not entitled to overtime, rest day and holiday.
The distinction made by respondent NLRC on the basis of whether or not the union
members are managerial employees, to determine the latter's entitlement to the
questioned benefits, is misplaced and inappropriate. It is admitted that these union
members are supervisory employees and this is one instance where the
nomenclatures or titles of their jobs conform with the nature of their functions.
Hence, to distinguish them from a managerial employee, as defined either under
Articles 82 or 212 (m) of the Labor Code, is puerile and in efficacious. The
controversy actually involved here seeks a determination of whether or not these
supervisory employees ought to be considered as officers or members of the
managerial staff. The distinction, therefore, should have been made along that line
and its corresponding conceptual criteria.
II. We likewise no not subscribe to the finding of the labor arbiter that the payment
of the questioned benefits to the union members has ripened into a contractual
obligation.
A. Prior to the JE Program, the union members, while being supervisors, received
benefits similar to the rank-and-file employees such as overtime, rest day and
holiday pay, simply because they were treated in the same manner as rank-and-file
employees, and their basic pay was nearly on the same level as those of the latter,
aside from the fact that their specific functions and duties then as supervisors had not
been properly defined and delineated from those of the rank-and-file. Such fact is
apparent from the clarification made by petitioner in its motion for reconsideration 8
filed with respondent commission in NLRC Case No. CA No. I-000058, dated
August 16, 1991, wherein, it lucidly explained:
"But, complainants no longer occupy the same positions they held before the JE
Program. Those positions formerly classified as 'supervisory' and found after the JE
Program to be rank-and-file were classified correctly and continue to receive
overtime, holiday and restday pay. As to them, the practice subsists.
"However, those whose duties confirmed them to be supervisory, were re-evaluated,
their duties re-defined and in most cases their organizational positions re-designated
to confirm their superior rank and duties. Thus, after the JE program, complainants
cannot be said to occupy the same positions." 9 
by respondent union in any of its pleadings filed before herein public respondent or
with this Court. Hence, it can be safely concluded therefrom that the members of
respondent union were paid the questioned benefits for the reason that, at that time,
they were rightfully entitled thereto. Prior to the JE Program, they could not be
categorically classified as members or officers of the managerial staff considering
that they were then treated merely on the same level as rank-and-file. Consequently,
the payment thereof could not be construed as constitutive of voluntary employer
practice, which cannot be now be unilaterally withdrawn by petitioner. To be
considered as such, it should have been practiced over a long period of time, and
must be shown to have been consistent and deliberate. 10 
The test or rationale of this rule on long practice requires an indubitable showing that
the employer agreed to continue giving the benefits knowingly fully well that said
employees are not covered by the law requiring payment thereof. 11 In the case at
bar, respondent union failed to sufficiently establish that petitioner has been
motivated or is wont to give these benefits out of pure generosity.
5
B. It remains undisputed that the implementation of the JE Program, the members of WHEREFORE, the impugned decision and resolution of respondent National Labor
private respondent union were re-classified under levels S-5 S-8 which were Relations Commission promulgated on July 19, 1991 and August 30, 1991,
considered under the program as managerial staff purposes of compensation and respectively, are hereby ANNULLED and SET ASIDE for having been rendered and
benefits, that they occupied re-evaluated positions, and that their basic pay was adopted with grave abuse of discretion, and the basic complaint of private respondent
increased by an average of 50% of their basic salary prior to the JE Program. In other union is DISMISSED.
words, after the JE Program there was an ascent in position, rank and salary. This in
essence is a promotion which is defined as the advancement from one position to
another with an increase in duties and responsibilities as authorized by law, and
usually accompanied by an increase in salary. 12 

Quintessentially, with the promotion of the union members, they are no longer
entitled to the benefits which attach and pertain exclusively to their positions.
Entitlement to the benefits provided for by law requires prior compliance with the
conditions set forth therein. With the promotion of the members of respondent union,
they occupied positions which no longer met the requirements imposed by law. Their
assumption of these positions removed them from the coverage of the law, ergo, their
exemption therefrom.

As correctly pointed out by petitioner, if the union members really wanted to

continue receiving the benefits which attach to their former positions, there was
nothing to prevent them from refusing to accept their promotions and their
corresponding benefits. As the sating goes by, they cannot have their cake and eat it
too or, as petitioner suggests, they could not, as a simple matter of law and fairness,
get the best of both worlds at the expense of NASUREFCO.

Promotion of its employees is one of the jurisprudentially-recognized exclusive

prerogatives of management, provided it is done in good faith. In the case at bar,
private respondent union has miserably failed to convince this Court that the
petitioner acted implementing the JE Program. There is no showing that the JE
Program was intended to circumvent the law and deprive the members of respondent
union of the benefits they used to receive.

Not so long ago, on this particular score, we had the occasion to hold that: 

". . . it is the prerogative of the management to regulate, according to its discretion

and judgment, all aspects of employment. This flows from the established rule that
labor law does not authorize the substitution of the judgment of the employer in the
conduct of its business. Such management prerogative may be availed of without
fear of any liability so long as it is exercised in good faith for the advancement of the
employer's interest and not for the purpose of defeating on circumventing the rights
of employees under special laws or valid agreement and are not exercised in a
malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite."
13 

6

G.R. No. 159577. May 3, 2006.*
CHARLITO PEÑARANDA, petitioner, vs. BAGANGA PLYWOOD
CORPORATION and HUDSON CHUA, respondents.
Labor Law; Civil Procedure; 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.—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 Motion for Reconsideration, 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. Under these extenuating circumstances, the Court does not
hesitate to grant liberality in favor of petitioner and to tackle his substantive
arguments in the present case. 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.
Same; Labor Standards; Managerial Employees; Managerial employees are
exempted 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; 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.—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.”
_______________
*
 FIRST DIVISION.
95
VOL. 489, MAY 3, 2006  95  January 27, 20032 and July 4, 20033 Resolutions of the Court of Appeals (CA) in
Peñaranda vs. Baganga Plywood Corporation
Same; Same; Same; Who are deemed managerial employees.—The
Implementing Rules of the Labor Code state that managerial employees are those
who meet the following conditions: “(1) Their primary duty consists of the
management of the establishment in which they are employed or of a department or
subdivision thereof; “(2) They customarily and regularly direct the work of two or
more employees therein; “(3) 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.”
Same; Same; Same; Like managerial employees, officers and members of the
managerial staff are not entitled to the provisions of law on labor standards.—The
Court disagrees with the NLRC’s finding that petitioner was a managerial employee.
However, petitioner was a member of the managerial staff, which also takes him out
of the coverage of labor standards. Like managerial employees, officers and
members of the managerial staff are not entitled to the provisions of law on labor
standards.
Same; Same; Same; The term foreman implies that he was the representative
of management over the workers and the operation of the department.—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.
PETITION for review on certiorari of the resolutions of the Court of Appeals.
The facts are stated in the opinion of the Court.
     Angela A. Librado for petitioner.
     Leo Caubang for private respondent.
PANGANIBAN, CJ:
Managerial employees and members of the managerial staff are exempted from the
provisions of the Labor Code on labor standards. Since petitioner belongs to this
class of employees, he is not entitled to overtime pay and premium pay for working
on rest days.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the
CA-GR SP No. 74358. The earlier Resolution disposed as follows: 
"WHEREFORE, premises considered, the instant petition is hereby DISMISSED."4
The latter Resolution denied reconsideration.
On the other hand, the Decision of the National Labor Relations Commission
(NLRC) challenged in the CA disposed as follows: 
7
"WHEREFORE, premises considered, the decision of the Labor Arbiter below
awarding overtime pay and premium pay for rest day to complainant is hereby
REVERSED and SET ASIDE, and the complaint in the above-entitled case
dismissed for lack of merit.5
The Facts
Sometime in June 1999, 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.6 In May 2001, Peñaranda filed a Complaint for
illegal dismissal with money claims against BPC and its general manager, Hudson
Chua, before the NLRC.7
After the parties failed to settle amicably, the labor arbiter8 directed the parties to file
their position papers and submit supporting documents.9 Their respective allegations
are summarized by the labor arbiter as follows:
"[Peñaranda] through counsel in his position paper alleges that he was employed by
respondent [Baganga] 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.
"Upon the other hand, respondent [BPC] is a domestic corporation duly organized
and existing under Philippine laws and is represented herein by its General Manager
HUDSON CHUA, [the] individual respondent. Respondents thru counsel allege that
complainant’s separation from service was done pursuant to Art. 283 of the Labor
Code. The respondent [BPC] was on temporary closure due to repair and general
maintenance and it applied for clearance with the Department of Labor and
Employment, Regional Office No. XI to shut down and to dismiss employees (par. 2
position paper). And due to the insistence of herein complainant he was paid his
separation benefits (Annexes C and D, ibid). Consequently, when respondent [BPC]
partially reopened in January 2001, [Peñaranda] failed to reapply. Hence, he was not
terminated from employment much less illegally. He opted to severe employment
when he insisted payment of his separation benefits. Furthermore, being a
managerial employee he is not entitled to overtime pay and if ever he rendered
services beyond the normal hours of work, [there] was no office order/or
authorization for him to do so. Finally, respondents allege that the claim for damages
has no legal and factual basis and that the instant complaint must necessarily fail for
lack of merit."10
The labor arbiter ruled that there was no illegal dismissal and that petitioner’s
Complaint was premature because he was still employed by BPC.11 The temporary
closure of BPC’s plant did not terminate his 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.12
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 P21,257.98.13
Ruling of the NLRC
Respondents filed an appeal to the NLRC, which deleted the award of overtime pay
and premium pay for working on rest days. According to the Commission, petitioner
was not entitled to these awards because he was a managerial employee.14
Ruling of the Court of Appeals
In its Resolution dated January 27, 2003, the CA dismissed Peñaranda’s Petition for
Certiorari. The appellate court held that he failed to: 1) attach copies of the pleadings
submitted before the labor arbiter and NLRC; and 2) explain why the filing and
service of the Petition was not done by personal service.15
In its later Resolution dated July 4, 2003, the CA denied reconsideration on the
ground that petitioner still failed to submit the pleadings filed before the NLRC.16
Hence this Petition.17
The Issues
Petitioner states the issues in this wise: 
"The [NLRC] committed grave abuse of discretion amounting to excess or lack of
jurisdiction when it entertained the APPEAL of the respondent[s] despite the lapse of
the mandatory period of TEN DAYS.1avvphil.net
8
"The [NLRC] committed grave abuse of discretion amounting to an excess or lack of
jurisdiction when it rendered the assailed RESOLUTIONS dated May 8, 2002 and
AUGUST 16, 2002 REVERSING AND SETTING ASIDE the FACTUAL AND
LEGAL FINDINGS of the [labor arbiter] with respect to the following:
"I. The finding of the [labor arbiter] that [Peñaranda] is a regular, common
employee entitled to monetary benefits under Art. 82 [of the Labor Code].
"II. The finding that [Peñaranda] is entitled to the payment of OVERTIME
PAY and OTHER MONETARY BENEFITS."18
The Court’s Ruling
The Petition is not meritorious.
Preliminary Issue:
Resolution on the Merits
The CA dismissed Peñaranda’s Petition on purely technical grounds, particularly
with regard to the failure to submit supporting documents. 
19
In Atillo v. Bombay,  the Court held that the crucial issue is whether the documents
accompanying the petition before the CA sufficiently supported the allegations
therein. Citing this case, Piglas-Kamao v. NLRC20 stayed the dismissal of an appeal
in the exercise of its equity jurisdiction to order the adjudication on the merits.
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.21 In his Motion
for Reconsideration, petitioner also submitted the pleadings before the labor arbiter
in an attempt to comply with the CA rules.22 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.
Under these extenuating circumstances, the Court does not hesitate to grant liberality
in favor of petitioner and to tackle his substantive arguments in the present case.
Rules of procedure must be adopted to help promote, not frustrate, substantial
justice.23 The Court frowns upon the practice of dismissing cases purely on
procedural grounds.24 Considering that there was substantial compliance,25 a liberal
interpretation of procedural rules in this labor case is more in keeping with the
constitutional mandate to secure social justice.26
First Issue:
Timeliness of Appeal
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.27
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. Since
petitioner utterly failed to support his claim that respondents’ appeal was filed out of
time, we need not belabor that point. The parties alleging have the burden of
substantiating their allegations.28
Second Issue:
Nature of Employment
Petitioner claims that he was not a managerial employee, and therefore, entitled to
the award granted by the labor arbiter. 
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.29 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."30
The Implementing Rules of the Labor Code state that managerial employees are
those who meet the following conditions:
"(1) Their primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof;
"(2) They customarily and regularly direct the work of two or more
employees therein;
"(3) 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."31
9
The Court disagrees with the NLRC’s finding that petitioner was a managerial
employee. However, petitioner was a member of the managerial staff, which also
takes him out of the coverage of labor standards. Like managerial employees,
officers and members of the managerial staff are not entitled to the provisions of law
on labor standards.32 The Implementing Rules of the Labor Code define members of
a managerial staff as those with the following duties and responsibilities:
"(1) The primary duty consists of the performance of work directly related
to management policies of the employer;
"(2) Customarily and regularly exercise discretion and independent
judgment;
"(3) (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
"(4) 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."33
As shift engineer, petitioner’s duties and responsibilities were as follows:
"1. To supply the required and continuous steam to all consuming units at
minimum cost.
"2. To supervise, check and monitor manpower workmanship as well as
operation of boiler and accessories.
"3. To evaluate performance of machinery and manpower.
"4. To follow-up supply of waste and other materials for fuel.
"5. To train new employees for effective and safety while working.
"6. Recommend parts and supplies purchases.
"7. To recommend personnel actions such as: promotion, or disciplinary
action.
"8. To check water from the boiler, feedwater and softener, regenerate
softener if beyond hardness limit.
"9. Implement Chemical Dosing.
"10. Perform other task as required by the superior from time to time."34
The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that
petitioner was a member of the managerial staff. His duties and responsibilities
conform to the definition of a member of a managerial staff under the Implementing
Rules. 
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. 35
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. 36 The
term foreman implies that he was the representative of management over the workers
and the operation of the department.37 Petitioner’s evidence also showed that he was
the supervisor of the steam plant.38 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.39
On the basis of the foregoing, the Court finds no justification to award overtime pay
and premium pay for rest days to petitioner.
WHEREFORE, the Petition is DENIED. Costs against petitioner. 
SO ORDERED.
10
No. L-18353. July 31, 1963.
SAN MIGUEL BREWERY, INC., petitioner, vs.DEMOCRATIC LABOR
ORGANIZATION, ET AL., respondents.
Labor laws; Eight-Hour Labor Law; No application to outside or field sales
personnel.—Where after the morning roll call the outside or field sales personnel
leave the plant of the company to go on their respective sales routes and they do not
have a daily time record but the sales routes are so planned that they can be
completed within 8 hours at most, and they receive monthly salaries and sales
commissions in variable amounts, so that they are made to work beyond the required
eight hours similar to piece work, "pakiao", or commission basis regardless of the
time employed, and the employees' participation depends on their industry, it
is held that the Eight-Hour Labor Law has no application to said outside or field
sales personnel and that they are not entitled to overtime compensation.
Same; Same; Night salary differentials retroactive.—Watchmen who rendered
night duties once every three weeks continuously during the period of their
employment should be paid 25% additional compensation for work from 6:00 to
12:00 p.m. and 75% additional compensation for work from 12:01 to 6:00 in the
morning retroactive prior to date of demand because a similar claim had been filed
long before and had been the subject of negotiation between the union and the
company which culminated in a strike which fizzled out with the understanding that
such claim should be settled in court.
Same; Same; Sundays and holidays pay.—Watchmen who work on Sundays
and holidays are entitled to extra pay for work done during these days although they
are paid on a monthly basis and are given one day off. Section 4 of Commonwealth
Act No. 444 expressly provides that no employer may compel an employee to work
during Sundays and legal holidays unless he is paid an additional sum of his regular
compensation. This proviso is mandatory, regardless of the nature of the
compensation. The only exception is with regard to public utilities who perform
some public service.

PETITION for review of a decision of the Court of Industrial Relations.

The facts are stated in the opinion of the Court.

     Paredes, Poblador, Cruz & Nazareno for petitioner.
     Delfin N. Mercader for respondents.

BAUTISTA ANGELO, J.:

On January 27, 1955, the Democratic Labor Association filed complaint against the
San Miguel Brewery, Inc. embodying 12 demands for the betterment of the
conditions of employment of its members. The company filed its answer to the
complaint specifically denying its material averments and answering the demands
point by point. The company asked for the dismissal of the complaint.
11
At the hearing held sometime in September, 1955, the union manifested its desire to
confine its claim to its demands for overtime, night-shift differential pay, and
attorney's fees, although it was allowed to present evidence on service rendered
during Sundays and holidays, or on its claim for additional separation pay and sick
and vacation leave compensation.1äwphï1.ñët
After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who
was commissioned to receive the evidence, rendered decision expressing his
disposition with regard to the points embodied in the complaint on which evidence
was presented. Specifically, the disposition insofar as those points covered by this
petition for review are concerned, is as follows:
1. With regard to overtime compensation, Judge Bautista held that the
provisions of the Eight-Hour Labor Law apply to the employees concerned
for those working in the field or engaged in the sale of the company's
products outside its premises and consequently they should be paid the extra
compensation accorded them by said law in addition to the monthly salary
and commission earned by them, regardless of the meal allowance given to
employees who work up to late at night.
2. As to employees who work at night, Judge Bautista decreed that they be
paid their corresponding salary differentials for work done at night prior to
January 1, 1949 with the present qualification: 25% on the basis of their
salary to those who work from 6:00 to 12:00 p.m., and 75% to those who
work from 12:01 to 6:00 in the morning.
3. With regard to work done during Sundays and holidays, Judge Bautista
also decreed that the employees concerned be paid an additional
compensation of 25% as provided for in Commonwealth Act No. 444 even
if they had been paid a compensation on monthly salary basis.
The demands for the application of the Minimum Wage Law to workers paid on
"pakiao" basis, payment of accumulated vacation and sick leave and attorney's fees,
as well as the award of additional separation pay, were either dismissed, denied, or
set aside.
Its motion for reconsideration having been denied by the industrial court en banc,
which affirmed the decision of the court a quo with few exceptions, the San Miguel
Brewery, Inc. interposed the present petition for review.
Anent the finding of the court a quo, as affirmed by the Court of Industrial Relations,
to the effect that outside or field sales personnel are entitled to the benefits of the
Eight-Hour Labor Law, the pertinent facts are as follows:
After the morning roll call, the employees leave the plant of the company to go on
their respective sales routes either at 7:00 a.m. for soft drinks trucks, or 8:00 a.m. for
beer trucks. They do not have a daily time record. The company never require them
to start their work as outside sales personnel earlier than the above schedule.
The sales routes are so planned that they can be completed within 8 hours at most, or
that the employees could make their sales on their routes within such number of
hours variable in the sense that sometimes they can be completed in less than 8
hours, sometimes 6 to 7 hours, or more. The moment these outside or field
employees leave the plant and while in their sales routes they are on their own, and
often times when the sales are completed, or when making short trip deliveries only,
they go back to the plant, load again, and make another round of sales. These
employees receive monthly salaries and sales commissions in variable amounts. The
amount of compensation they receive is uncertain depending upon their individual
efforts or industry. Besides the monthly salary, they are paid sales commission that
range from P30, P40, sometimes P60, P70, to sometimes P90, P100 and P109 a
month, at the rate of P0.01 to P0.01-½ per case.
It is contended that since the employees concerned are paid a commission on the
sales they make outside of the required 8 hours besides the fixed salary that is paid to
them, the Court of Industrial Relations erred in ordering that they be paid an
overtime compensation as required by the Eight-Hour Labor Law for the reason that
the commission they are paid already takes the place of such overtime compensation.
Indeed, it is claimed, overtime compensation is an additional pay for work or
services rendered in excess of 8 hours a day by an employee, and if the employee is
already given extra compensation for labor performed in excess of 8 hours a day, he
is not covered by the law. His situation, the company contends, can be likened to an
employee who is paid on piece-work, "pakiao", or commission basis, which is
expressly excluded from the operation of the Eight-Hour Labor Law.1
We are in accord with this view, for in our opinion the Eight-Hour Labor Law only
has application where an employee or laborer is paid on a monthly or daily basis, or
is paid a monthly or daily compensation, in which case, if he is made to work beyond
the requisite period of 8 hours, he should be paid the additional compensation
prescribed by law. This law has no application when the employee or laborer is paid
on a piece-work, "pakiao", or commission basis, regardless of the time employed.
The philosophy behind this exemption is that his earnings in the form of commission
based on the gross receipts of the day. His participation depends upon his industry so
that the more hours he employs in the work the greater are his gross returns and the
higher his commission. This philosophy is better explained in Jewel Tea Co. v.
Williams, C.C.A. Okla., 118 F. 2d 202, as follows:
The reasons for excluding an outside salesman are fairly apparent. Such
salesman, to a greater extent, works individually. There are no restrictions
12
 respecting the time he shall work and he can earn as much or as little, within
the range of his ability, as his ambition dictates. In lieu of overtime he
ordinarily receives commissions as extra compensation. He works away
from his employer's place of business, is not subject to the personal
supervision of his employer, and his employer has no way of knowing the
number of hours he works per day.
True it is that the employees concerned are paid a fixed salary for their month of
service, such as Benjamin Sevilla, a salesman, P215; Mariano Ruedas, a truck driver,
P155; Alberto Alpaza and Alejandro Empleo, truck helpers, P125 each, and
sometimes they work in excess of the required 8-hour period of work, but for their
extra work they are paid a commission which is in lieu of the extra compensation to
which they are entitled. The record shows that these employees during the period of
their employment were paid sales commission ranging from P30, P40, sometimes
P60, P70, to sometimes P90, P100 and P109 a month depending on the volume of
their sales and their rate of commission per case. And so, insofar is the extra work
they perform, they can be considered as employees paid on piece work, "pakiao", or
commission basis. The Department of Labor, called upon to implement, the Eight-
Hour Labor Law, is of this opinion when on December 9, 1957 it made the ruling on
a query submitted to it, thru the Director of the Bureau of Labor Standards, to the
effect that field sales personnel receiving regular monthly salaries, plus commission,
are not subject to the Eight-Hour Labor Law. Thus, on this point, said official stated:
. . . Moreover, when a fieldman receives a regular monthly salary plus
commission on percentage basis of his sales, it is also the established policy
of the Office to consider his commission as payment for the extra time he
renders in excess of eight hours, thereby classifying him as if he were on
piecework basis, and therefore, technically speaking, he is not subject to the
Eight-Hour Labor Law.
We are, therefore, of the opinion that the industrial court erred in holding that the
Eight-Hour Labor Law applies to the employees composing the outside service force
and in ordering that they be paid the corresponding additional compensation.
With regard to the claim for night salary differentials, the industrial court found that
claimants Magno Johnson and Jose Sanchez worked with the respondent company
during the period specified by them in their testimony and that watchmen Zoilo
Illiga, Inocentes Prescillas and Daniel Cayuca rendered night duties once every three
weeks continuously during the period of the employment and that they were never
given any additional compensation aside from their monthly regular salaries. The
court found that the company started paying night differentials only in January, 1949
but never before that time. And so it ordered that the employees concerned be paid
25% additional compensation for those who worked from 6:00 to 12:00 p.m. and
75% additional compensation for those who worked from 12:01 to 6: 00 in the
morning. It is now contended that this ruling is erroneous because an award for night
shift differentials cannot be given retroactive effect but can only be entertained from
the date of demand which was on January 27, 1953, citing in support thereof our
ruling in Earnshaws Docks & Honolulu Iron Works v. The Court of Industrial
Relations, et al., L-8896, January 25, 1957.
This ruling, however, has no application here for it appears that before the filing of
the petition concerning this claim a similar one had already been filed long ago
which had been the subject of negotiations between the union and the company
which culminated in a strike in 1952. Unfortunately, however, the strike fizzled out
and the strikers were ordered to return to work with the understanding that the claim
for night salary differentials should be settled in court. It is perhaps for this reason
that the court a quo granted this claim in spite of the objection of the company to the
contrary.
The remaining point to be determined refers to the claim for pay for Sundays and
holidays for service performed by some claimants who were watchmen or security
guards. It is contended that these employees are not entitled to extra pay for work
done during these days because they are paid on a monthly basis and are given one
day off which may take the place of the work they may perform either on Sunday or
any holiday.
We disagree with this claim because it runs counter to law. Section 4 of
Commonwealth Act No. 444 expressly provides that no person, firm or corporation
may compel an employee or laborer to work during Sundays and legal holidays
unless he is paid an additional sum of 25% of his regular compensation.
This proviso is mandatory, regardless of the nature of compensation. The only
exception is with regard to public utilities who perform some public service.
WHEREFORE, the decision of the industrial court is hereby modified as follows: the
award with regard to extra work performed by those employed in the outside or field
sales force is set aside. The rest of the decision insofar as work performed on
Sundays and holidays covering watchmen and security guards, as well as the award
for night salary differentials, is affirmed. No costs.
13

G.R. No. 156367. May 16, 2005.*
AUTO BUS TRANSPORT SYSTEMS, INC., petitioner, vs.ANTONIO
BAUTISTA, respondent.
Labor Law; Service Incentive Leave; Field Personnel; Words and
Phrases; The phrase “other employees whose performance is unsupervised by the
employer” in Section 1(D), Rule V, Book III of the Implementing Rules and
Regulations of the Labor Code must not be understood as a separate classification of
employees to which service incentive leave shall not be granted—rather, it serves as
an amplification of the interpretation of the definition of field personnel under the
Labor Code as those “whose actual hours of work in the field cannot be determined
with reasonable certainty; Employees engaged on task or contract basis or paid on
purely commission basis are not automatically exempted from the grant of service
incentive leave, unless, they fall under the classification of field personnel.”—A
careful perusal of said provisions of law will result in the conclusion that the grant of
service incentive leave has been delimited by the Implementing Rules and
Regulations of the Labor Code to apply only to those employees not explicitly
excluded by Section 1 of Rule V. According to the Implementing Rules, Service
Incentive Leave shall not apply to employees classified as “field personnel.” The
phrase “other employees whose performance is unsupervised by the employer” must
not be understood as a separate classification of employees to which service
incentive leave shall not be granted. Rather, it serves as an amplification of the
interpretation of the definition of field personnel under the Labor Code as those
“whose actual hours of work in the field cannot be determined with reasonable
certainty.” The same is true with respect to the phrase “those who are engaged on
task or contract basis, purely commission basis.” Said phrase should be related with
“field personnel,” applying the rule on ejusdem generis that general and unlimited
terms are restrained and limited by the particular terms that they follow. Hence,
employees engaged on task or contract basis or paid on purely commission basis are
not automatically exempted from the grant of service incentive leave, unless, they
fall under the classification of field personnel.
_______________
*
 SECOND DIVISION.
579
VOL. 458, MAY 16, 2005  579  Same; Same; Same; Same; Bus Drivers and Conductors; A bus driver-
Auto Bus Transport Systems, Inc. vs. Bautista
Same; Same; Same; Same; What must be ascertained in order to resolve the
issue of propriety of the grant of service incentive leave to a bus driver-conductor is
whether or not he is a field personnel; According to the Labor Code, “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.—Petitioner’s contention that respondent is not entitled to the grant of
service incentive leave just because he was paid on purely commission basis is
misplaced. What must be ascertained in order to resolve the issue of propriety of the
grant of service incentive leave to respondent is whether or not he is a field
personnel. According to Article 82 of the Labor Code, “field personnel” shall refer to
non-agricultural 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. This definition is
further elaborated in the Bureau of Working Conditions (BWC), Advisory Opinion to
Philippine Technical-Clerical Commercial Employees Association which states that:
As a general rule, [field personnel] are those whose performance of their job/service
is not supervised by the employer or his representative, the workplace being away
from the principal office and whose hours and days of work cannot be determined
with reasonable certainty; hence, they are paid specific amount for rendering specific
service or performing specific work. If required to be at specific places at specific
times, employees including drivers cannot be said to be field personnel despite the
fact that they are performing work away from the principal office of the employee.
Same; Same; Same; Same; 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
—in order to conclude 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.—At this point, it is necessary to stress that 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. As discussed above, field personnel are those who
regularly perform their duties away from the principal 
580
580  SUPREME COURT REPORTS ANNOTATED 
Auto Bus Transport Systems, Inc. vs. Bautista
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 conclude 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.
conductor, not being a field personnel but a regular employee who performs tasks
usually necessary and desirable to the usual trade of the company’s business, is
entitled to the grant of service incentive leave.—As observed by the Labor Arbiter
14
and concurred in by the Court of Appeals: It is of judicial notice that along the routes
that are plied by these bus companies, there are its inspectors assigned at strategic
places who board the bus and inspect the passengers, the punched tickets, and the
conductor’s reports. There is also the mandatory once-a-week car barn or shop day,
where the bus is regularly checked as to its mechanical, electrical, and hydraulic
aspects, whether or not there are problems thereon as reported by the driver and/or
conductor. They too, must be at specific place as [sic] specified time, as they
generally observe prompt departure and arrival from their point of origin to their
point of destination. In each and every depot, there is always the Dispatcher whose
function is precisely to see to it that the bus and its crew leave the premises at
specific times and arrive at the estimated proper time. These, are present in the case
at bar. The driver, the complainant herein, was therefore under constant supervision
while in the performance of this work. He cannot be considered a field personnel.
We agree in the above disquisition. Therefore, as correctly concluded by the
appellate court, respondent is not a field personnel but a regular employee who
performs tasks usually necessary and desirable to the usual trade of petitioner’s
business. Accordingly, respondent is entitled to the grant of service incentive leave.
Same; Same; Prescription; In the computation of the three-year prescriptive
period, a determination must be made as to the period when the act constituting a
violation of the workers’ right to the benefits being claimed was committed. —It is
settled jurisprudence that a cause of action has three elements, to wit, (1) a right in
favor of the plaintiff by whatever means and under whatever law it arises or is  general recommends, is to unduly restrict such right.
581
VOL. 458, MAY 16, 2005  581  becomes entitled to the commutation of his service incentive leave, but from the time
Auto Bus Transport Systems, Inc. vs. Bautista
created; (2) an obligation on the part of the named defendant to respect or not
to violate such right; and (3) an act or omission on the part of such defendant
violative of the right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff. To properly construe Article 291 of the Labor Code, it is
essential to ascertain the time when the third element of a cause of action transpired.
Stated differently, in the computation of the three-year prescriptive period, a
determination must be made as to the period when the act constituting a violation of
the workers’ right to the benefits being claimed was committed. For if the cause of
action accrued more than three (3) years before the filing of the money claim, said
cause of action has already prescribed in accordance with Article 291.
Same; Same; Same; It is essential to recognize that the service incentive leave
is a curious animal in relation to other benefits granted by law to every employee; If
the employee entitled to service incentive leave does not use or commute the same,
he is entitled upon his resignation or separation from work to the commutation of his
accrued service incentive leave.—It is essential at this point, however, to recognize
that the service incentive leave is a curious animal in relation to other benefits
granted by the law to every employee. In the case of service incentive leave, the
employee may choose to either use his leave credits or commute it to its monetary
equivalent if not exhausted at the end of the year. Furthermore, if the employee
entitled to service incentive leave does not use or commute the same, he is entitled
upon his resignation or separation from work to the commutation of his accrued
service incentive leave. As enunciated by the Court in Fernandez v. NLRC: The clear
policy of the Labor Code is to grant service incentive leave pay to workers in all
establishments, subject to a few exceptions. Section 2, Rule V, Book III of the
Implementing Rules and Regulations provides that “[e]very employee who has
rendered at least one year of service shall be entitled to a yearly service incentive
leave of five days with pay.” Service incentive leave is a right which accrues to every
employee who has served “within 12 months, whether continuous or broken
reckoned from the date the employee started working, including authorized absences
and paid regular holidays unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contracts, is less than 12
months, in which case said period shall be considered as one year.” It is
also “commutable to its money equiva-
582
582  SUPREME COURT REPORTS ANNOTATED 
Auto Bus Transport Systems, Inc. vs. Bautista
lent if not used or exhausted at the end of the year.” In other words, an
employee who has served for one year is entitled to it. He may use it as leave days or
he may collect its monetary value. To limit the award to three years, as the solicitor
Same; Same; Same; With regard to service incentive leave, the three-year
prescriptive period commences, not at the end of the year when the employee
when the employer refuses to pay its monetary equivalent after demand or
commutation or upon termination of the employee’s services, as the case may be.—
Correspondingly, it can be conscientiously deduced that the cause of action of an
entitled employee to claim his service incentive leave pay accrues from the moment
the employer refuses to remunerate its monetary equivalent if the employee did not
make use of said leave credits but instead chose to avail of its commutation.
Accordingly, if the employee wishes to accumulate his leave credits and opts for its
commutation upon his resignation or separation from employment, his cause of
action to claim the whole amount of his accumulated service incentive leave shall
arise when the employer fails to pay such amount at the time of his resignation or
separation from employment. Applying Article 291 of the Labor Code in light of this
peculiarity of the service incentive leave, we can conclude that the three (3)-year
prescriptive period commences, not at the end of the year when the employee
becomes entitled to the commutation of his service incentive leave, but from the time
when the employer refuses to pay its monetary equivalent after demand of
commutation or upon termination of the employee’s services, as the case may be.
Same; Same; Same; Social Justice; The Court’s construal of Art. 291 of the
Labor Code, vis-à-vis the rules on service incentive leave, is in keeping with the
rudimentary principle that in the implementation and interpretation of the provisions
of the Labor Code and its implementing regulations, the workingman’s welfare
15
should be the primordial and paramount consideration.—The above construal of
Art. 291, vis-à-vis the rules on service incentive leave, is in keeping with the
rudimentary principle that in the implementation and interpretation of the provisions
of the Labor Code and its implementing regulations, the workingman’s welfare
should be the primordial and paramount consideration. The policy is to extend the
applicabil-
583
VOL. 458, MAY 16, 2005  583  Thus, on 02 February 2000, respondent instituted a Complaint for Illegal Dismissal
Auto Bus Transport Systems, Inc. vs. Bautista
ity of the decree to a greater number of employees who can avail of the
benefits under the law, which is in consonance with the avowed policy of the State to
give maximum aid and protection to labor.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
     Edmundo A. Cruz for petitioner.
     Joseph D. Sagampud, Jr. for private respondent.
CHICO-NAZARIO, J.:
1
Before Us is a Petition for Review on Certiorari assailing the Decision  and
Resolution2 of the Court of Appeals affirming the Decision3 of the National Labor
Relations Commission (NLRC). The NLRC ruling modified the Decision of the
Labor Arbiter (finding respondent entitled to the award of 13th month pay and service
incentive leave pay) by deleting the award of 13th month pay to respondent.
THE FACTS
Since 24 May 1995, respondent Antonio Bautista has been employed by petitioner
Auto Bus Transport Systems, Inc. (Autobus), as driver-conductor with travel routes
Manila-Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and Manila-Tabuk
via Baguio. Respondent was paid on commission basis, seven percent (7%) of the
total gross income per travel, on a twice a month basis.
On 03 January 2000, while respondent was driving Autobus No. 114 along Sta. Fe,
Nueva Vizcaya, the bus he was driving accidentally bumped the rear portion of
Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without
giving any warning.
Respondent averred that the accident happened because he was compelled by the
management to go back to Roxas, Isabela, although he had not slept for almost
twenty-four (24) hours, as he had just arrived in Manila from Roxas, Isabela.
Respondent further alleged that he was not allowed to work until he fully paid the
amount of P75,551.50, representing thirty percent (30%) of the cost of repair of the
damaged buses and that despite respondent’s pleas for reconsideration, the same was
ignored by management. After a month, management sent him a letter of
termination.
with Money Claims for nonpayment of 13th month pay and service incentive leave
pay against Autobus.
Petitioner, on the other hand, maintained that respondent’s employment was replete
with offenses involving reckless imprudence, gross negligence, and dishonesty. To
support its claim, petitioner presented copies of letters, memos, irregularity reports,
and warrants of arrest pertaining to several incidents wherein respondent was
involved.
Furthermore, petitioner avers that in the exercise of its management prerogative,
respondent’s employment was terminated only after the latter was provided with an
opportunity to explain his side regarding the accident on 03 January 2000.
On 29 September 2000, based on the pleadings and supporting evidence presented by
the parties, Labor Arbiter Monroe C. Tabingan promulgated a Decision,4 the
dispositive portion of which reads:
WHEREFORE, all premises considered, it is hereby found that the
complaint for Illegal Dismissal has no leg to stand on. It is hereby ordered
DISMISSED, as it is hereby DISMISSED.
However, still based on the above-discussed premises, the respondent must
pay to the complainant the following:
a. his 13th month pay from the date of his hiring to the date of his
dismissal, presently computed at P78,117.87;
b. his service incentive leave pay for all the years he had been in
service with the respondent, presently computed at P13,788.05.
All other claims of both complainant and respondent are hereby dismissed
for lack of merit.5
16
Not satisfied with the decision of the Labor Arbiter, petitioner appealed the decision
to the NLRC which rendered its decision on 28 September 2001, the decretal portion
of which reads:
[T]he Rules and Regulations Implementing Presidential Decree No. 851,
particularly Sec. 3 provides:
"Section 3. Employers covered. – The Decree shall apply to all
employers except to:
xxx       xxx       xxx
e) employers of those who are paid on purely commission,
boundary, or task basis, performing a specific work, irrespective of
the time consumed in the performance thereof. xxx."
Records show that complainant, in his position paper, admitted that he was
paid on a commission basis.
In view of the foregoing, we deem it just and equitable to modify the
assailed Decision by deleting the award of 13th month pay to the
complainant.
…
WHEREFORE, the Decision dated 29 September 2000 is MODIFIED by
deleting the award of 13th month pay. The other findings are AFFIRMED.6
In other words, the award of service incentive leave pay was maintained. Petitioner
thus sought a reconsideration of this aspect, which was subsequently denied in a
Resolution by the NLRC dated 31 October 2001.
Displeased with only the partial grant of its appeal to the NLRC, petitioner sought
the review of said decision with the Court of Appeals which was subsequently
denied by the appellate court in a Decision dated 06 May 2002, the dispositive
portion of which reads:
WHEREFORE, premises considered, the Petition is DISMISSED for lack
of merit; and the assailed Decision of respondent Commission in NLRC
NCR CA No. 026584-2000 is hereby AFFIRMED in toto. No costs.7
Hence, the instant petition.
ISSUES
1. Whether or not respondent is entitled to service incentive leave;
2. Whether or not the three (3)-year prescriptive period provided under Article 291 of
the Labor Code, as amended, is applicable to respondent’s claim of service incentive
leave pay. 
RULING OF THE COURT
The disposition of the first issue revolves around the proper interpretation of Article
95 of the Labor Code vis-à-visSection 1(D), Rule V, Book III of the Implementing
Rules and Regulations of the Labor Code which provides:
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE
(a) Every employee who has rendered at least one year of service
shall be entitled to a yearly service incentive leave of five days
with pay.
Book III, Rule V: SERVICE INCENTIVE LEAVE
SECTION 1. Coverage. – This rule shall apply to all employees except:
…
(d) Field personnel and other employees whose performance is
unsupervised by the employer including those who are engaged on
task or contract basis, purely commission basis, or those who are
paid in a fixed amount for performing work irrespective of the time
consumed in the performance thereof; . . .
A careful perusal of said provisions of law will result in the conclusion that the grant
of service incentive leave has been delimited by the Implementing Rules and
Regulations of the Labor Code to apply only to those employees not explicitly
excluded by Section 1 of Rule V. According to the Implementing Rules, Service
Incentive Leave shall not apply to employees classified as "field personnel." The
phrase "other employees whose performance is unsupervised by the employer" must
not be understood as a separate classification of employees to which service
incentive leave shall not be granted. Rather, it serves as an amplification of the
interpretation of the definition of field personnel under the Labor Code as those
"whose actual hours of work in the field cannot be determined with reasonable
certainty."8
17
The same is true with respect to the phrase "those who are engaged on task or
contract basis, purely commission basis." Said phrase should be related with "field
personnel," applying the rule on ejusdem generis that general and unlimited terms
are restrained and limited by the particular terms that they follow.9 Hence, employees
engaged on task or contract basis or paid on purely commission basis are not
automatically exempted from the grant of service incentive leave, unless, they fall
under the classification of field personnel.
Therefore, petitioner’s contention that respondent is not entitled to the grant of
service incentive leave just because he was paid on purely commission basis is
misplaced. What must be ascertained in order to resolve the issue of propriety of the
grant of service incentive leave to respondent is whether or not he is a field
personnel.
According to Article 82 of the Labor Code, "field personnel" shall refer to non-
agricultural 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. This definition is further
elaborated in the Bureau of Working Conditions (BWC), Advisory Opinion to
Philippine Technical-Clerical Commercial Employees Association10 which states
that:
As a general rule, [field personnel] are those whose performance of their
job/service is not supervised by the employer or his representative, the
workplace being away from the principal office and whose hours and days
of work cannot be determined with reasonable certainty; hence, they are
paid specific amount for rendering specific service or performing specific
work. If required to be at specific places at specific times, employees
including drivers cannot be said to be field personnel despite the fact that
they are performing work away from the principal office of the
employee. [Emphasis ours]
To this discussion by the BWC, the petitioner differs and postulates that under said
advisory opinion, no employee would ever be considered a field personnel because
every employer, in one way or another, exercises control over his employees.
Petitioner further argues that the only criterion that should be considered is the nature
of work of the employee in that, if the employee’s job requires that he works away
from the principal office like that of a messenger or a bus driver, then he is inevitably
a field personnel.
We are not persuaded. At this point, it is necessary to stress that 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. As discussed above, 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 conclude 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 observed by the Labor Arbiter and concurred in by the Court of Appeals:
It is of judicial notice that along the routes that are plied by these bus
companies, there are its inspectors assigned at strategic places who board
the bus and inspect the passengers, the punched tickets, and the conductor’s
reports. There is also the mandatory once-a-week car barn or shop day,
where the bus is regularly checked as to its mechanical, electrical, and
hydraulic aspects, whether or not there are problems thereon as reported by
the driver and/or conductor. They too, must be at specific place as [sic]
specified time, as they generally observe prompt departure and arrival from
their point of origin to their point of destination. In each and every depot,
there is always the Dispatcher whose function is precisely to see to it that
the bus and its crew leave the premises at specific times and arrive at the
estimated proper time. These, are present in the case at bar. The driver, the
complainant herein, was therefore under constant supervision while in the
performance of this work. He cannot be considered a field personnel.11
We agree in the above disquisition. Therefore, as correctly concluded by the
appellate court, respondent is not a field personnel but a regular employee who
performs tasks usually necessary and desirable to the usual trade of petitioner’s
business. Accordingly, respondent is entitled to the grant of service incentive leave.
The question now that must be addressed is up to what amount of service incentive
leave pay respondent is entitled to.
The response to this query inevitably leads us to the correlative issue of whether or
not the three (3)-year prescriptive period under Article 291 of the Labor Code is
applicable to respondent’s claim of service incentive leave pay.
Article 291 of the Labor Code states that all money claims arising from employer-
employee relationship shall be filed within three (3) years from the time the cause of
action accrued; otherwise, they shall be forever barred.
In the application of this section of the Labor Code, the pivotal question to be
answered is when does the cause of action for money claims accrue in order to
determine the reckoning date of the three-year prescriptive period.
18
It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right
in favor of the plaintiff by whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named defendant to respect or not to
violate such right; and (3) an act or omission on the part of such defendant violative
of the right of the plaintiff or constituting a breach of the obligation of the defendant
to the plaintiff.12
To properly construe Article 291 of the Labor Code, it is essential to ascertain the
time when the third element of a cause of action transpired. Stated differently, in the
computation of the three-year prescriptive period, a determination must be made as
to the period when the act constituting a violation of the workers’ right to the
benefits being claimed was committed. For if the cause of action accrued more than
three (3) years before the filing of the money claim, said cause of action has already
prescribed in accordance with Article 291.13
Consequently, in cases of nonpayment of allowances and other monetary benefits, if
it is established that the benefits being claimed have been withheld from the
employee for a period longer than three (3) 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 (3) years before the filing of the
complaint.14
It is essential at this point, however, to recognize that the service incentive leave is a
curious animal in relation to other benefits granted by the law to every employee. In
the case of service incentive leave, the employee may choose to either use his leave
credits or commute it to its monetary equivalent if not exhausted at the end of the
year.15 Furthermore, if the employee entitled to service incentive leave does not use
or commute the same, he is entitled upon his resignation or separation from work to
the commutation of his accrued service incentive leave. As enunciated by the Court
in Fernandez v. NLRC:16
The clear policy of the Labor Code is to grant service incentive leave pay to
workers in all establishments, subject to a few exceptions. Section 2, Rule
V, Book III of the Implementing Rules and Regulations provides that
"[e]very employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay." Service
incentive leave is a right which accrues to every employee who has served
"within 12 months, whether continuous or broken reckoned from the date
the employee started working, including authorized absences and paid
regular holidays unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contracts, is less than
12 months, in which case said period shall be considered as one year." It is
also "commutable to its money equivalent if not used or exhausted at the
end of the year." In other words, an employee who has served for one year
is entitled to it. He may use it as leave days or he may collect its monetary
value. To limit the award to three years, as the solicitor general
recommends, is to unduly restrict such right.17 [Italics supplied]
Correspondingly, it can be conscientiously deduced that the cause of action of an
entitled employee to claim his service incentive leave pay accrues from the moment
the employer refuses to remunerate its monetary equivalent if the employee did not
make use of said leave credits but instead chose to avail of its commutation.
Accordingly, if the employee wishes to accumulate his leave credits and opts for its
commutation upon his resignation or separation from employment, his cause of
action to claim the whole amount of his accumulated service incentive leave shall
arise when the employer fails to pay such amount at the time of his resignation or
separation from employment.
Applying Article 291 of the Labor Code in light of this peculiarity of the service
incentive leave, we can conclude that the three (3)-year prescriptive period
commences, not at the end of the year when the employee becomes entitled to the
commutation of his service incentive leave, but from the time when the employer
refuses to pay its monetary equivalent after demand of commutation or upon
termination of the employee’s services, as the case may be.
The above construal of Art. 291, vis-à-vis the rules on service incentive leave, is in
keeping with the rudimentary principle that in the implementation and interpretation
of the provisions of the Labor Code and its implementing regulations, the
workingman’s welfare should be the primordial and paramount consideration.18 The
policy is to extend the applicability of the decree to a greater number of employees
who can avail of the benefits under the law, which is in consonance with the avowed
policy of the State to give maximum aid and protection to labor.19
In the case at bar, respondent had not made use of his service incentive leave nor
demanded for its commutation until his employment was terminated by petitioner.
Neither did petitioner compensate his accumulated service incentive leave pay at the
time of his dismissal. It was only upon his filing of a complaint for illegal dismissal,
one month from the time of his dismissal, that respondent demanded from his former
employer commutation of his accumulated leave credits. His cause of action to claim
the payment of his accumulated service incentive leave thus accrued from the time
when his employer dismissed him and failed to pay his accumulated leave credits. 
Therefore, the prescriptive period with respect to his claim for service incentive
leave pay only commenced from the time the employer failed to compensate his
accumulated service incentive leave pay at the time of his dismissal. Since
respondent had filed his money claim after only one month from the time of his
19
dismissal, necessarily, his money claim was filed within the prescriptive period
provided for by Article 291 of the Labor Code.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The
assailed Decision of the Court of Appeals in CA-G.R. SP. No. 68395 is hereby
AFFIRMED. No Costs.
SO ORDERED.
G.R. No. 112574. October 8, 1998.*
MERCIDAR FISHING CORPORATION represented by its President
DOMINGO B. NAVAL, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and FERMIN AGAO, JR., respondents.
Labor Law; Service Incentive Leave Pay; Words and Phrases;Phrase “Whose
Actual Hours of Work in the Field Cannot be Determined with Reasonable
Certainty,” Explained.—In the case of Union of Filipro Employees (UFE) v. Vicar,
this Court explained the meaning of the phrase “whose actual hours of work in the
field cannot be determined with reasonable certainty” in Art. 82 of the Labor Code,
as follows: Moreover, the requirement that “actual hours of work in the field cannot
be determined with reasonable certainty” must be read in conjunction with Rule IV,
Book III of the Implementing Rules which provides: Rule IV Holidays with Pay.
Section 1. Coverage—This rule shall apply to all employees except: . . . . (e) Field
personnel and other employees whose time and performance is unsupervised by the
employer x x x (Italics supplied) While contending that such rule added another
element not found in the law (Rollo, p. 13), the petitioner nevertheless attempted to
show that its affected members are not covered by the abovementioned rule. The
petitioner asserts that the company’s sales personnel are strictly supervised as shown
by the SOD (Supervisor of the Day) schedule and the company circular dated March
15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55). Contrary to the contention of the
petitioner, the Court finds that the aforementioned rule did not add another element
to the Labor Code definition of field personnel. The clause  No. 851, and non-payment of five days service incentive leave for 1990. Private
________________
*
 SECOND DIVISION.
441
VOL. 297, OCTOBER 8, 1998  441 
Mercidar Fishing Corporation vs. NLRC
“whose time and performance is unsupervised by the employer” did not
amplify but merely interpreted and expounded the clause “whose actual hours of
work in the field cannot be determined with reasonable certainty.” The former clause
is still within the scope and purview of Article 82 which defines field personnel.
Hence, in deciding whether or not an employee’s actual working hours in the field
can be determined with reasonable certainty, query must be made as to whether or
not such employee’s time and performance is constantly supervised by the employer.
Same; Same; Same; Fishermen; Although fishermen perform non-
agricultural work away from their employer’s business offices, the fact remains that
throughout the duration of their work they are under the effective control and
supervision of the employer through the vessel’s patron or master.—In contrast, in
the case at bar, during the entire course of their fishing voyage, fishermen employed
by petitioner have no choice but to remain on board its vessel. Although they
perform non-agricultural work away from petitioner’s business offices, the fact
remains that throughout the duration of their work they are under the effective
control and supervision of petitioner through the vessel’s patron or master as the
NLRC correctly held.
Same; Administrative Law; Evidence; It is trite to say that the factual findings
of quasi-judicial bodies are generally binding as long as they are supported
substantially by evidence in the record of the case.—It is trite to say that the factual
findings of quasi-judicial bodies are generally binding as long as they are supported
substantially by evidence in the record of the case. This is especially so where, as
here, the agency and its subordinate who heard the case in the first instance are in
full agreement as to the facts.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
MENDOZA, J.:
This is a petition for certiorari to set aside the decision, dated August 30, 1993, of
the National Labor Relations Commission dismissing the appeal of petitioner
Mercidar Fishing Corporation from the decision of the Labor Arbiter in NLRC NCR
Case No. 09-05084-90, as well as the resolution dated October 25, 1993, of the
NLRC denying reconsideration.
This case originated from a complaint filed on September 20, 1990 by private
respondent Fermin Agao, Jr. against petitioner for illegal dismissal, violation of P.D.
respondent had been employed as a "bodegero" or ship's quartermaster on February
12, 1988. He complained that he had been constructively dismissed by petitioner
when the latter refused him assignments aboard its boats after he had reported to
work on May 28, 1990.1
20
Private respondent alleged that he had been sick and thus allowed to go on leave
without pay for one month from April 28, 1990 but that when he reported to work at
the end of such period with a health clearance, he was told to come back another
time as he could not be reinstated immediately. Thereafter, petitioner refused to give
him work. For this reason, private respondent asked for a certificate of employment
from petitioner on September 6, 1990. However, when he came back for the
certificate on September 10, petitioner refused to issue the certificate unless he
submitted his resignation. Since private respondent refused to submit such letter
unless he was given separation pay, petitioner prevented him from entering the
premises.2
Petitioner, on the other hand, alleged that it was private respondent who actually
abandoned his work. It claimed that the latter failed to report for work after his leave
had expired and was, in fact, absent without leave for three months until August 28,
1998. Petitioner further claims that, nonetheless, it assigned private respondent to
another vessel, but the latter was left behind on September 1, 1990. Thereafter,
private respondent asked for a certificate of employment on September 6 on the
pretext that he was applying to another fishing company. On September 10, 1990, he
refused to get the certificate and resign unless he was given separation pay.3
On February 18, 1992, Labor Arbiter Arthur L. Amansec rendered a decision
disposing of the case as follows:
ACCORDINGLY, respondents are ordered to reinstate
complainant with backwages, pay him his 13th month pay and
incentive leave pay for 1990.
All other claims are dismissed.
SO ORDERED.
Petitioner appealed to the NLRC which, on August 30, 1993, dismissed the appeal
for lack of merit. The NLRC dismissed petitioner's claim that it cannot be held liable
for service incentive leave pay by fishermen in its employ as the latter supposedly
are "field personnel" and thus not entitled to such pay under the Labor Code.4
The NLRC likewise denied petitioner's motion for reconsideration of its decision in
its order dated October 25, 1993.
Hence, this petition. Petitioner contends:
I
THE RESPONDENT COMMISSION PALPABLY ERRED IN
RULING AND SUSTAINING THE VIEW THAT FISHING
CREW MEMBERS. LIKE FERMIN AGAO, JR., CANNOT BE
CLASSIFIED AS FIELD PERSONNEL UNDER ARTICLE 82
OF THE LABOR CODE.
II
THE RESPONDENT COMMISSION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN IT UPHELD THE FINDINGS OF THE
LABOR ARBITER THAT HEREIN PETITIONER HAD
CONSTRUCTIVELY DISMISSED FERMIN AGAO, JR., FROM
EMPLOYMENT.
The petition has no merit.
Art. 82 of the Labor Code provides:
Art. 82. Coverage. — The provisions of this Title [Working
Conditions and Rest Periods] shall apply to employees in all
establishments and undertakings whether for profit or not, but not
to government 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 results as determined by the Secretary of Labor in
appropriate regulations.
x x x           x x x          x x x
"Field personnel" shall refer to non-agricultural 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.
Petitioner argues essentially that since the work of private respondent is performed
away from its principal place of business, it has no way of verifying his actual hours
of work on the vessel. It contends that private respondent and other fishermen in its
employ should be classified as "field personnel" who have no statutory right to
service incentive leave pay.
21
In the case of Union of Pilipro Employees (UFE) v. Vicar, 5 this Court explained the
meaning of the phrase "whose actual hours of work in the field cannot be determined
with reasonable certainty" in Art. 82 of the Labor Code, as follows:
Moreover, the requirement that "actual hours of work in the field
cannot be determined with reasonable certainty" must be read in
conjunction with Rule IV, Book III of the Implementing Rules
which provides:
Rule IV Holidays with Pay
Sec. 1. Coverage — This rule shall apply to all
employees except:
x x x           x x x          x x x
(e) Field personnel and other employees whose
time and performance is unsupervised by the
employer . . . (Emphasis supplied).
While contending that such rule added another element not found
in the law (Rollo, p. 13), the petitioner nevertheless attempted to
show that its affected members are not covered by the
abovementioned rule. The petitioner asserts that the company's
sales personnel are strictly supervised as shown by the SOD
(Supervisor of the Day) schedule and the company circular dated
March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).
Contrary to the contention of the petitioner, the Court finds that the
aforementioned rule did not add another element to the Labor Code
definition of field personnel. The clause "whose time and
performance is unsupervised by the employer" did not amplify but
merely interpreted and expounded the clause "whose actual hours
of work in the field cannot be determined with reasonable
certainty." The former clause is still within the scope and purview
of Article 82 which defines field personnel. Hence, in deciding
whether or not an employee's actual working hours in the field can
be determined with reasonable certainty, query must be made as to
whether or not such employee's time and performance is constantly
supervised by the employer. 6
Accordingly, it was held in the aforementioned case that salesmen of Nestle
Philippines, Inc. were field personnel:
It is undisputed that these sales personnel start their field work at
8:00 a.m. after having reported to the office and come back to the
office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.
The petitioner maintains that the period between 8:00 a.m. to 4:00
or 4:30 p.m. comprises the sales personnel's working hours which
can be determined with reasonable certainty.
The Court does not agree. The law requires that the actual hours of
work in the field be reasonably ascertained. The company has no
way of determining whether or not these sales personnel, even if
they report to the office before 8:00 a.m. prior to field work and
come back at 4:30 p.m., really spend the hours in between in actual
field work.7
In contrast, in the case at bar, during the entire course of their fishing voyage,
fishermen employed by petitioner have no choice but to remain on board its vessel.
Although they perform non-agricultural work away from petitioner's business
offices, the fact remains that throughout the duration of their work they are under the
effective control and supervision of petitioner through the vessel's patron or master
as the NLRC correctly held. 8
Neither did petitioner gravely abuse its discretion in ruling that private respondent
had constructively been dismissed by petitioner. Such factual finding of both the
NLRC and the Labor Arbiter is based not only on the pleadings of the parties but
also on a medical certificate of fitness which, contrary to petitioner's claim private
respondent presented when he reported to work on May 28, 1990.9 As the NLRC
held:
Anent grounds (a) and (b) of the appeal, the respondent, in a
nutshell, would like us to believe that the Arbiter abused his
discretion (or seriously erred in his findings of facts) in giving
credence to the factual version of the complainant. But it is settled
that "(W)hen confronted with conflicting versions of factual
matters," the Labor Arbiter has the "discretion to determine which
party deserves credence on the basis of evidence received."
[Gelmart Industries (Phils.), Inc. vs. Leogardo, 155 SCRA 403,
309, L-70544, November 5, 1987]. And besides, it is settled in this
jurisdiction that "to constitute abandonment of position, there must
be concurrence of the intention to abandon and some overt acts
from which it may be inferred that the employee concerned has no
more interest in working" (Dagupan Bus Co., Inc. vs. NLRC, 191
SCRA 328), and that the filing of the complaint which asked for
reinstatement plus backwages (Record, p. 20) is inconsistent with
22
 respondents' defense of abandonment (Hua Bee Shirt Factory vs.
NLRC, 188 SCRA 586). 10

It is trite to say that the factual findings of quasi-judicial bodies are generally binding
as long as they are supported substantially by evidence in the record of the
case. 11 This is especially so where, as here, the agency and its subordinate who heard
the case in the first instance are in full agreement as to the facts. 12

As regards the labor arbiter's award which was affirmed by respondent NLRC, there
is no reason to apply the rule that reinstatement may not be ordered if, as a result of
the case between the parties, their relation is
strained. 13 Even at this late stage of this dispute, petitioner continues to reiterate its
offer to reinstate private respondent. 14

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

G.R. No. 123938. May 21, 1998.*

LABOR CONGRESS OF THE PHILIPPINES (LCP) for and in behalf of its
members, ANA MARIE OCAMPO, MARY INTAL, ANNABEL CARESO,
MARLENE MELQIADES, IRENE JACINTO, NANCY GARCIA, IMELDA
SARMIENTO, LENITA VIRAY, GINA JACINTO, ROSEMARIE DEL
ROSARIO, CATHERINE ASPURNA, WINNIE PENA, VIVIAN BAA, EMILY
LAGMAN, LILIAN MARFIL, NANCY DERACO, JANET DERACO,
MELODY JACINTO, CAROLYN DIZON, IMELDA MANALOTO, NORY
VIRAY, ELIZA SALAZAR, GIGI MANALOTO, JOSEFINA BASILIO, MARY
ANN MAYATI, ZENAIDA GARCIA, MERLY CANLAS, ERLINDA
MANALANG, ANGELINA QUIAMBAO, LANIE GARCIA, ELVIRA
PIEDRA, LOURDES PANLILIO, LUISA PANLILIO, LERIZA PANLILIO,
ALMA CASTRO, ALDA DAVID, MYRA T. OLALIA, MARIFE PINLAC,
NENITA DE GUZMAN, JULIE GACAD, EVELYN MANALO, NORA PATIO,
JANETH CARREON, ROWENA MENDOZA, ROWENA MANALO, LENY
GARCIA, FELISISIMA PATIO, SUSANA SALOMON, JOYDEE
LANSANGAN, REMEDIOS AGUAS, JEANIE LANSANGAN, ELIZABETH
MERCADO, JOSELYN MANALESE, BERNADETH RALAR, LOLITA
ESPIRITU, AGNES SALAS, VIRGINIA MENDIOLA, GLENDA SALITA,
JANETH RALAR, ERLINDA BASILIO, CORA PATIO, ANTONIA CALMA,

23
AGNES CARESO, GEMMA BONUS, MARITESS OCAMPO, LIBERTY
GELISANGA, JANETH MANARANG, AMALIA DELA CRUZ, EVA
_______________
*
 FIRST DIVISION.
510
510  SUPREME COURT REPORTS ANNOTATED  one month for every year of service, with a fraction of at least six (6) months of
Labor Congress of the Philippines vs. NLRC
CUEVAS, TERESA MANIAGO, ARCELY PEREZ, LOIDA BIE, ROSITA
CANLAS, ANALIZA ESGUERRA, LAILA MANIAGO, JOSIE MANABAT,
ROSARIO DIMATULAC, NYMPA TUAZON, DAIZY TUASON, ERLINDA
NAVARRO, EMILY MANARANG, EMELITA CAYANAN, MERCY
CAYANAN, LUZVIMINDA CAYANAN, ANABEL MANALO, SONIA DIZON,
ERNA CANLAS, MARIAN BENEDICTA, DOLORES DOLETIN, JULIE
DAVID, GRACE VILLANUEVA, VIRGINIA MAGBAG, CORAZON
RILLION, PRECY MANALILI, ELENA RONOZ, IMELDA MENDOZA,
EDNA CANLAS and ANGELA CANLAS, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, EMPIRE FOOD PRODUCTS, its
Proprietor/President & Manager, MR. GONZALO KEHYENG and MRS.
EVELYN KEHYENG, respondents.
Labor Law; Dismissals; Abandonment; Burden of proving the existence of
just cause for dismissing an employee, such as abandonment, rests on the employer.
—It may likewise be stressed that the burden of proving the existence of just cause
for dismissing an employee, such as abandonment, rests on the employer, a burden
private respondents failed to discharge.
Same; Same; Private respondents violated the rights of petitioners to security
of tenure and constitutional right to due process in not even serving them with a
written notice of such termination.—Private respondents, moreover, in considering
petitioners’ employment to have been terminated by abandonment, violated their
rights to security of tenure and constitutional right to due process in not even serving
them with a written notice of such termination. Section 2, Rule XIV, Book V of the
Omnibus Rules Implementing the Labor Code provides: SEC. 2. Notice of Dismissal.
—Any employer who seeks to dismiss a worker shall furnish him a written notice
stating the particular acts or omission constituting the grounds for his dismissal. In
cases of abandonment of work, the notice shall be served at the worker’s last known
address.
Same; Same; Benefits; Petitioners are therefore entitled to reinstatement with
full backwages pursuant to Article 279 of the Labor Code, as amended by R.A. No.
6715.—Petitioners are therefore entitled to reinstatement with full back wages
pursuant to Article  SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
511
VOL. 290, MAY 21, 1998  511       Armando San Antonio for petitioners.
Labor Congress of the Philippines vs. NLRC
279 of the Labor Code, as amended by R.A. No. 6715. Nevertheless, the
records disclose that taking into account the number of employees involved, the
length of time that has lapsed since their dismissal, and the perceptible resentment
and enmity between petitioners and private respondents which necessarily strained
their relationship, reinstatement would be impractical and hardly promotive of the
best interests of the parties. In lieu of reinstatement then, separation pay at the rate of
service considered as one (1) year, is in order.
Same; Same; Same; While petitioners’ mode of compensation was on a “per
piece basis” the status and nature of their employment was that of regular
employees.—As to the other benefits, namely, holiday pay, premium pay, 13th
month pay and service incentive leave which the labor arbiter failed to rule on but
which petitioners prayed for in their complaint, we hold that petitioners are so
entitled to these benefits. Three (3) factors lead us to conclude that petitioners,
although piece-rate workers, were regular employees of private respondents. First, as
to the nature of petitioners’ tasks, their job of repacking snack food was necessary or
desirable in the usual business of private respondents, who were engaged in the
manufacture and selling of such food products; second, petitioners worked for
private respondents throughout the year, their employment not having been
dependent on a specific project or season; and third, the length of time that
petitioners worked for private respondents. Thus, while petitioners’ mode of
compensation was on a “per piece basis,” the status and nature of their employment
was that of regular employees.
Same; Same; Same; Petitioners are beyond the ambit of exempted persons
and are therefore entitled to overtime pay.—As to overtime pay, the rules, however,
are different. According to Sec. 2(e), Rule I, Book III of the Implementing Rules,
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. Here, private respondents did not allege
adherence to the standards set forth in Sec. 8 nor with the rates prescribed by the
Secretary of Labor. As such, petitioners are beyond 
512
512  SUPREME COURT REPORTS ANNOTATED 
Labor Congress of the Philippines vs. NLRC
the ambit of exempted persons and are therefore entitled to overtime pay. Once
more, the National Labor Relations Commission would be in a better position to
determine the exact amounts owed petitioners, if any.
The facts are stated in the opinion of the Court.
     Ronald Dylan P. Concepcion and Jesus E.V. Tadiquefor private respondents.
24
DAVIDE, JR., J.:
In this special civil action for certiorari under Rule 65, petitioners seek to reverse the
29 March 1995 resolution 1 of the National Labor Relations Commission (NLRC) in
NLRC RAB III Case No. 01-1964-91 which affirmed the Decision 2 of Labor Arbiter
Ariel C. Santos dismissing their complaint for utter lack of merit.
The antecedents of this case, as summarized by the Office of the Solicitor General in
its Manifestation and Motion in Lieu of Comment, 3 are as follows:
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 (Paragraph 1, Annex "A" of Petition,
Annex "B;" Page 2, Annex "F" of Petition).
Petitioners filed against private respondents a complaint for
payment of money claim[s] and for violation of labor standard[s]
laws (NLRC Case No. RAB-111-10-1817-90). They also filed a
petition for direct certification of petitioner Labor Congress of the
Philippines as their bargaining representative (Case No. R0300-
9010-RU-005).
On October 23, 1990, petitioners represented by LCP President
Benigno B. Navarro, Sr. and private respondents Gonzalo Kehyeng
and Evelyn Kehyeng in behalf of Empire Food Products, Inc.
entered into a Memorandum of Agreement which provided, among
others, the following:
1. That in connection with the pending Petition for Direct
Certification filed by the Labor Congress with the DOLE,
Management of the Empire Food Products has no objection [to] the
direct certification of the LCP Labor Congress and is now
recognizing the Labor Congress of the Philippines (LCP) and its
Local Chapter as the 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;"
2. That with regards [sic] to NLRC CASE NO. RAB-III-10-1817-
90 pending with the NLRC parties jointly and mutually agreed that
the issues thereof, shall be discussed by the parties and resolve[d]
during the negotiation of the Collective Bargaining Agreement;
3. That Management of the Empire Food Products shall make the
proper adjustment of the Employees Wages within fifteen (15)
days from the signing of this Agreement and further agreed to
register all the employees with the SSS;
4. That Employer, Empire Food Products thru its Management
agreed to deduct thru payroll deduction UNION DUES and other
Assessment[s] upon submission by the LCP Labor Congress
individual Check-Off Authorization[s] signed by the Union
Members indicating the amount to be deducted and further agreed
all deduction[s] made representing Union Dues and Assessment[s]
shall be remitted immediately to the LCP Labor Congress
Treasurer or authorized representative within three (3) or five (5)
days upon deductions [sic], Union dues not deducted during the
period due, shall be refunded or reimbursed by the
Employer/Management. Employer/Management further agreed to
deduct Union dues from non-union members the same amount
deducted from union members without need of individual Check-
Off Authorizations [for] Agency Fee;
5. That in consideration [of] the foregoing covenant, parties jointly
and mutually agreed that NLRC CASE NO. RAB-III-10-1817-90
shall be considered provisionally withdrawn from the Calendar of
the National Labor Relations Commission (NLRC), while the
Petition for direct certification of the LCP Labor Congress parties
jointly move for the direct certification of the LCP Labor
Congress;
6. That parties jointly and mutually agreed that upon signing of this
Agreement, no Harassments [sic], Threats, Interferences [sic] of
their respective rights under the law, no Vengeance or Revenge by
each partner nor any act of ULP which might disrupt the operations
of the business;
7. Parties jointly and mutually agreed that pending negotiations or
formalization of the propose[d] CBA, this Memorandum of
Agreement shall govern the parties in the exercise of their
respective rights involving the Management of the business and the
terms and condition[s] of employment, and whatever problems and
grievances may arise by and between the parties shall be resolved
by them, thru the most cordial and good harmonious relationship
by communicating the other party in writing indicating said
grievances before taking any action to another forum or
government agencies;
25
8. That parties [to] this Memorandum of Agreement jointly and
mutually agreed to respect, abide and comply with all the terms
and conditions hereof. Further agreed that violation by the parties
of any provision herein shall constitute an act of ULP. (Annex "A"
of Petition).
In an Order dated October 24, 1990, Mediator Arbiter Antonio
Cortez approved the memorandum of agreement and certified LCP
"as the sole and exclusive bargaining agent among the rank-and-
file employee of Empire Food Products for purposes of collective
bargaining with respect to wages, hours of work and other terms
and conditions of employment" (Annex "B" of Petition).
On November 9, 1990, petitioners through LCP President Navarro
submitted to private respondents a proposal for collective
bargaining (Annex "C" of Petition).
On January 23, 1991, petitioners filed a complaint docketed as
NLRC Case No. RAB-III-01-1964-91 against private respondents
for:
a. Unfair Labor Practice by way of Illegal Lockout and/or
Dismissal;
b. Union busting thru Harassments [sic], threats, and interfering
with the rights of employees to self-organization;
c. Violation of the Memorandum of Agreement dated October 23,
1990;
d. Underpayment of Wages in violation of R.A. No. 6640 and R.A.
No. 6727, such as Wages promulgated by the Regional Wage
Board;
e. Actual, Moral and Exemplary Damages. (Annex "D" of Petition)
After the submission by the parties of their respective position
papers and presentation of testimonial evidence, Labor Arbiter
Ariel C. Santos 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. Labor Arbiter
Santos, however, directed the reinstatement of the individual
complainants:
The undersigned Labor Arbiter is not oblivious
to the fact that respondents have violated a
cardinal rule in every establishment that a payroll
and other papers evidencing hours of work,
payments, etc. shall always be maintained and
subjected to inspection and visitation by
personnel of the Department of Labor and
Employment. As such penalty, respondents
should not escape liability for this technicality,
hence, it is proper that all individual
complainants except those who resigned and
executed quitclaim[s] and releases prior to the
filing of this complaint should be reinstated to
their former position[s] with the admonition to
respondents that any harassment, intimidation,
coercion or any form of threat as a result of this
immediately executory reinstatement shall be
dealt with accordingly.
SO ORDERED. (Annex "G" of petition)
On appeal, the National Labor Relations Commission vacated the Decision dated
April 14, 1972 [sic] and remanded the case to the Labor Arbiter for further
proceedings for the following reasons:
The Labor Arbiter, through his decision, noted that ". . .
complainant did not present any single witness while respondent
presented four (4) witnesses in the persons of Gonzalo Kehyeng,
Orlando Cairo, Evelyn Kehyeng and Elvira Bulagan . . ." (p. 183,
Records), that ". . . complainant before the National Labor
Relations Commission must prove with definiteness and clarity the
offense charged. . . ." (Record, p. 183); that ". . . complainant failed
to specify under what provision of the Labor Code particularly Art.
248 did respondents violate so as to constitute unfair labor
practice . . ." (Record, p. 183); that "complainants failed to present
any witness who may describe in what manner respondents have
committed unfair labor practice . . ." (Record, p. 185); that ". . .
complainant LCP failed to present anyone of the so-called 99
complainants in order to testify who committed the threats and
intimidation . . ." (Record, p. 185).
26
 Upon review of the minutes of the proceedings on record,
however, it appears that complainant presented witnesses, namely,
BENIGNO NAVARRO, JR. (28 February 1991, RECORD,
p. 91; 8 March 1991, RECORD, p. 92, who adopted its
POSITION PAPER AND CONSOLIDATED AFFIDAVIT, as
Exhibit "A" and the annexes thereto as Exhibit "B", "B-1" to "B-
9", inclusive.Minutes of the proceedings on record show that
complainant further presented other witnesses, namely: ERLINDA
BASILIO (13 March 1991, RECORD, p. 93; LOURDES
PANTILLO, MARIFE PINLAC, LENIE GARCIA (16 April 1991,
Record, p. 96, see back portion thereof ; 2 May 1991, Record,
p. 102; 16 May 1991, Record, p. 103, 11 June 1991, Record,
p. 105). Formal offer of Documentary and Testimonial Evidence
was made by complainant on June 24, 1991 (Record, p.106-109)
The Labor Arbiter must have overlooked the testimonies of some of
the individual complainants which are now on record. Other
individual complainants should have been summoned with the end
in view of receiving their testimonies. The complainants should be
afforded the time and opportunity to fully substantiate their claims
against the respondents. Judgment should be rendered only based
on the conflicting positions of the parties. The Labor Arbiter is
called upon to consider and pass upon the issues of fact and law
raised by the parties.
Toward this end, therefore, it is Our considered view [that] the case
should be remanded to the Labor Arbiter of origin for further
proceedings. (Annex "H" of Petition)
In a Decision dated July 27, 1994, Labor Arbiter Santos made the following
determination:
Complainants failed to present with definiteness and clarity the
particular act or acts constitutive of unfair labor practice.
It is to be borne in mind that a declaration of unfair labor practice
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. Hence,
evidence which is more than a scintilla is required in order to
declare respondents/employers guilty of unfair labor practice.
Failing in this regard is fatal to the cause of complainants. Besides,
even the charge of illegal lockout has no leg to stand on because of
the testimony of respondents through their guard Orlando Cairo
(TSN, July 31, 1991 hearing; p. 5-35) that on January 21, 1991,
complainants refused and failed to report for work, hence guilty of
abandoning their post without permission from respondents. As a
result of complainants['] failure to report for work, the cheese curls
ready for repacking were all spoiled to the prejudice of
respondents. Under cross-examination, complainants failed to
rebut the authenticity of respondents' witness testimony.
As regards the issue of harassments [sic], 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. What are the acts or utterances
constitutive of harassments [sic] being complained of? These are
the specifics which should have been proven with definiteness and
clarity by complainants who chose to rely heavily on its position
paper through generalizations to prove their case.
Insofar as violation of [the] Memorandum of Agreement dated
October 23, 1990 is concerned, both parties agreed that:
2 — That with regards [sic] to the NLRC Case
No. RAB III-10-1817-90 pending with the
NLRC, parties jointly and mutually agreed that
the issues thereof shall be discussed by the
parties and resolve[d] during the negotiation of
the CBA.
The aforequoted provision does not speak of [an] obligation on the
part of respondents but on a resolutory condition that may occur or
may not happen. This cannot be made the basis of an imposition of
an obligation over which the National Labor Relations
Commission has exclusive jurisdiction thereof.
Anent the charge that there was underpayment of wages, the
evidence points to the contrary. The enumeration of complainants'
wages in their consolidated Affidavits of merit and position paper
which implies underpayment has no leg to stand on in the light of
the fact that complainants' admission that they are piece workers or
paid on a pakiao [basis] i.e. a certain amount for every thousand
pieces of cheese curls or other products repacked. The only
limitation for piece workers or pakiao workers is that they should
receive compensation no less than the minimum wage for an eight
(8) hour work [sic]. And compliance therewith was satisfactorily
27
 explained by respondent Gonzalo Kehyeng in his testimony (TSN,
p. 12-30) during the July 31, 1991 hearing. On cross-examination,
complainants failed to rebut or deny Gonzalo Kehyeng's testimony
that complainants have been even receiving more than the
minimum wage for an average workers [sic]. Certainly, a lazy
worker earns less than the minimum wage but the same cannot be
attributable to respondents but to the lazy workers.
Finally, the claim for moral and exemplary damages has no leg to
stand on when no malice, bad faith or fraud was ever proven to
have been perpetuated by respondents.
WHEREFORE, premises considered, the complaint is hereby
DISMISSED for utter lack of merit. (Annex "I" of Petition). 4
On appeal, the NLRC, in its Resolution dated 29 March 1995, 5 affirmed in toto the
decision of Labor Arbiter Santos. In so doing, the NLRC sustained the Labor
Arbiter's findings 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 in its Resolution
of 31 October 1995, 6petitioners filed the instant special civil action
for certiorari raising the following issues:
I
WHETHER OR NOT THE PUBLIC RESPONDENT NATIONAL
LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS
DISCRETION WHEN IT DISREGARDED OR IGNORED NOT
ONLY THE EVIDENCE FAVORABLE TO HEREIN
PETITIONERS, APPLICABLE JURISPRUDENCE BUT ALSO
ITS OWN DECISIONS AND THAT OF THIS HONORABLE
HIGHEST TRIBUNAL WHICH [WAS] TANTAMOUNT NOT
ONLY TO THE DEPRIVATION OF PETITIONERS' RIGHT TO
DUE PROCESS BUT WOULD RESULT [IN] MANIFEST
INJUSTICE.
II
WHETHER OR NOT THE PUBLIC RESPONDENT GRAVELY
ABUSED ITS DISCRETION WHEN IT DEPRIVED THE
PETITIONERS OF THEIR CONSTITUTIONAL RIGHT TO
SELF-ORGANIZATION, SECURITY OF TENURE,
PROTECTION TO LABOR, JUST AND HUMANE
CONDITIONS OF WORK AND DUE PROCESS.
III
WHETHER OR NOT THE PETITIONERS WERE ILLEGALLY
EASED OUT [OF] OR CONSTRUCTIVELY DISMISSED
FROM THEIR ONLY MEANS OF LIVELIHOOD.
IV
WHETHER OR NOT PETITIONERS SHOULD BE
REINSTATED FROM THE DATE OF THEIR DISMISSAL UP
TO THE TIME OF THEIR REINSTATEMENT, WITH
BACKWAGES, STATUTORY BENEFITS, DAMAGES AND
ATTORNEY'S FEES. 7
We required respondents to file their respective Comments.
In their Manifestation and Comment, private respondents asserted that the petition
was filed out of time. As petitioners admitted in their Notice to File Petition for
Review on Certiorari that they received a copy of the resolution (denying their
motion for reconsideration) on 13 December 1995, they had only until 29 December
1995 to file the petition. Having failed to do so, the NLRC thus already entered
judgment in private respondents' favor.
In their Reply, petitioners averred that Mr. Navarro, a non-lawyer who filed the
notice to file a petition for review on their behalf, mistook which reglementary
period to apply. Instead of using the "reasonable time" criterion for certiorari under
Rule 65, he used the 15-day period for petitions for review on certiorari under Rule
45. They hastened to add that such was a mere technicality which should not bar
their petition from being decided on the merits in furtherance of substantial justice,
especially considering that respondents neither denied nor contradicted the facts and
issues raised in the petition.
In its Manifestation and Motion in Lieu of Comment, the Office of the Solicitor
General (OSG) sided with petitioners. It pointed out that the Labor Arbiter, in
28
finding that petitioners abandoned their jobs, relied solely on the testimony of
Security Guard Rolando Cairo that petitioners refused to work on 21 January 1991,
resulting in the spoilage of cheese curls ready for repacking. However, the OSG
argued, this refusal to report for work for a single day did not constitute
abandonment, which pertains to a clear, deliberate and unjustified refusal to resume
employment, and not mere absence. In fact, the OSG stressed, two days after
allegedly abandoning their work, petitioners filed a complaint for, inter alia, illegal
lockout or illegal dismissal. Finally, the OSG questioned the lack of explanation on
the part of Labor Arbiter Santos as to why he abandoned his original decision to
reinstate petitioners.
In view of the stand of the OSG, we resolved to require the NLRC to file its own
Comment.
In its Comment, the NLRC invokes the general rule that factual findings of an
administrative agency bind a reviewing court and asserts that this case does not fall
under the exceptions. The NLRC further argues that grave abuse of discretion may
not be imputed to it, as it affirmed the factual findings and legal conclusions of the
Labor Arbiter only after carefully reviewing, weighing and evaluating the evidence
in support thereof, as well as the pertinent provisions of law and jurisprudence.
In their Reply, petitioners claim that the decisions of the NLRC and the Labor
Arbiter were not supported by substantial evidence; that abandonment was not
proved; and that much credit was given to self-serving statements of Gonzalo
Kehyeng, owner of Empire Foods, as to payment of just wages.
On 7 July 1997, we gave due course to the petition and required the parties to file
their respective memoranda. However, only petitioners and private respondents filed
their memoranda, with the NLRC merely adopting its Comment as its Memorandum.
We find for petitioners.
Invocation of the general rule that factual findings of the NLRC bind this Court is
unavailing under the circumstances. Initially, we are unable to discern any
compelling reason justifying the Labor Arbiter's volte face from his 14 April 1992
decision reinstating petitioners to his diametrically opposed 27 July 1994 decision,
when in both instances, he had before him substantially the same evidence. Neither
do we find the 29 March 1995 NLRC resolution to have sufficiently discussed the
facts so as to comply with the standard of substantial evidence. For one thing, the
NLRC confessed its reluctance to inquire into the veracity of the Labor Arbiter's
factual findings, staunchly declaring that it was "not about to substitute [its]
judgment on matters that are within the province of the trier of facts." Yet, in the 21
July 1992 NLRC resolution, 8 it chastised the Labor Arbiter for his errors both in
judgment and procedure; for which reason it remanded the records of the case to the
Labor Arbiter for compliance with the pronouncements therein.
What cannot escape from our attention is that the Labor Arbiter did not heed the
observations and pronouncements of the NLRC in its resolution of 21 July 1992,
neither did he understand the purpose of the remand of the records to him. In said
resolution, the NLRC summarized the grounds for the appeal to be:
1. that there is a prima facie evidence of abuse of discretion and
acts of gross incompetence committed by the Labor Arbiter in
rendering the decision.
2. that the Labor Arbiter in rendering the decision committed
serious errors in the findings of facts.
After which, the NLRC observed and found:
Complainant alleged that the Labor Arbiter disregarded the
testimonies of the 99 complainants who submitted their
Consolidated Affidavit of Merit and Position Paper which was
adopted as direct testimonies during the hearing and cross-
examined by respondents' counsel.
The Labor Arbiter, through his decision, noted that ". . .
complainant did not present any single witness while respondent
presented four (4) witnesses in the persons of Gonzalo Kehyeng,
Orlando Cairo, Evelyn Kehyeng and Elvira Bulagan . . ." (Records,
p. 183), that ". . . complainant before the National Labor Relations
Commission must prove with definiteness and clarity the offense
charged. . . ." (Record, p. 183; that ". . . complainant failed to
specify under what provision of the Labor Code particularly Art.
248 did respondents violate so as to constitute unfair labor
practice . . ." (Record, p. 183); that "complainants failed to present
any witness who may describe in what manner respondents have
committed unfair labor practice . . ." (Record, p. 185); that ". . .
complainant a [sic] LCP failed to present anyone of the so called
99 complainants in order to testify who committed the threats and
intimidation . . ." (Record, p.185).
Upon review of the minutes of the proceedings on record,
however, it appears that complainant presented witnesses, namely
BENIGNO NAVARRO, JR. (28 February 1991, RECORD, p. 91;
8 March 1991, RECORD, p. 92), who adopted its POSITION
PAPER AND CONSOLIDATED AFFIDAVIT as Exhibit A and
29
the annexes thereto as Exhibit B, B-1 to B-9, inclusive. Minutes of
the proceedings on record show that complainant further presented
other witnesses, namely: ERLINDA BASILIO (13 March 1991,
RECORD, p. 93; LOURDES PANTILLO, MARIFE PINLAC,
LENI GARCIA (16 April 1991, Record, p. 96, see back portion
thereof; 2 May 1991, Record, p. 102; 16 May 1991, Record, p.
103; 11 June 1991, Record, p. 105). Formal offer of Documentary
and Testimonial Evidence was made by the complainant on June
24, 1991 (Record, p.106-109).
The Labor Arbiter must have overlooked the testimonies of some
of the individual complainants which are now on record. Other
individual complainants should have been summoned with the end
in view of receiving their testimonies. The complainants should
[have been] afforded the time and opportunity to fully substantiate
their claims against the respondents. Judgment should [have been]
rendered only based on the conflicting positions of the parties. The
Labor Arbiter is called upon to consider and pass upon the issues
of fact and law raised by the parties.
Toward this end, therefore, it is Our considered view the case
should be remanded to the Labor Arbiter of origin for further
proceedings.
Further, We take note that the decision does not contain a
dispositive portion or fallo. Such being the case, it may be well
said that the decision does not resolve the issues at hand. On
another plane, there is no portion of the decision which could be
carried out by way of execution.
It may be argued that the last paragraph of the decision may be
categorized as the dispositive portion thereof:
x x x           x x x          x x x
The undersigned Labor Arbiter is not oblivious
[to] the fact that respondents have violated a
cardinal rule in every establishment that a payroll
and other papers evidencing hour[s] of work,
payment, etc. shall always be maintained and
subjected to inspection and visitation by
personnel of the Department of Labor and
Employment. As such penalty, respondents
should not escape liability for this technicality,
hence, it is proper that all the individual
complainants except those who resigned and
executed quitclaim[s] and release[s] prior to the
filing of this complaint should be reinstated to
their former position with the admonition to
respondents that any harassment, intimidation,
coercion or any form of threat as a result of this
immediately executory reinstatement shall be
dealt with accordingly.
SO ORDERED.
It is Our considered view that even assuming arguendo that the
respondents failed to maintain their payroll and other papers
evidencing hours of work, payment etc., such circumstance,
standing alone, does not warrant the directive to reinstate
complainants to their former positions. It is [a] well settled rule
that there must be a finding of illegal dismissal before
reinstatement be mandated.
In this regard, the LABOR ARBITER is hereby directed to include
in his clarificatory decision, after receiving evidence, considering
and resolving the same, the requisite dispositive portion.9
Apparently, the Labor Arbiter perceived that if not for petitioners, he would not have
fallen victim to this stinging rebuke at the hands of the NLRC. Thus does it appear to
us that the Labor Arbiter, in concluding in his 27 July 1994 Decision that petitioners
abandoned their work, was moved by, at worst, spite, or at best, lackadaisically
glossed over petitioner's evidence. On this score, we find the following observations
of the OSG most persuasive:
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. In several cases,
this Honorable Court held that "one could not possibly abandon his
work and shortly thereafter vigorously pursue his complaint for
30
illegal dismissal (De Ysasi III v. NLRC, 231 SCRA 173; Ranara v.
NLRC, 212 SCRA 631; Dagupan Bus Co. v. NLRC, 191 SCRA
328; Atlas Consolidated Mining and Development Corp. v. NLRC,
190 SCRA 505; Hua Bee Shirt Factory v. NLRC, 186 SCRA 586;
Mabaylan v. NLRC, 203 SCRA 570 and Flexo Manufacturing v.
NLRC, 135 SCRA 145). In Atlas Consolidated, supra, this
Honorable Court explicitly stated:
It would be illogical for Caballo, to abandon his
work and then immediately file an action seeking
for his reinstatement. We can not believe that
Caballo, who had worked for Atlas for two years
and ten months, would simply walk away from
his job unmindful of the consequence of his
act. i.e. the forfeiture of his accrued employment
benefits. In opting to finally to [sic] contest the
legality of his dismissal instead of just claiming
his separation pay and other benefits, which he
actually did but which proved to be futile after
all, ably supports his sincere intention to return
to work, thus negating Atlas' stand that he had
abandoned his job.
In De Ysasi III v. NLRC (supra), this Honorable Court stressed that
it is the clear, deliberate and unjustified refusal to resume
employment and not mere absence that constitutes abandonment.
The absence of petitioner employees for one day on January 21,
1991 as testified [to] by Security Guard Orlando Cairo did not
constitute abandonment.
In his first decision, Labor Arbiter Santos expressly directed the
reinstatement of the petitioner employees and admonished the
private respondents that "any harassment, intimidation, coercion or
any form of threat as a result of this immediately executory
reinstatement shall be dealt with accordingly.
In his second decision, Labor Arbiter Santos did not state why he
was abandoning his previous decision directing the reinstatement
of petitioner employees.
By directing in his first decision the reinstatement of petitioner
employees, the Labor Arbiter impliedly held that they did not
abandon their work but were not allowed to work without just
cause.
That petitioner employees are "pakyao" or piece workers does not
imply that they are not regular employees entitled to reinstatement.
Private respondent Empire Food Products, Inc. is a food and fruit
processing company. In Tabas v. California Manufacturing
Co., Inc. (169 SCRA 497), this Honorable Court held that the work
of merchandisers of processed food, who coordinate with grocery
stores and other outlets for the sale of the processed food is
necessary in the day-to-day operation[s] of the company. With
more reason, the work of processed food repackers is necessary in
the day-to-day operation[s] of respondent Empire Food Products. 10
It may likewise be stressed that the burden of proving the existence of just cause for
dismissing an employee, such as abandonment, rests on the employer, 11 a burden
private respondents failed to discharge.
Private respondents, moreover, in considering petitioners' employment to have been
terminated by abandonment, violated their rights to security of tenure and
constitutional right to due process in not even serving them with a written notice of
such termination. 12 Section 2, Rule XIV, Book V of the Omnibus Rules
Implementing the Labor Code provides:
Sec. 2. Notice of Dismissal — Any employer who seeks to dismiss
a worker shall furnish him a written notice stating the particular
acts or omission constituting the grounds for his dismissal. In cases
of abandonment of work, the notice shall be served at the worker's
last known address.
Petitioners are therefore entitled to reinstatement with full back wages pursuant to
Article 279 of the Labor Code, as amended by R.A. No. 6715. Nevertheless, the
records disclose that taking into account the number of employees involved, the
length of time that has lapsed since their dismissal, and the perceptible resentment
and enmity between petitioners and private respondents which necessarily strained
their relationship, reinstatement would be impractical and hardly promotive of the
best interests of the parties. In lieu of reinstatement then, separation pay at the rate of
one month for every year of service, with
a fraction of at least six (6) months of service considered as one (1) year, is in
order. 13
That being said, the amount of back wages to which each petitioner is entitled,
however, cannot be fully settled at this time. Petitioners, as piece-rate workers
having been paid by the piece, 14 there is need to determine the varying degrees of
production and days worked by each worker. Clearly, this issue is best left to the
National Labor Relations Commission.
31
As to the other benefits, namely, holiday pay, premium pay, 13th month pay and
service incentive leave which the labor arbiter failed to rule on but which petitioners
prayed for in their complaint, 15 we hold that petitioners are so entitled to these
benefits. Three (3) factors lead us to conclude that petitioners, although piece-rate
workers, were regular employees of private respondents. First, as to the nature of
petitioners' tasks, their job of repacking snack food was necessary or desirable in the
usual business of private respondents, who were engaged in the manufacture and
selling of such food products; second, petitioners worked for private respondents
throughout the year, their employment not having been dependent on a specific
project or season; and third, the length of time 16 that petitioners worked for private
respondents. Thus, while petitioners' mode of compensation was on a "per piece
basis," the status and nature of their employment was that of regular employees.
The Rules Implementing the Labor Code exclude certain employees from receiving
benefits such as nighttime pay, holiday pay, service incentive leave 17 and 13th
month pay, 18 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."
Plainly, petitioners as piece-rate workers do not fall within this group. As mentioned
earlier, not only did petitioners labor under the control of private respondents as their
employer, likewise did petitioners toil throughout the year with the fulfillment of
their quota as supposed basis for compensation. Further, in Section 8 (b), Rule IV,
Book III which we quote hereunder, piece workers are specifically mentioned as
being entitled to holiday pay.
Sec. 8. Holiday pay of certain employees. —
(b) Where a covered employee
is paid by results or output,
such as payment on piece
work, his holiday pay shall not
be less than his average daily
earnings for the last seven (7)
actual working days preceding
the regular holiday: Provided,
however, that in no case shall
the holiday pay be less than the
applicable statutory minimum
wage rate.
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, to wit:
2. EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851:
d. Employers of those who are
paid on purely commission,
boundary or task basis, and
those who are paid a fixed
amount for performing 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 grant the
required 13th month pay to
such workers. (emphasis
supplied)
The Revised Guidelines as well as the Rules and Regulations identify those
workers who fall under the piece-rate category as those who are paid a
standard amount for every piece or unit of work produced that is more or
less regularly replicated, without regard to the time spent in producing the
same. 20
As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I,
Book III of the Implementing Rules, 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. Here,
private respondents did not allege adherence to the standards set forth in Sec. 8 nor
with the rates prescribed by the Secretary of Labor. As such, petitioners are beyond
the ambit of exempted persons and are therefore entitled to overtime pay. Once
more, the National Labor Relations Commission would be in a better position to
determine the exact amounts owed petitioners, if any.
As to the claim that private respondents violated petitioners' right to self-
organization, the evidence on record does not support this claim. Petitioners relied
almost entirely on documentary evidence which, per se, did not prove any
wrongdoing on private respondents' part. For example, petitioners presented their
32
complaint 21 to prove the violation of labor laws committed by private respondents.
The complaint, however, is merely "the pleading alleging the plaintiff's cause or
causes of action." 22 Its contents are merely allegations, the verity of which shall have
to be proved during the trial. They likewise offered their Consolidated Affidavit of
Merit and Position Paper 23 which, like the offer of their Complaint, was a
tautological exercise, and did not help nor prove their cause. In like manner, the
petition for certification election 24 and the subsequent order of certification 25 merely
proved that petitioners sought and acquired the status of bargaining agent for all
rank-and-file employees. Finally, the existence of the memorandum of
agreement 26 offered to substantiate private respondents' non-compliance therewith,
did not prove either compliance or non-compliance, absent evidence of concrete,
overt acts in contravention of the provisions of the memorandum.

IN VIEW WHEREOF, the instant petition is hereby GRANTED. The Resolution of

the National Labor Relations Commission of 29 March 1995 and the Decision of the
Labor Arbiter of 27 July 1994 in NLRC Case No. RAB-III-01-1964-91 are hereby
SET ASIDE, and another is hereby rendered:

1. DECLARING petitioners to have been

illegally dismissed by private respondents, thus
entitled to full back wages and other privileges,
and separation pay in lieu of reinstatement at the
rate of one month's salary for every year of
service with a fraction of six months of service
considered as one year;

2. REMANDING the records of this case to the

National Labor Relations Commission for its
determination of the back wages and other
benefits and separation pay, taking into account
the foregoing observations; and

3. DIRECTING the National Labor Relations

Commission to resolve the referred issues within
sixty (60) days from its receipt of a copy of this
decision and of the records of the case and to
submit to this Court a report of its compliance
hereof within ten (10) days from the rendition of
its resolution.

Costs against private respondents.

SO ORDERED.

33

G.R. No. 195466. July 2, 2014.*
ARIEL L. DAVID, doing business under the name and style “YIELS HOG
DEALER,” petitioner, vs. JOHN G. MACASIO, respondent.
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari;
In this Rule 45 petition for review on certiorari of the Court of Appeals’ (CA’s)
decision rendered under a Rule 65 proceeding, the Supreme Court’s (SC’s) power of
review is limited to resolving matters pertaining to any perceived legal errors that
the CA may have committed in issuing the assailed decision.—In this Rule 45
petition for review on certiorari of the CA’s decision rendered under a Rule 65
proceeding, this Court’s power of review is limited to resolving matters pertaining to
any perceived legal errors that the CA may have committed in issuing the assailed
decision. This is in contrast with the review for jurisdictional errors, which we
undertake in an original certiorari action. In reviewing the legal correctness of the
CA decision, we examine the CA decision based on how it determined the presence
or absence of grave abuse of discretion in the NLRC
_______________
* SECOND DIVISION.
68
68 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
decision before it and not on the basis of whether the NLRC decision on the
merits of the case was correct. In other words, we have to be keenly aware that the
CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it.
Labor Law; Pakyaw Basis; Engagement on “pakyaw” or task basis does not
characterize the relationship that may exist between the parties, i.e., whether one of
employment or independent contractorship.—Engagement on “pakyaw” or task basis
does not characterize the relationship that may exist between the parties, i.e., whether
one of employment or independent contractorship. Article 97(6) of the Labor Code
defines wages as “x x x the remuneration or earnings, however designated, capable
of being expressed in terms of money, whether fixed or ascertained on a time,
task, piece, or commission basis, or other method of calculating the same, which
is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be
rendered[.]” In relation to Article 97(6), Article 101 of the Labor Code speaks of
workers paid by results or those whose pay is calculated in terms of the quantity or
quality of their work output which includes “pakyaw” work and other non-time
work.
Same; Employer-Employee Relationship; Elements of.—To determine the
existence of an employer-employee relationship, four elements generally need to be
considered, namely: (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. These elements or indicators comprise the so-called “four-fold”
test of employment relationship. Macasio’s relationship with David satisfies this test.
Same; Pakyaw Basis; 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.—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
69
VOL. 729, JULY 2, 2014 69
David vs. Macasio
worker receives a fixed amount as wage, without regard to the standard
measurements of time generally used in pay computation.
Same; Holiday Pay; Service Incentive Leave Pay; Field Personnel; Under the
Implementing Rules and Regulations (IRR), exemption from the coverage of holiday
and Service Incentive Leave (SIL) pay refer 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.”—The general rule is that holiday and SIL
pay provisions cover all employees. To be excluded from their coverage, an
employee must be one of those that these provisions expressly exempt, strictly in
accordance with the exemption. Under the IRR, exemption from the coverage of
holiday and SIL pay refer 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[.]” Note that unlike Article 82 of the Labor Code, 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.
Because of this difference, it may be argued that the Labor Code may be interpreted
to mean that those who are engaged on task basis, per se, are excluded from the SIL
and holiday payment since this is what the Labor Code provisions, in contrast with
the IRR, strongly suggest. The arguable interpretation of this rule may be conceded
to be within the discretion granted to the LA and NLRC as the quasi-judicial bodies
with expertise on labor matters.
34
 Same; Same; Same; Same; Pakyaw Basis; The payment of an employee on task
or pakyaw basis alone is insufficient to exclude one from the coverage of Service
Incentive Leave (SIL) and holiday pay.—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.” The IRR therefore validly
qualifies and limits the general exclusion of “workers paid by results” found in
Article 82 from the coverage of holiday and SIL pay. This is the only reasonable
interpretation since the determination of excluded workers who are paid by results
from the coverage of Title I is “determined by the Secretary of Labor in appropriate
regulations.”
70
70 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
Same; Same; Same; Same; In determining whether workers engaged on
“pakyaw” or task basis is entitled to holiday and Service Incentive Leave (SIL) pay,
the presence (or absence) of employer supervision as regards the worker’s time and
performance is the key.—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.
Same; 13th Month Pay; As with holiday and service incentive leave pay,
th
13  month pay benefits generally cover all employees; an employee must be one of
those expressly enumerated to be exempted. Section 3 of the Rules and Regulations
Implementing Presidential Decree (P.D.) No. 851 enumerates the exemptions from
the coverage of 13th month pay benefits.—The governing law on 13 th month pay is
PD No. 851. As with holiday and SIL pay, 13th month pay benefits generally cover
all employees; an employee must be one of those expressly enumerated to be
exempted. Section 3 of the Rules and Regulations Implementing P.D. No. 851
enumerates the exemptions from the coverage of 13th month pay benefits. Under
Section 3(e), “employers of those who are paid on x x x task basis, and those who
are paid a fixed amount for performing a specific work, irrespective of the time
consumed in the performance thereof” are exempted. Note that unlike the IRR of
the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations
Implementing PD No. 851 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.   the work tools and implements; the latter also rented the workplace. Macasio further
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
71
VOL. 729, JULY 2, 2014 71
David vs. Macasio
  Chan & Associates Law Office for petitioner.
  Cezar F. Maravilla for respondent. 
BRION, J.:
We resolve in this petition for review on certiorari 1 the challenge to the
November 22, 2010 decision2 and the January 31, 2011 resolution3 of the Court of
Appeals (CA) in C.A.-G.R. S.P. No. 116003. The CA decision annulled and set aside
the May 26, 2010 decision4 of the National Labor Relations Commission
(NLRC)5 which, in turn, affirmed the April 30, 2009 decision6 of the Labor Arbiter
(LA). The LA’s decision dismissed respondent John G. Macasio’s monetary claims.
The Factual Antecedents
In January 2009, Macasio filed before the LA a complaint 7 against petitioner
Ariel L. David, doing business under the name and style “Yiels Hog Dealer,” for
nonpayment of overtime pay, holiday pay and 13thmonth pay. He also claimed
payment for moral and exemplary damages and attorney’s fees. Macasio also
claimed payment for service incentive leave (SIL).8 
_______________
1 Rollo, pp. 8-30.
2 Penned by Associate Justice Celia C. Librea-Leagogo, and concurred in by
Associate Justices Remedios A. Salazar-Fernando and Michael P. Elbinias;  id., at
pp. 32-46.
3 Id., at pp. 47-48.
4 Penned by Presiding Commissioner Herminio V. Suelo; id., at pp. 150-156.
5 In NLRC LAC No. 07-002073-09 (NLRC NCR Case No. 01-00298-09).
6 Penned by Labor Arbiter Daniel J. Cajilig; id., at pp. 119-122.
7 Id., at pp. 61-63.
8 Filed on February 18, 2009; id., at pp. 64-75.
72
72 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
9
Macasio alleged  before the LA that he had been working as a butcher for David
since January 6, 1995. Macasio claimed that David exercised effective control and
supervision over his work, pointing out that David: (1) set the work day, reporting
time and hogs to be chopped, as well as the manner by which he was to perform his
work; (2) daily paid his salary of P700.00, which was increased from P600.00 in
2007, P500.00 in 2006 and P400.00 in 2005; and (3) approved and disapproved his
leaves. Macasio added that David owned the hogs delivered for chopping, as well as
claimed that David employs about twenty-five (25) butchers and delivery drivers. In
35
his defense,10 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 provisions of the Implementing Rules and
Regulations (IRR) of the Labor Code. 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.
Macasio disputed David’s allegations.11 He argued that, first, David did not start
his business only in 2005. He pointed to the Certificate of Employment 12 that David
issued in his favor which placed the date of his employment, albeit errone-
_______________
9  Ibid.
10 Position Paper filed on February 18, 2009; id., at pp. 80-86.
11 Reply by the Complainant; id., at pp. 87-91.
12 Id., at p. 76.
73
VOL. 729, JULY 2, 2014 73
David vs. Macasio
ously, in January 2000. Second, he reported for work every day which the payroll or
time record could have easily proved had David submitted them in evidence.
Refuting Macasio’s submissions,13 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,”14 executed by
Presbitero Solano and Christopher (Antonio Macasio’s co-butchers), to corroborate
his claims. In the April 30, 2009 decision, 15 the LA dismissed Macasio’s complaint
for lack of merit. The LA gave credence to David’s claim that he engaged Macasio
on “pakyaw” or task basis. The LA noted the following facts to support this finding:
(1) Macasio received the fixed amount of P700.00 for every work done, regardless of
the number of hours that he spent in completing the task and of the volume or
number of hogs that he had to chop per engagement; (2) Macasio usually worked for
only four hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following day; and
(3) the P700.00 fixed wage far exceeds the then prevailing daily minimum wage of
P382.00. The LA added that the nature of David’s business as hog dealer supports
this “pakyaw” or task basis arrangement.
The LA concluded that as Macasio was engaged on “pakyaw” or task basis, he is
not entitled to overtime, holiday, SIL and 13th month pay.
_______________
13 Respondent’s Reply; id., at pp. 92-96.
14 Id., at pp. 99-100.
15 Supra note 5.
74
74 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
The NLRC’s Ruling
In its May 26, 2010 decision,16 the NLRC affirmed the LA ruling.17 The NLRC
observed that David did not require Macasio to observe an eight-hour work schedule
to earn the fixed P700.00 wage; and that Macasio had been performing a non-time
work, pointing out that Macasio was paid a fixed amount for the completion of the
assigned task, irrespective of the time consumed in its performance. Since Macasio
was paid by result and not in terms of the time that he spent in the workplace,
Macasio is not covered by the Labor Standards laws on overtime, SIL and holiday
pay, and 13th month pay under the Rules and Regulations Implementing the
13th month pay law.18Macasio moved for reconsideration19 but the NLRC denied his
motion in its August 11, 2010 resolution, 20 prompting Macasio to elevate his case to
the CA via a petition for certiorari.21
The CA’s Ruling
In its November 22, 2010 decision, 22 the CA partly granted
Macasio’s certiorari petition and reversed the NLRC’s ruling for having been
rendered with grave abuse of discretion.
While the CA agreed with the LA and the NLRC that Macasio was a task basis
employee, it nevertheless found Macasio entitled to his monetary claims following
the doctrine
16 Supra note 4.
17 Rollo, pp. 123-139.
18 Presidential Decree No. 851 – ““Requiring All Employers to Pay Their
Employees a 13th Month Pay.” Enacted on December 16, 1975.
19 Rollo, pp. 160-176.
20 Id., at pp. 157-159.
21 Id., at pp. 180-204.
22 Supra note 2.
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David vs. Macasio
laid down in Serrano v. Severino Santos Transit.23 The CA explained that as a task
basis employee, Macasio is excluded from the coverage of holiday, SIL and
13th month pay only if he is likewise a “field personnel.” As defined by the Labor
Code, a “field personnel” is one who performs the work away from the office or
place of work and whose regular work hours cannot be determined with reasonable
certainty. In Macasio’s case, the elements that characterize a “field personnel” are
evidently lacking as he had been working as a butcher at David’s “Yiels Hog Dealer”
36
business in Sta. Mesa, Manila under David’s supervision and control, and for a fixed
working schedule that starts at 10:00 p.m.
Accordingly, the CA awarded Macasio’s claim for holiday, SIL and 13th month
pay for three years, with 10% attorney’s fees on the total monetary award. The CA,
however, denied Macasio’s claim for moral and exemplary damages for lack of
basis.
David filed the present petition after the CA denied his motion for
reconsideration24 in the CA’s January 31, 2011 resolution.25
The Petition
In this petition,26 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 reiterates his submissions before the lower tribunals 27 and adds that he
never had any control over the
_______________
23 G.R. No. 187698, August 9, 2010, 627 SCRA 483.
24 Rollo, pp. 49-56.
25 Supra note 3.
26 Supra note 1.
27 Although he now claims that he engaged Macasio’s services in 2000 instead
of 2005.
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76 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
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 as Macasio is a
task basis employee — who is paid the fixed amount of P700.00 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.
Finally, David argues that factual findings of the LA, when affirmed by the
NLRC, attain finality especially when, as in this case, they are supported by
substantial evidence. Hence, David posits that the CA erred in reversing the labor
tribunals’ findings and granting the prayed monetary claims.
The Case for the Respondent
Macasio counters that he was not a task basis employee or a “field personnel” as
David would have this Court believe. 28 He reiterates his arguments before the lower
tribunals and adds that, contrary to David’s position, the P700.00 fee that he was
paid for each day that he reported for work does not indicate a “pakyaw” or task
basis employment as this amount was paid daily, regardless of the number or pieces
of hogs that he had to chop. Rather, it indicates a daily-wage method of payment and
affirms his regular employment status. He points out that David did not allege or
present any evidence as regards the quota or number of hogs that he had to chop as
_______________
28 Rollo, pp. 223-243.
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David vs. Macasio
basis for the “pakyaw” or task basis payment; neither did David present the time
record or payroll to prove that he worked for less than eight hours each day.
Moreover, David did not present any contract to prove that his employment was on
task basis. As David failed to prove the alleged task basis or “pakyawan” agreement,
Macasio concludes that he was David’s employee.
Procedurally, Macasio points out that David’s submissions in the present petition
raise purely factual issues that are not proper for a petition for review on certiorari.
These issues — whether he (Macasio) was paid by result or on “pakyaw” basis;
whether he was a “field personnel”; whether an employer-employee relationship
existed between him and David; and whether David exercised control and
supervision over his work — are all factual in nature and are, therefore, proscribed in
a Rule 45 petition. He argues that the CA’s factual findings bind this Court, absent a
showing that such findings are not supported by the evidence or the CA’s judgment
was based on a misapprehension of facts. He adds that the issue of whether an
employer-employee relationship existed between him and David had already been
settled by the LA29 and the NLRC30 (as well as by the CA per Macasio’s
manifestation before this Court dated November 15, 2012),31 in his favor, in the
separate illegal case that he filed against David.
_______________
29 Docketed as NLRC OFW Case No. 06-09181-09. Decision dated January 27,
2010; id., at pp. 260-266.
30 Docketed as LAC No. 03-000566-10(3)(8)(T-7-10). Resolution dated
November 12, 2010; id., at pp. 267-272.
31 Id., at pp. 334-338. The CA decision dated November 6, 2012 in C.A.-G.R.
S.P. No. 118736 affirmed the LA and NLRC rulings in the illegal dismissal case
(Rollo, pp. 340-346). On May 6, 2013, David assailed the CA’s decision in C.A.-
G.R. S.P. No. 118736 before this Court via a petition for certiorari. The case was
docketed as G.R. No. 206735. In a Resolution dated July 15, 2013, the Court
dismissed David’s petition for being a wrong remedy and for failure to show any
grave abuse of discretion in the assailed CA decision.
78
37
78 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
The Issue
The issue revolves around the proper application and interpretation of the labor
law provisions on holiday, SIL and 13th month pay to a worker engaged on “pakyaw”
or task basis. In the context of the Rule 65 petition before the CA, the issue is
whether the CA correctly found the NLRC in grave abuse of discretion in ruling that
Macasio is entitled to these labor standards benefits.
The Court’s Ruling
We partially grant the petition.
Preliminary considerations:
the Montoya ruling and the
factual-issue-bar rule
In this Rule 45 petition for review on certiorari of the CA’s decision rendered
under a Rule 65 proceeding, this Court’s power of review is limited to resolving
matters pertaining to any perceived legal errors that the CA may have committed in
issuing the assailed decision. This is in contrast with the review for jurisdictional
errors, which we undertake in an original certiorari action. In reviewing the legal
correctness of the CA decision, we examine the CA decision based on how it
determined the presence or absence of grave abuse of discretion in the NLRC
decision before it and not on the basis of whether the NLRC decision on the merits of
the case was correct.32 In other words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it.33
_______________
32 Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27,
2009, 597 SCRA 334, 342-343.
33 Career Philippines Shipmanagement, Inc. v. Serna, G.R. No. 172086,
December 3, 2012, 686 SCRA 676, 683-684, citing Montoya v. Transmed Manila
Corporation, supra.
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David vs. Macasio
Moreover, the Court’s power in a Rule 45 petition limits us to a review of questions
of law raised against the assailed CA decision.34
In this petition, David essentially asks the question —whether Macasio is entitled
to holiday, SIL and 13th month pay. This one is a question of law. The determination
of this question of law however is intertwined with the largely factual issue of
whether Macasio falls within the rule on entitlement to these claims or within the
exception. In either case, the resolution of this factual issue presupposes another
factual matter, that is, the presence of an employer-employee relationship between
David and Macasio.
In insisting before this Court that Macasio was not his employee, David argues
that he engaged the latter on “pakyaw” or task basis. Very noticeably, David
confuses engagement on “pakyaw” or task basis with the lack of employment
relationship. Impliedly, David asserts that their “pakyawan” or task basis
arrangement negates the existence of employment relationship.
At the outset, we reject this assertion of the petitioner. Engagement on “pakyaw”
or task basis does not characterize the relationship that may exist between the
parties, i.e., whether one of employment or independent contractorship. Article 97(6)
of the Labor Code defines wages as “x x x the remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, 
_______________
34 See Basay v. Hacienda Consolacion, G.R. No. 175532, April 19, 2010, 618
SCRA 422, 434. “A question of law exists when the doubt or controversy concerns
the correct application of law or jurisprudence to a certain set of facts x x x. In
contrast, a question of fact exists when the doubt or difference arises as to the truth
or falsehood of facts or when the query invites calibration of the whole evidence[.]”
(Cosmos Bottling Corp. v. Nagrama, Jr., 571 Phil. 281, 296; 547 SCRA 571, 581
(2008), citing Republic v. Sandiganbayan, G.R. No. 135789, January 31, 2002, 375
SCRA 425).
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80 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
or other method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work done or to
be done, or for services rendered or to be rendered[.]” 35In relation to Article 97(6),
Article 10136 of the Labor Code speaks of workers paid by results or those whose pay
is calculated in terms of the quantity or quality of their work output which includes
“pakyaw” work and other non-time work.
More importantly, by implicitly arguing that his engagement of Macasio on
“pakyaw” or task basis negates employer-employee relationship, David would want
the Court to engage on a factual appellate review of the entire case to determine the
presence or existence of that relationship. This approach however is not authorized
under a Rule 45 petition for review of the CA decision rendered under a Rule 65
proceeding.
First, the LA and the NLRC denied Macasio’s claim not because of the absence
of an employer-employee but because of its finding that since Macasio is paid
on pakyawor task basis, then he is not entitled to SIL, holiday and 13 th month pay.
Second, we consider it crucial, that in the separate illegal dismissal case Macasio
filed with the LA, the LA, the NLRC and the CA uniformly found the existence of an
employer-employee relationship.37
_______________
38
 35 Emphases ours.
36 Article 101 of the Labor Code reads in full–
“Art. 101. Payment by results.—
The Secretary of Labor and Employment shall regulate the payment of wages by
results, including pakyaw, piecework, and other non-time work, in order to ensure
the payment of fair and reasonable wage rates, preferably through time and motion
studies or in consultation with representatives of workers’ and employer’s
organizations.”
37 This decision lapsed to finality upon the denial of David’s petition for review
filed with the Court.
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David vs. Macasio
In other words, aside from being factual in nature, the existence of an employer-
employee relationship is in fact a nonissue in this case. To reiterate, in deciding a
Rule 45 petition for review of a labor decision rendered by the CA under 65, the
narrow scope of inquiry is whether the CA correctly determined the presence or
absence of grave abuse of discretion on the part of the NLRC. In concrete question
form, “did the NLRC gravely abuse its discretion in denying Macasio’s claims
simply because he is paid on a non-time basis?”  
At any rate, even if we indulge the petitioner, we find his claim that no
employer-employee relationship exists baseless. Employing the control test, 38 we
find that such a relationship exist in the present case.   “1. x x x Ang katotohanan po ay nag apply po siya sa akin at kinuha ko siya
Even a factual review shows that
Macasio is David’s employee
To determine the existence of an employer-employee relationship, four elements
generally need to be considered, namely: (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. These elements or indicators comprise the so-called
“four-fold” test of employ-
_______________
38 Of these elements, the power to control is the most important criterion. Under
the “control test,” the important question to ask is 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 methods by which the result is to be accomplished. We
should, however, emphasize that the control test simply calls for the existence of the
right to control and not necessarily the actual exercise of this right. To be clear, the
test does not require that the employer actually supervises the performance of duties
by the employee. (Javier v. Fly Ace Corporation, 666 SCRA 383, 397-398; Chavez
v. NLRC, 489 Phil. 444, 456; 448 SCRA 478, 490 (2005); See Basay v. Hacienda
Consolacion, supra).
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82 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
ment relationship. Macasio’s relationship with David satisfies this test.  
First, David engaged the services of Macasio, thus satisfying the element of
“selection and engagement of the employee.” David categorically confirmed this fact
when, in his “Sinumpaang Salaysay,” he stated that “nag apply po siya sa akin at
kinuha ko siya na chopper[.]”39 Also, Solano and Antonio stated in their
“Pinagsamang Sinumpaang Salaysay”40 that “[k]ami po ay nagtratrabaho sa
Yiels x x x na pag-aari ni Ariel David bilang butcher” and “kilala namin si x x x
Macasio na isa ring butcher x x x ni x x x David at kasama namin siya sa aming
trabaho.” 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.”41 This satisfies the
element of “payment of wages.”
Third, David had been setting the day and time when Macasio should report for
work. This power to determine the work schedule obviously implies power of
control. By having the power to control Macasio’s work schedule, David could
_______________
39 Rollo, pp. 97-98. In paragraph 1 of David’s “Sinumpaang Salaysay,” he
stated:
na chopper sa kasunduan na pakyawan. P700.00ang binabayad ko sa kanya sa
bawat apat (4) na oras na trabaho bilang chopper na mag-uumpisa ng 10:00
P.M. ng gabi at matatapos sa 2:00 A.M. sa madaling araw o mas maaga pa dito
kung kaunti lang ang delivery ng baboy.” (emphasis ours)
40 Supra note 13; underscores ours.
41 Ibid.
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David vs. Macasio
regulate Macasio’s 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.
39
 Under this overall setup, all those working for David, including Macasio, could
naturally be expected to observe certain rules and requirements and David would
necessarily exercise some degree of control as the chopping of the hog meats would
be subject to his specifications. Also, since Macasio performed his tasks at David’s
workplace, David could easily exercise control and supervision over the former.
Accordingly, whether or not David actually exercised this right or power to control is
beside the point as the law simply requires the existence of this power to
control 42 or, as in this case, the existence of the right and opportunity to control and
supervise Macasio.43
_______________
42 Jaime N. Gapayao v. Rosario Fulo, et al., G.R. No. 193493, June 13, 2013,
698 SCRA 485.
43 But, in addition to the above circumstances that clearly meet the “four-fold
test,” three other circumstances satisfying the “economic dependence test” strengthen
the conclusion of the parties’ relationship as one of employer and employee (Dr.
Sevilla v. Court of Appeals, 243 Phil. 340, 348-349; 160 SCRA 171, 179 [1988]). For
one, Macasio had been performing work that is usually necessary and desirable to the
usual trade and business of David. The facts show that David is a hog dealer who
sells hog meats to his customers in the wet market. He engages butchers, such as
Macasio, to butcher and chop his hogs for distribution to his customers. Clearly,
Maca-
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84 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
In sum, the totality of the surrounding circumstances of the present case
sufficiently points to an employer-employee relationship existing between David and
Macasio.
Macasio is engaged on “pakyaw”
or task basis
At this point, we note that all three tribunals — the LA, the NLRC and the CA —
found that Macasio was engaged or paid on “pakyaw” or task basis. This factual
finding binds the Court under the rule that factual findings of labor tribunals when
supported by the established facts and in accord with the laws, especially when
affirmed by the CA, is binding on this Court.
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
sio’s work as a butcher qualifies as necessary and desirable to David’s hog dealer
business.   David vs. Macasio
Another, David had been repeatedly and continuously engaging Macasio’s
services to perform precisely the same task of butchering hogs or hog meats since
2000. David categorically confirmed, in his various pleadings, his continuous and
repeated hiring or engagement of Macasio, albeit, insisting that the engagement is on
“pakyaw” or task basis.
Lastly, Macasio regularly reported for work to earn the P700.00 fee. He would
likewise ask for cash advances from David for his and his family’s needs. David’s
“Sinumpaang Salaysay” confirms this observation when he stated that he refused to
give Macasio another cash advance as the latter already had several unpaid cash
advances. These facts clearly show that Macasio looked on to David for the former’s
daily financial needs in the form of wages.
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David vs. Macasio
work.44 Once the work or task is completed, the worker receives a fixed amount as
wage, without regard to the standard measurements 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.
In sum, the existence of employment relationship between the parties is
determined by applying the “four-fold” test; engagement on “pakyaw” or task basis
does not determine the parties’ relationship as it is simply a method of pay
computation. Accordingly, Macasio is David’s employee, albeit engaged on
“pakyaw” or task basis.
As an employee of David paid on pakyaw or task basis, we now go to the core
issue of whether Macasio is entitled to holiday, 13th month, and SIL pay.
On the issue of Macasio’s entitlement
to holiday, SIL and 13th month pay
The LA dismissed Macasio’s claims pursuant to Article 94 of the Labor Code in
relation to Section 1, Rule IV of the IRR of the Labor Code, and Article 95 of the
Labor Code, as well as Presidential Decree (PD) No. 851. The NLRC, on the other
hand, relied on Article 82 of the Labor Code and the Rules and Regulations
Implementing PD No. 851. Uniformly, these provisions exempt workers paid on
“pakyaw” or task basis from the coverage of holiday, SIL and 13th month pay.
44 C.A. Azucena, Jr., The Labor Code, Vol. I, p. 186 (8th ed., 2013).
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86 SUPREME COURT REPORTS ANNOTATED
40
 In reversing the labor tribunals’ rulings, the CA similarly relied on these
provisions, as well as on Section 1, Rule V of the IRR of the Labor Code and the
Court’s ruling in Serrano v. Severino Santos Transit.45 These labor law provisions,
when read together with the Serrano ruling, exempt those engaged on “pakyaw” or
task basis only if they qualify as “field personnel.”
In other words, what we have before us is largely a question of law regarding the
correct interpretation of these labor code provisions and the implementing rules;
although, to conclude that the worker is exempted or covered depends on the facts
and in this sense, is a question of fact: first, whether Macasio is a “field personnel”;
and second, whether those engaged on “pakyaw” or task basis, but who are not “field
personnel,” are exempted from the coverage of holiday, SIL and 13thmonth pay.
To put our discussion within the perspective of a Rule 45 petition for review of a
CA decision rendered under Rule 65 and framed in question form, the legal question
is whether the CA correctly ruled that it was grave abuse of discretion on the part of
the NLRC to deny Macasio’s monetary claims simply because he is paid on a non-
time basis without determining whether he is a field personnel or not.
To resolve these issues, we need to revisit the provisions involved.
Provisions governing SIL and holiday pay
Article 82 of the Labor Code provides the exclusions from the coverage of Title
I, Book III of the Labor Code — provisions governing working conditions and rest
periods.
Art. 82. Coverage.—The provisions of [Title I] shall applyto employees in
all establishments and undertakings whether for profit or not, but not to govern-
_______________
45 Supra note 23.
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David vs. Macasio
ment 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 results as determined
by the Secretary of Labor in appropriate regulations.
x x x x
“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. [emphases and underscores ours]
Among the Title I provisions are the provisions on holiday pay (under Article 94
of the Labor Code) and SIL pay (under Article 95 of the Labor Code). Under Article
82, “field personnel” on one hand and “workers who are paid by results” on the other
hand, are not covered by the Title I provisions. The wordings of Article 82 of the
Labor Code additionally categorize workers “paid by results” and “field personnel”
as separate and distinct types of employees who are exempted from the Title I
provisions of the Labor Code.
The pertinent portion of Article 94 of the Labor Code and its corresponding
provision in the IRR46 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 (10) workers[.] [emphasis ours]
x x x x
SECTION 1. Coverage.—This Rule shall apply to all employees except:
x x x x 
_______________
46 Section 1, Rule IV of Book 3.
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88 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
(e) Field personnel and other employees whose time and performance is
unsupervised by the employer includingthose 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.
[emphases ours]
On the other hand, Article 95 of the Labor Code and its corresponding provision
in the IRR47 pertinently provides:
Art. 95. Right to service incentive.—(a) Every employee who has rendered at
least one year of service shall be entitled to a yearly service incentive leave of five
days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit
herein provided, those enjoying vacation leave with pay of at least five days and
those employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor and
Employment after considering the viability or financial condition of such
establishment. [emphases ours]
x x x x
Section 1. Coverage.—This rule shall apply to all employees except:
x x x x
(e) Field personnel and other employees whose 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. [emphasis ours]
_______________
47 Section 1, Rule V of Book 3.
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41
 David vs. Macasio
Under these provisions, the general rule is that holiday and SIL pay provisions
cover all employees. To be excluded from their coverage, an employee must be one
of those that these provisions expressly exempt, strictly in accordance with the
exemption.
Under the IRR, exemption from the coverage of holiday and SIL pay refer 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[.]” Note
that unlike Article 82 of the Labor Code, 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.
Because of this difference, it may be argued that the Labor Code may be
interpreted to mean that those who are engaged on task basis, per se, are excluded
from the SIL and holiday payment since this is what the Labor Code provisions, in
contrast with the IRR, strongly suggest. The arguable interpretation of this rule may
be conceded to be within the discretion granted to the LA and NLRC as the quasi-
judicial bodies with expertise on labor matters.
However, as early as 1987 in the case of Cebu Institute of Technology v.
Ople48 the phrase “those who are engaged on task or contract basis” in the rule has
already been interpreted to mean as follows:
[the phrase] should however, be related with “field personnel” applying the rule
on ejusdem generis that general and unlimited terms are restrained and limited by the
particular terms that they follow. x x x Clearly, petitioner’s teaching personnel
cannot be deemed field personnel which refers “to nonagricultural employees who
_______________
48 No. L-58870, 18 December 1987, 156 SCRA 629.
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90 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
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. [Par. 3, Article 82, Labor Code of the
Philippines]. Petitioner’s claim that private respondents are not entitled to the service
incentive leave benefit cannot therefore be sustained.
 
In short, the payment of an employee on task or pakyawbasis 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.” The IRR therefore validly qualifies and limits the general
exclusion of “workers paid by results” found in Article 82 from the coverage of
holiday and SIL pay. This is the only reasonable interpretation since the
determination of excluded workers who are paid by results from the coverage of
Title I is “determined by the Secretary of Labor in appropriate regulations.”
The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus
Transport Systems, Inc. v. Bautista:
A careful perusal of said provisions of law will result in the conclusion that the
grant of service incentive leave has been delimited by the Implementing Rules and
Regulations of the Labor Code to apply only to those employees not explicitly
excluded by Section 1 of Rule V. According to the Implementing Rules, Service
Incentive Leave shall not apply to employees classified as “field personnel.” The
phrase “other employees whose performance is unsupervised by the employer” must
not be understood as a separate classification of employees to which service
incentive leave shall not be granted. Rather, it serves as an amplification of the
interpretation of the definition of field personnel under the Labor Code as those
“whose actual hours of work in the field cannot be determined with reasonable
certainty.”
The same is true with respect to the phrase “ those who are engaged on task or
contract basis, purely com-
91
VOL. 729, JULY 2, 2014 91
David vs. Macasio
mission basis.” Said phrase should be related with “field personnel,” applying the
rule on ejusdem generis that general and unlimited terms are restrained and limited
by the particular terms that they follow.
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the
CA cited in support of granting Macasio’s petition.
In Serrano, the Court, applying the rule on ejusdem generis49 declared that
“employees engaged on task or contract basis x x x are not automatically
exempted from the grant of service incentive leave, unless, they fall under the
classification of field personnel.”50 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.”
In contrast and in clear departure from settled case law, the LA and the NLRC
still interpreted the Labor Code provisions and the IRR as exempting an employee
from the coverage of Title I of the Labor Code based simply and solely on the mode
of payment of an employee. The NLRC’s utter disregard of this consistent
jurisprudential ruling is a
_______________
42
 49 The general and unlimited terms are restrained and limited by the particular
terms that they follow.
50 Supra note 23 at pp. 492-493; emphasis supplied, underscore ours.
92
92 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
clear act of grave abuse of discretion.51 In other words, by dismissing Macasio’s
complaint without considering whether Macasio was a “field personnel” or not,
the NLRC proceeded based on a significantly incomplete consideration of the
case. This action clearly smacks of grave abuse of discretion.
Entitlement to holiday pay
Evidently, the Serrano ruling speaks only of SIL pay. However, if the LA and
the NLRC had only taken counsel from Serrano and earlier cases, they would have
correctly reached a similar conclusion regarding the payment of holiday pay since
the rule exempting “field personnel” from the grant of holiday pay is identically
worded with the rule exempting “field personnel” from the grant of SIL pay. To be
clear, the phrase “employees engaged on task or contract basis” found in the IRR on
both SIL pay and holiday pay should be read together with the exemption of “field
personnel.”
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.
_______________
51 In case the LA and the NLRC cites a contrary jurisprudential ruling that
creates a real conflict in our existing case law, this is the only time that the Court
may exercise its discretion to have a wider scope of review of a Rule 65 CA
decision. In this case, the wider scope of review is necessitated by the need to create
a body of harmonious and workable jurisprudence.
93
VOL. 729, JULY 2, 2014 93
David vs. Macasio
Macasio does not fall under the
classification of “field personnel”
Based on the definition of field personnel under Article 82, we agree with the CA
that Macasio does not fall under the definition of “field personnel.” The CA’s finding
in this regard is supported by the established facts of this case: 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.
Not being a “field personnel,” we find the CA to be legally correct when it
reversed the NLRC’s ruling dismissing Macasio’s complaint for holiday and SIL pay
for having been rendered with grave abuse of discretion.
Entitlement to 13th month pay
With respect to the payment of 13th month pay however, we find that the CA
legally erred in finding that the NLRC gravely abused its discretion in denying this
benefit to Macasio.
The governing law on 13th month pay is PD No. 851. 52As with holiday and SIL
pay, 13th month pay benefits generally cover all employees; an employee must be
one of those expressly enumerated to be exempted. Section 3 of the Rules and
Regulations Implementing P.D. No. 85153enumerates the exemptions from the
coverage of 13thmonth pay benefits. Under Section 3(e), “employers of those who
are paid on x x x task basis, and those who are paid a fixed amount for
_______________
52 Enacted on December 16, 1975.
53 Issued on December 22, 1975.
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94 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
performing a specific work, irrespective of the time consumed in the
performance thereof”54 are exempted.
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e)
of the Rules and Regulations Implementing PD No. 851 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.
WHEREFORE, in light of these considerations, we hereby PARTIALLY
GRANT the petition insofar as the payment of 13th month pay to respondent is
concerned. In all other aspects, we AFFIRM the decision dated November 22, 2010
and the resolution dated January 31, 2011 of the Court of Appeals in C.A.-G.R. S.P.
No. 116003.
SO ORDERED.
Carpio (Chairperson), Del Castillo, Perez and Perlas-Bernabe, JJ., concur.
Petition partially granted, judgment and resolution affirmed. 
______________
54 Section 3(e) of the Rules and Regulations Implementing P.D. No. 851 reads in
full:
43
 SEC. 3.  Employers covered.—The Decree shall apply to all employers except
to:
x x x x
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. [emphases ours]
 
95
VOL. 729, JULY 2, 2014 95
David vs. Macasio
Notes.—Under Presidential Decree (P.D.) 851 or the Service Incentive Leave
(SIL) Law, the exclusion from its coverage of workers who are paid on a purely
commission basis is only with respect to field personnel; An employee who is paid
on purely commission basis is entitled to Service Incentive Leave (SIL). (Serrano vs.
Severino Santos Transit, 627 SCRA 483 [2010])
The employer has the burden of proving of paying holiday pay, service incentive
leave pay and other benefits. (Pigcaulan vs. Security and Credit Investigation, Inc.,
663 SCRA 1 [2012])

——o0o——

G.R. No. 94951. April 22, 1991.*

APEX MINING COMPANY, INC., petitioner, vs.NATIONAL LABOR
RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents.
Labor Laws; Domestic Helper, defined.—Under Rule XIII, Section 1(b), Book
3 of the Labor Code, as amended, the terms “househelper” or “domestic servant” are
defined as follows: “The term ‘househelper’ as used herein is synonymous to the
term ‘domestic servant’ and shall refer to any person, whether male or female, who
renders services in and about the employer’s home and which services are usually
necessary or desirable for the maintenance and enjoyment thereof, and ministers
exclusively to the personal comfort and enjoyment of the employer’s family.” The
foregoing definition clearly contemplates such househelper or domestic servant who
is employed in the employer’s home to minister exclusively to the personal comfort

44
and enjoyment of the employer’s family. Such definition covers family drivers,
domestic servants, laundry women, yayas, gardeners, houseboys and other similar
househelps.
Same; Same; Laundrywoman in staffhouses of a company, not included in the
definition of domestic helpers.—The definition cannot be interpreted to include
househelp or laundrywomen working in staffhouses of a company, like petitioner
who attends to the needs of the company’s guest and other persons availing of said
facilities. By the same token, it cannot be considered to extend to the driver,
houseboy, or gardener exclusively working in the company, the staffhouses and its
premises. They may not be considered as within the meaning of a “househelper” or
“domestic servant” as above-defined by law.
Same; Same; Same; Laundrywoman not actually serving the family of the
employer but working in the staffhouses or within the premises of the business of the
employer is a regular employee.—The criteria is the personal comfort and enjoyment
of the family of the employer in the home of said employer. While it may be true that
the nature of the work of a househelper, domestic servant or laundrywoman in a
home or in a company staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually  reported the accident to her immediate supervisor Mila de la Rosa and to the
_______________
*
 FIRST DIVISION.
252
252  SUPREME COURT REPORTS ANNOTATED 
Apex Mining Company, Inc. vs. NLRC
serving the family while in the latter case, whether it is a corporation or a
single proprietorship engaged in business or industry or any other agricultural or
similar pursuit, service is being rendered in the staffhouses or within the premises of
the business of the employer. In such instance, they are employees of the company or
employer in the business concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic servant is
assigned to certain aspects of the business of the employer that such househelper or
domestic servant may be considered as such an employee. The Court finds no merit
in making any such distinction. The mere fact that the househelper or domestic
servant is working within the premises of the business of the employer and in
relation to or in connection with its business, as in its staffhouses for its guest or even
for its officers and employees, warrants the conclusion that such househelper or
domestic servant is and should be considered as a regular employee of the employer
and not as a mere family househelper or domestic servant as contemplated in Rule
XIII, Section 1(b), Book 3 of the Labor Code, as amended.
PETITION for certiorari to review the decision of the National Labor Relations
Commission.
The facts are stated in the opinion of the Court.
      Bernabe B. Alabastro for petitioner.
      Angel Fernandez for private respondent.
GANCAYCO, J.:
Is the househelper in the staff houses of an industrial company a domestic helper or a
regular employee of the said firm? This is the novel issue raised in this petition.
Private respondent Sinclita Candida was employed by petitioner Apex Mining
Company, Inc. on May 18, 1973 to perform laundry services at its staff house located
at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece rate
basis. However, on January 17, 1982, she was paid on a monthly basis at P250.00 a
month which was ultimately increased to P575.00 a month.
On December 18, 1987, while she was attending to her assigned task and she was
hanging her laundry, she accidentally slipped and hit her back on a stone. She
personnel officer, Florendo D. Asirit. As a result of the accident she was not able to
continue with her work. She was permitted to go on leave for medication. De la Rosa
offered her the amount of P 2,000.00 which was eventually increased to P5,000.00 to
persuade her to quit her job, but she refused the offer and preferred to return to work.
Petitioner did not allow her to return to work and dismissed her on February 4, 1988.
On March 11, 1988, private respondent filed a request for assistance with the
Department of Labor and Employment. After the parties submitted their position
papers as required by the labor arbiter assigned to the case on August 24, 1988 the
latter rendered a decision, the dispositive part of which reads as follows:
WHEREFORE, Conformably With The Foregoing, judgment is hereby
rendered ordering the respondent, Apex Mining Company, Inc., Masara,
Davao del Norte, to pay the complainant, to wit:
1 Salary
Differential –– P16,289.20
2. Emergency Living
Allowance –– 12,430.00
3. 13th Month Pay
45
 Differential –– 1,322.32
4. Separation Pay
(One-month for
every year of
service [1973-19881) –– 25,119.30
or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY
ONE PESOS AND 42/100 (P55,161.42).
SO ORDERED.1
Not satisfied therewith, petitioner appealed to the public respondent National Labor
Relations Commission (NLRC), wherein in due course a decision was rendered by
the Fifth Division thereof on July 20, 1989 dismissing the appeal for lack of merit
and affirming the appealed decision. A motion for reconsideration thereof was
denied in a resolution of the NLRC dated June 29, 1990.
Hence, the herein petition for review by certiorari, which appopriately should be a
special civil action for certiorari, and which in the interest of justice, is hereby
treated as such.2 The main thrust of the petition is that private respondent should be
treated as a mere househelper or domestic servant and not as a regular employee of
petitioner.
The petition is devoid of merit.
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms
"househelper" or "domestic servant" are defined as follows:
The term "househelper" as used herein is synonymous to the term "domestic
servant" and shall refer to any person, whether male or female, who renders
services in and about the employer's home and which services are usually
necessary or desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of the
employer's family.3
The foregoing definition clearly contemplates such househelper or domestic servant
who is employed in the employer's home to minister exclusively to the personal
comfort and enjoyment of the employer's family. Such definition covers family
drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other
similar househelps.
The definition cannot be interpreted to include househelp or laundrywomen working
in staffhouses of a company, like petitioner who attends to the needs of the
company's guest and other persons availing of said facilities. By the same token, it
cannot be considered to extend to then driver, houseboy, or gardener exclusively
working in the company, the staffhouses and its premises. They may not be
considered as within the meaning of a "househelper" or "domestic servant" as above-
defined by law.
The criteria is the personal comfort and enjoyment of the family of the employer in
the home of said employer. While it may be true that the nature of the work of a
househelper, domestic servant or laundrywoman in a home or in a company
staffhouse may be similar in nature, the difference in their circumstances is that in
the former instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in business or industry
or any other agricultural or similar pursuit, service is being rendered in the
staffhouses or within the premises of the business of the employer. In such instance,
they are employees of the company or employer in the business concerned entitled to
the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic servant is
assigned to certain aspects of the business of the employer that such househelper or
domestic servant may be considered as such as employee. The Court finds no merit
in making any such distinction. The mere fact that the househelper or domestic
servant is working within the premises of the business of the employer and in
relation to or in connection with its business, as in its staffhouses for its guest or even
for its officers and employees, warrants the conclusion that such househelper or
domestic servant is and should be considered as a regular employee of the employer
and not as a mere family househelper or domestic servant as contemplated in Rule
XIII, Section l(b), Book 3 of the Labor Code, as amended.
Petitioner denies having illegally dismissed private respondent and maintains that
respondent abandoned her work.1âwphi1This argument notwithstanding, there is
enough evidence to show that because of an accident which took place while private
respondent was performing her laundry services, she was not able to work and was
ultimately separated from the service. She is, therefore, entitled to appropriate relief
as a regular employee of petitioner. Inasmuch as private respondent appears not to be
interested in returning to her work for valid reasons, the payment of separation pay to
her is in order.
WHEREFORE, the petition is DISMISSED and the appealed decision and resolution
of public respondent NLRC are hereby AFFIRMED. No pronouncement as to costs.
46
SO ORDERED.

G.R. No. 96078. January 9,1992.*

HILARIO RADA, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION (Second Division) and PHILNOR CONSULTANTS AND
PLANNERS, INC., respondents.
Labor Law; Appeals; Technical rules not binding and prior resort to amicable
settlement; An appeal by the employer may be perfected only upon the posting of a
cash or surety bond.—While it is true that the payment of the supersedeas bond is an
essential requirement in the perfection of an appeal, however, where the fee had been
paid although payment was delayed, the broader interests of justice and the desired
objective of resolving controversies on the merits demands that the appeal be given
due course. Besides, it was within the inherent power of the NLRC to have allowed
late payment of the bond, considering that the aforesaid decision of the labor arbiter
was received by private respondent on October 3, 1989 and its appeal was duly filed
on October 13, 1989. However, said decision did not state the amount awarded as
backwages and overtime pay, hence the amount of the supersedeas bond could not be
determined. It was only in the order of the NLRC of February 16,1990 that the
amount of the supersedeas bond was specified and which bond, after an extension
granted by the NLRC, was timely filed by private respondent.
Same; Termination of Employment; Where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee, the employment is not to
be deemed regular.—A non-project employee is different in that the employee is
hired for more than one project. A non-project employee, vis-a-vis a project
employee, is best exemplified in the case of Fegurin, et al. vs. National Labor
Relations Commission, et al. wherein four of the petitioners had been working with
the company for nine years, one for eight years, another for six years, the shortest
term being three years. In holding that petitioners are regular employees, this Court
therein explained: "Considering the nature of the work of petitioners, that of
carpenter, laborer or mason, their respective jobs would actually be continuous and
on-going. When a project to which they are individually assigned is completed, they
would be assigned to the next project or a phase thereof. In other words, they
belonged to a 'work pool' from which the 
_______________
*
 SECOND DIVISION.
70
70  SUPREME COURT REPORTS ANNOTATED 
Rada vs. NLRC

47
 company would draw workers for assignment to other projects at its discretion.
They are, therefore, actually 'non-project employees.'" From the foregoing, it is clear
that petitioner is a project employee considering that he does not belong to a "work
pool" from which the company would draw workers for assignment to other projects
at its discretion. It is likewise apparent from the facts obtaining herein that petitioner
was utilized only for one particular project, the MNEE Stage 2 Project of respondent
company. Hence, the termination of herein petitioner is valid by reason of the
completion of the project and the expiration of his employment contract.
Same; Conditions of Employment; Hours of Work; Hours worked shall
include all time during which an employee is suffered or permitted to work.—
Anent the claim for overtime compensation, we hold that petitioner is entitled to the
same. The fact that he picks up employees of Philnor at certain specified points along
EDSA in going to the project site and drops them off at the same points on his way
back from the field office going home to Marikina, Metro Manila is not merely
incidental to petitioner's job as a driver. On the contrary, said transportation
arrangement had been adopted, not so much for the convenience of the employees,
but primarily for the benefit of the employer, herein private respondent. This fact is
inevitably deducible from the Memorandum of respondent company: "The herein
Respondent resorted to the above transport arrangement because from its previous
project construction supervision experiences, Respondent found out that project
delays and inefficiencies resulted from employees' tardiness; and that the problem of
tardiness, in turn, was aggravated by transportation problems, which varied in
degrees in proportion to the distance between the project site and the employees'
residence. In view of this lesson from experience, and as a practical, if expensive,
solution to employees' tardiness and its concomitant problems, Respondent adopted
the policy of allowing certain employees—not necessarily project drivers—to bring
home project vehicles, so that employees could be afforded fast, convenient and free
transportation to and from the project field office. x x x."
SPECIAL CIVIL ACTION for certiorari to review the decision of the National
Labor Relations Commission.
The facts are stated in the opinion of the Court.
     Caballero, Calub, Aumentado & Associates Law Offices for petitioner.
REGALADO, J.:
In this special civil action for certiorari, petitioner Rada seeks to annul the decision
of respondent National Labor Relations Commission (NLRC), dated November 19,
1990, reversing the decision of the labor arbiter which ordered the reinstatement of
petitioner with backwages and awarded him overtime pay. 1
The facts, as stated in the Comment of private respondent Philnor Consultants and
Planners, Inc. (Philnor), are as follows:
Petitioner's initial employment with this Respondent was under a
"Contract of Employment for a Definite Period" dated July 7,
1977, copy of which is hereto attached and made an integral part
hereof as Annex A whereby Petitioner was hired as "Driver" for the
construction supervision phase of the Manila North Expressway
Extension, Second Stage (hereinafter referred to as MNEE Stage 2)
for a term of "about 24 months effective July 1, 1977.
xxx xxx xxx
Highlighting the nature of Petitioner's employment, Annex
A specifically provides as follows:
It is hereby understood that the Employer does
not have a continuing need for the services of the
Employee beyond the termination date of this
contract and that the Employee's services shall
automatically, and without notice, terminate
upon the completion of the above specified phase
of the project; and that it is further understood
that the engagement of his/her services is
coterminus with the same and not with the whole
project or other phases thereof wherein other
employees of similar position as he/she have
been hired. (Par. 7, emphasis supplied)
Petitioner's first contract of employment expired on June 30, 1979.
Meanwhile, the main project, MNEE Stage 2, was not finished on
account of various constraints, not the least of which was
inadequate funding, and the same was extended and remained in
progress beyond the original period of 2.3 years. Fortunately for
the Petitioner, at the time the first contract of employment expired,
Respondent was in need of Driver for the extended project. Since
Petitioner had the necessary experience and his performance under
the first contract of employment was found satisfactory, the
position of Driver was offered to Petitioner, which he accepted.
Hence a second Contract of Employment for a Definite Period of
10 months, that is, from July 1, 1979 to April 30, 1980 was
executed between Petitioner and Respondent on July 7, 1979. . . .
In March 1980 some of the areas or phases of the project were
completed, but the bulk of the project was yet to be finished. By
that time some of those project employees whose contracts of
employment expired or were about to expire because of the
48
 completion of portions of the project were offered another
employment in the remaining portion of the project. Petitioner was
among those whose contract was about to expire, and since his
service performance was satisfactory, respondent renewed his
contract of employment in April 1980, after Petitioner agreed to
the offer. Accordingly, a third contract of employment for a
definite period was executed by and between the Petitioner and the
Respondent whereby the Petitioner was again employed as Driver
for 19 months, from May 1, 1980 to November 30, 1981, . . .
This third contract of employment was subsequently extended for a
number of times, the last extension being for a period of 3 months,
that is, from October 1, 1985 to December 31, 1985, . . .
The last extension, from October 1, 1985 to December 31, 1985
(Annex E) covered by an "Amendment to the Contract of
Employment with a Definite Period," was not extended any further
because Petitioner had no more work to do in the project. This last
extension was confirmed by a notice on November 28, 1985 duly
acknowledged by the Petitioner the very next day, . . .
Sometime in the 2nd week of December 1985, Petitioner applied
for "Personnel Clearance" with Respondent dated December 9,
1985 and acknowledged having received the amount of P3,796.20
representing conversion to cash of unused leave credits and
financial assistance. Petitioner also released Respondent from all
obligations and/or claims, etc. in a "Release, Waiver and
Quitclaim" . . . 2
Culled from the records, it appears that on May 20, 1987, petitioner filed before the
NLRC, National Capital Region, Department of Labor and Employment, a
Complaint for non-payment of separation pay and overtime pay. On June 3, 1987,
Philnor filed its Position Paper alleging, inter alia, that petitioner was not illegally
terminated since the project for which he was hired was completed; that he was hired
under three distinct contracts of employment, each of which was for a definite
period, all within the estimated period of MNEE Stage 2 Project, covering different
phases or areas of the said project; that his work was strictly confined to the MNEE
Stage 2 Project and that he was never assigned to any other project of Philnor; that he
did not render overtime services and that there was no demand or claim for him for
such overtime pay; that he signed a "Release, Waiver and Quitclaim" releasing
Philnor from all obligations and claims; and that Philnor's business is to provide
engineering consultancy services, including supervision of construction services,
such that it hires employees according to the requirements of the project manning
schedule of a particular contract. 3
On July 2, 1987, petitioner filed an Amended Complaint alleging that he was
illegally dismissed and that he was not paid overtime pay although he was made to
render three hours overtime work form Monday to Saturday for a period of three
years.
On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally
dismissed since he was a regular employee entitled to security of tenure; that he was
not a project employee since Philnor is not engaged in the construction business as to
be covered by Policy Instructions No. 20; that the contract of employment for a
definite period executed between him and Philnor is against public policy and a clear
circumvention of the law designed merely to evade any benefits or liabilities under
the statute; that his position as driver was essential, necessary and desirable to the
conduct of the business of Philnor; that he rendered overtime work until 6:00 p.m.
daily except Sundays and holidays and, therefore, he was entitled to overtime pay. 4
In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular
employee pursuant to Article 278(c) of the Labor Code and, thus, he cannot be
terminated except for a just cause under Article 280 of the Code; and that the public
respondent's ruling in Quiwa vs. Philnor Consultants and Planners, Inc. 5 is not
applicable to his case since he was an administrative employee working as a
company driver, which position still exists and is essential to the conduct of the
business of Philnor even after the completion of his contract of
employment. 6Petitioner likewise avers that the contract of employment for a definite
period entered into between him and Philnor was a ploy to defeat the intent of Article
280 of the Labor Code.
On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper,
alleging therein that petitioner was not a company driver since his job was to drive
the employees hired to work at the MNEE Stage 2 Project to and from the filed
office at Sto. Domingo Interchange, Pampanga; that the office hours observed in the
project were from 7:00 a.m. to 4:00 p.m. Mondays through Saturdays; that Philnor
adopted the policy of allowing certain employees, not necessarily the project driver,
to bring home project vehicles to afford fast and free transportation to and from the
project field office considering the distance between the project site and the
employees' residence, to avoid project delays and inefficiency due to employee
tardiness caused by transportation problem; that petitioner was allowed to use a
project vehicle which he used to pick up and drop off some ten employees along
Epifanio de los Santos Avenue (EDSA), on his way home to Marikina, Metro
Manila; that when he was absent or on leave, another employee living in Metro
Manila used the same vehicle in transporting the same employees; that the time used
by petitioner to and from his residence to the project site from 5:30 a.m. to 7:00 a.m.
and from 4:00 p.m. to 6:00 p.m., or about three hours daily, was not overtime work
as he was merely enjoying the benefit and convenience of free transportation
provided by Philnor, otherwise without such vehicle he would have used at least four
49
hours by using public transportation and spent P12.00 daily fare; that in the case
of Quiwa vs. Philnor Consultants and Planners, Inc., supra, the NLRC upheld
Philnor's position that Quiwa was a project employee and he was not entitled to
termination pay under Policy Instructions No. 20 since his employment was
coterminous with the completion of the project.
On August 25, 1987, Philnor filed its Respondent's Reply/Comments to
Complainant's Rejoinder and Reply, submitting therewith two letters dated January
5, 1985 and February 6, 1985, signed by MNEE Stage 2 Project employees,
including herein petitioner, where they asked what termination benefits could be
given to them as the MNEE Stage 2 Project was nearing completion, and Philnor's
letter-reply dated February 22, 1985 informing them that they are not entitled to
termination benefits as they are contractual/project employees.
On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision 7 with
the following dispositive portion:
WHEREFORE, in view of all the foregoing considerations,
judgment is hereby rendered:
(1) Ordering the respondent company to reinstate the complainant
to his former position without loss of seniority rights and other
privileges with full backwages from the time of his dismissal to his
actual reinstatement;
(2) Directing the respondent company to pay the complainant
overtime pay for the three excess hours of work performed during
working days from January 1983 to December 1985; and
(3) Dismissing all other claims for lack of merit.
SO ORDERED.
Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November
19, 1990, setting aside the labor arbiter's aforequoted decision and dismissing
petitioner's complaint.
Hence this petition wherein petitioner charges respondent NLRC with grave abuse of
discretion amounting to lack of jurisdiction for the following reasons:
1. The decision of the labor arbiter, dated August 31, 1989, has already become final
and executory;
2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is
it applicable to this case;
3. The petitioner is a regular employee with eight years and five months of
continuous services for his employer, private respondent Philnor;
4. The claims for overtime services, reinstatement and full backwages are valid and
meritorious and should have been sustained; and
5. The decision of the labor arbiter should be reinstated as it is more in accord with
the facts, the law and evidence.
The petition is devoid of merit.
1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of
the appeal filed by Philnor in spite of the latter's failure to file a supersedeas bond
within ten days from receipt of the labor arbiter's decision, by reason of which the
appeal should be deemed to have been filed out of time. It will be noted, however,
that Philnor was able to file a bond although it was made beyond the 10-day
reglementary period.
While it is true that the payment of the supersedeas bond is an essential requirement
in the perfection of an appeal, however, where the fee had been paid although
payment was delayed, the broader interests of justice and the desired objective of
resolving controversies on the merits demands that the appeal be given due course.
Besides, it was within the inherent power of the NLRC to have allowed late payment
of the bond, considering that the aforesaid decision of the labor arbiter was received
by private respondent on October 3, 1989 and its appeal was duly filed on October
13, 1989. However, said decision did not state the amount awarded as backwages
and overtime pay, hence the amount of the supersedeas bond could not be
determined. It was only in the order of the NLRC of February 16, 1990 that the
amount of the supersedeas bond was specified and which bond, after an extension
granted by the NLRC, was timely filed by private respondent.
Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before
the Commission or any of the Labor Arbiters, the rules of evidence prevailing in
Courts of law or equity shall not be controlling and it is the spirit and intention of
this Code that the Commission and its members and the Labor Arbiters shall use
every and all reasonable means to ascertain the facts in each case speedily and
objectively without regard to technicalities of law or procedure, all in the interest of
due process. 8 Finally, the issue of timeliness of the appeal being an entirely new and
unpleaded matter in the proceedings below it may not now be raised for the first time
before this Court. 9
50
2. Petitioner postulates that as a regular employee, he is entitled to security of tenure,
hence he cannot be terminated without cause. Private respondent Philnor believes
otherwise and asserts that petitioner is merely a project employee who was
terminated upon the completion of the project for which he was employed.
In holding that petitioner is a regular employee, the labor arbiter found that:
. . . There is no question that the complainant was employed as
driver in the respondent company continuously from July 1, 1977
to December 31, 1985 under various contracts of employment.
Similarly, there is no dispute that respondent Philnor Consultant &
Planner, Inc., as its business name connotes, has been engaged in
providing to its client(e)le engineering consultancy services. The
record shows that while the different labor contracts executed by
the parties stipulated definite periods of engaging the services of
the complainant, yet the latter was suffered to continue performing
his job upon the expiration of one contract and the renewal of
another. Under these circumstances, the complaint has obtained the
status of regular employee, it appearing that he has worked without
fail for almost eight years, a fraction of six months considered as
one whole year, and that his assigned task as driver was necessary
and desirable in the usual trade/business of the respondent
employer. Assuming to be true, as spelled out in the employment
contract, that the Employer has no "continuing need for the
services of the Employe(e) beyond the termination date of this
contract and that the Employee's services shall automatically, and
without notice, terminate upon completion of the above specified
phase of the project," still we cannot see our way clear why the
complainant was hired and his services engaged contract after
contract straight from 1977 to 1985 which, to our considered view,
lends credence to the contention that he worked as regular driver
ferrying early in the morning office personnel to the company main
office in Pampanga and bringing back late in the afternoon to
Manila, and driving company executives for inspection of
construction workers to the jobsites. All told, we believe that the
complainant, under the environmental facts obtaining in the case at
bar, is a regular employee, the provisions of written agreement to
the  industry, provides:
contrary notwithstanding and regardless of the oral understanding
of the parties . . . 10
On the other hand, respondent NLRC declared that, as between the uncorroborated
and unsupported assertions of petitioners and those of private respondent which are
supported by documents, greater credence should be given the latter. It further held
that:
Complainant was hired in a specific project or undertaking as
driver. While such project was still on-going he was hired several
times with his employment period fixed every time his contract
was renewed. At the completion of the specific project or
undertaking his employment contract was not renewed.
We reiterate our ruling in the case of (Quiwa) vs. Philnor
Consultants and Planners, Inc., NLRC RAB III 5-1738-84, it is
being applicable in this case, viz.:
. . . While it is true that the activities performed
by him were necessary or desirable in the usual
business or trade of the respondent as
consultants, planners, contractor and while it is
also true that the duration of his employment was
for a period of about seven years, these
circumstances did not make him a 
regular employee in contemplation of Article 281
of (the) Labor Code. . . . 11
Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et
al.  12 is applicable to the case at bar. Thus:
We hold that private respondents were project employees whose
work was coterminous with the project or which they were hired.
Project employees, as distinguished from regular or non-project
employees, are mentioned in section 281 of the Labor Code as
those "where the employment has been fixed for a specific project
or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee."
Policy Instructions No. 20 of the Secretary of Labor, which was
issued to stabilize employer-employee relations in the construction
Project employees are those employed in
connection with a particular construction project.
Non-project (regular) employees are those
employed by a construction company without
reference to any particular project.
51
 Project employees are not entitled to termination
pay if they are terminated as a result of the
completion of the project or any phase thereof in
which they are employed, regardless of the
number of projects in which they have been
employed by a particular construction company.
Moreover, the company is not required to obtain
clearance from the Secretary of Labor in
connection with such termination.
The petitioner cited three of its own cases wherein the National
Labor Relations Commission, Deputy Minister of Labor and
Employment Inciong and the Director of the National Capital
Region held that the layoff of its project employees was lawful.
Deputy Minister Inciong in TFU Case No. 1530, In Re Sandoval
Shipyards, Inc. Application for Clearance to Terminate Employees,
rendered the following ruling on February 26, 1979;
We feel that there is merit in the contention of
the applicant corporation. To our mind, the
employment of the employees concerned were
fixed for a specific project or undertaking.For
the nature of the business the corporation is
engaged into is one which will not allow it to
employ workers for an indefinite period.
It is significant to note that the corporation does
not construct vessels for sale or otherwise which
will demand continuous productions of ships and
will need permanent or regular workers. It
merely accepts contracts for shipbuilding or for
repair of vessels form third parties and, only, on
occasion when it has work contract of this nature
that it hires workers to do the job which, needless
to say, lasts only for less than a year or longer.
The completion of their work or project
automatically terminates their employment, in
which case, the employer is, under the law, only
obliged to render a report on the termination of
the employment. (139-140, Rollo of G.R. No.
65689) (Emphasis supplied)
In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., 13 we likewise held
that:
As an electrical contractor, the private respondent depends for its
business on the contracts it is able to obtain from real estate
developers and builders of buildings. Since its work depends on the
availability of such contracts or "projects," necessarily the duration
of the employment's of this work force is not permanent but co-
terminus with the projects to which they are assigned and from
whose payrolls they are paid. It would be extremely burdensome
for their employer who, like them, depends on the availability of
projects, if it would have to carry them as permanent employees
and pay them wages even if there are no projects for them to work
on. (Emphasis supplied.)
It must be stressed herein that although petitioner worked with Philnor as a driver for
eight years, the fact that his services were rendered only for a particular project
which took that same period of time to complete categorizes him as a project
employee. Petitioner was employed for one specific project.
A non-project employee is different in that the employee is hired for more than one
project. A non-project employee, vis-a-vis a project employee, is best exemplified in
the case of Fegurin, et al. vs. National Labor Relations Commission, et
al.  14 wherein four of the petitioners had been working with the company for nine
years, one for eight years, another for six years, the shortest term being three years.
In holding that petitioners are regular employees, this Court therein explained:
Considering the nature of the work of petitioners, that of carpenter,
laborer or mason, their respective jobs would actually be
continuous and on-going. When a project to which they are
individually assigned is completed, they would be assigned to the
next project or a phase thereof. In other words, they belonged to a
"work pool" from which the company would draw workers for
assignment to other projects at its discretion. They are, therefore,
actually "non-project employees."
From the foregoing, it is clear that petitioner is a project employee considering that
he does not belong to a "work pool" from which the company would draw workers
for assignment to other projects at its discretion. It is likewise apparent from the facts
obtaining herein that petitioner was utilized only for one particular project, the
MNEE Stage 2 Project of respondent company. Hence, the termination of herein
petitioner is valid by reason of the completion of the project and the expiration of his
employment contract.
52
3. Anent the claim for overtime compensation, we hold that petitioner is entitled to
the same. The fact that he picks up employees of Philnor at certain specified points
along EDSA in going to the project site and drops them off at the same points on his
way back from the field office going home to Marikina, Metro Manila is not merely
incidental to petitioner's job as a driver. On the contrary, said transportation
arrangement had been adopted, not so much for the convenience of the employees,
but primarily for the benefit of the employer, herein private respondent. This fact is
inevitably deducible from the Memorandum of respondent company:
The herein Respondent resorted to the above transport arrangement
because from its previous project construction supervision
experiences, Respondent found out that project delays and
inefficiencies resulted from employees' tardiness; and that the
problem of tardiness, in turn, was aggravated by transportation
problems, which varied in degrees in proportion to the distance
between the project site and the employees' residence. In view of
this lesson from experience, and as a practical, if expensive,
solution to employees' tardiness and its concomitant problems,
Respondent adopted the policy of allowing certain employees —
not necessarily project drivers — to bring home project vehicles,
so that employees could be afforded fast, convenient and free
transportation to and from the project field office. . . . 15
Private respondent does not hesitate to admit that it is usually the project driver who
is tasked with picking up or dropping off his fellow employees. Proof thereof is the
undisputed fact that when petitioner is absent, another driver is supposed to replace
him and drive the vehicle and likewise pick up and/or drop off the other employees
at the designated points on EDSA. If driving these employees to and from the project
site is not really part of petitioner's job, then there would have been no need to find a
replacement driver to fetch these employees. But since the assigned task of fetching
and delivering employees is indispensable and consequently mandatory, then the
time required of and used by petitioner in going from his residence to the field office
and back, that is, from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00
p.m., which the labor arbiter rounded off as averaging three hours each working day,
should be paid as overtime work. Quintessentially, petitioner should be given
overtime pay for the three excess hours of work performed during working days
from January, 1983 to December, 1985.
WHEREFORE, subject to the modification regarding the award of overtime pay to
herein petitioner, the decision appealed from is AFFIRMED in all other respects.
SO ORDERED.
G.R. Nos. 64821-23. January 29, 1993.*
UNIVERSITY OF PANGASINAN FACULTY UNION,
petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
UNIVERSITY OF PANGASINAN, respondents.
Special Civil Actions; Mandamus; Petitioner must state fact with certainty.—
As succinctly provided in this section, anyone who wishes to avail of the remedy of
mandamus must state in a verified petition "the facts with certainty." On account of
this requirement, mandamus is never issued in doubtful cases and showing of a clear
and certain right on the part of the petitioner is required. Indeed, while the labor
arbiter is duty bound to resolve all complaints referred to him for arbitration and,
therefore, he may be compelled by mandamus to decide them (although not in any
particular way or in favor of anyone), we find that the peculiar circumstances in this
case do not merit the issuance of the writ of mandamus.
Labor Laws; Unions; Institution and prosecution of money claims for union
members.—Petitioner's contention that the cases filed by Consuelo Abad as its
president should affect, not only herself, but all the other union members similarly
situated as she was, is well taken. The uncontroverted allegation of the petitioner is
that it is the holder of Registration Certificate No. 9865-C, having been registered
with 
______________
*
 THIRD DIVISION.
66
66  SUPREME COURT REPORTS ANNOTATED 
University of Pangasinan Faculty Union vs. NLRC
the then Ministry of Labor and Employment on February 16, 1978. As such,
petitioner possessed the legal personality to sue and be sued under its registered
name. Corollarily, its president, Consuelo Abad, correctly filed the complaints even
if some of them involved rights and interest purely or exclusively appertaining to
individual employees, it appearing that she signed the complaints "for and in behalf
of the University of Pangasinan Faculty Union." The University's contention that
petitioner had no legal personality to institute and prosecute money claims must,
therefore, fail. To quote then Associate Justice Teehankee in Heirs of Teodelo M.
Cruz v. CIR, "[w]hat should be borne in mind is that the interest of the individual
worker can be better protected on the whole by a strong union aware of its moral and
legal obligations to represent the rank and file faithfully and secure for them the best
wages and working terms and conditions x x x." Although this was stated within the
context of collective bargaining, it applies equally well to cases, such as the present
wherein the union, through its president, presented its individual members'
grievances through proper proceedings. While the complaints might not have
disclosed the identities of the individual employees claiming monetary benefits, such
53
technical defect should not be taken against the claimants, especially because the
University appears to have failed to demand a bill of particulars during the
proceedings before the Labor Arbiter.
Same; Emergency cost of living allowances (ECOLA); Teachers;"No work, no
pay"principle not applicable.—But more apropos is the ruling of this Court
in University of Pangasinan Faculty Union v. University of Pangasinan and NLRC, a
case involving the same parties as in the instant petition and dealing with a complaint
filed by the petitioner on December 18, 1981 seeking, among others, the payment of
emergency cost of living allowances for November 7 to December 5, 1981, a
semestral break. The Court held therein: "x x x. The 'No work, no pay' principle does
not apply in the instant case. The petitioner's members received their regular salaries
during this period. It is clear from the x x x law that it contemplates a 'no work'
situation where the employees voluntarily absent themselves. Petitioners, in the case
at bar, certainly do not, ad voluntatem absent themselves during semestral breaks.
Rather, they are constrained to take mandatory leave from work. For this, they
cannot be faulted nor can they be begrudged that which is due them under the law.
To a certain extent, the private respondent can specify dates when no classes would
be held. Surely, it was not the intention of the framers of the law to allow employers
to withhold employee benefits by the simple expedient of unilaterally imposing 'no
work' days and conse-
67
VOL. 218, JANUARY 29, 1993  67  payment of salaries; and
University of Pangasinan Faculty Union vs. NLRC
quently avoiding compliance with the mandate of the law for those days."
PETITION for mandamus and certiorari to review the decision of the National Labor
Relations Commission.
The facts are stated in the opinion of the Court.
Tanopo & Serafica for petitioner.
Hermogenes S. Decano for private respondent.
ROMERO, J.:
In the instant petition for mandamus and certiorari, petitioner union seeks to enjoin
the respondent National Labor Relations Commission (NLRC) to resolve, or direct
the Labor Arbiter to hear and decide, the merits of three of petitioner's unresolved
complaints, and to annul and set aside the resolution of the NLRC affirming the
decision of the Executive Labor Arbiter dismissing the petitioner's complaints for
violation of certain labor standards laws but requiring respondent university to
integrate the cost of living allowance into the basic pay of the covered employees
and reminding it to pay its employees at intervals not exceeding sixteen (16) days.
The uncontroverted facts show that on various dates, petitioner filed the following
complaints against the University of Pangasinan (University for brevity) before the
Arbitration Branch of the NLRC in Dagupan City:
1. October 14, 1980: for nonpayment of benefits under P.D. No.
1713 and emergency cost of living allowance (ecola) to part-time
teachers, and for prompt and accurate computation of benefits
under P.D. No. 451 and the payment of ecolas;
2. November 7, 1980: for nonpayment of all ecolas to instructors
from October 18-31, 1980;
3. November 20, 1980: for nonpayment of ecolas under P.D. Nos.
525, 1123, 1614, 1634, 1678 and 1713 for November 1-15, 1980,
and extra loads during typhoons "Nitang" and "Osang" on July 21
and 25, 1980, respectively;
4. April 13, 1981: for violation of P.D. No. 1751 and nonpayment
of extra loads on February 12-13, 1980 (Anniversary celebration);
5. April 27, 1981: for nonpayment of all ecolas for April 1-15,
1981 to faculty members who were also members of the union;
6. May 21, 1981: for violation of Wage Order No. 1 and delayed
7. June 17, 1981: for nonpayment of salary differentials for
summer under P.D. No. 451.1
The Regional Director in San Fernando, La Union certified six (6) of these
complaints to Labor Arbiter Pedro Fernandez of the Dagupan City District Office of
the then Ministry of Labor and Employment for compulsory arbitration. 2 According
to the petitioner, it was made to understand by Fernandez that the seventh complaint
should also be discussed in its position paper. Accordingly, petitioner filed a position
paper discussing the merits of all the seven complaints. On the other hand, the
University limited its discussion to only four: the complaints filed on April 13, 1981,
April 27, 1981, May 21, 1981 and June 17, 1981. Petitioner was of the view that
Executive Labor Arbiter Sotero L. Tumang adopted the stand of the University on
the four complaints and accordingly dismissed them in his decision of January 25,
1982.3
Observing that in its position paper, the petitioner included matters which were
"beyond the scope of the issues alleged in the complaints," said Labor Arbiter
discussed the four complaints individually. On the April 13, 1981 complaint, he
ruled that because at the time P.D. No. 1123 took effect on May 1, 1977, the
University had not increased its tuition fees, there was of "nothing to
integrate."4 However, from June 16, 1979 when the University increased its tuition
54
fees, it was obligated to cause the integration of the across-the-board increase of
P60.00 in emergency allowance into the basic pay as mandated by P.D. Nos. 1123
and 1751.
On the alleged nonpayment of extra loads handled by the employees on February 12
and 13, 1981 when classes were suspended, Tumang stated that Consuelo Abad, the
petitioner's president, had no cause to complain because her salary was fully paid and
that, since there were "no complainants for the alleged nonpayment of extra loads for
two days," the issue had become academic.
With respect to the April 27, 1981 complaint, Tumang said that since the salary paid
to Consuelo Abad and other faculty members for the April 1-15, 1981 period had
been earned "as part of their salary for the ten-month period," she was no longer
entitled to an emergency cost of living allowance. He added that "payment of
emergency cost of living allowance is based on actual work performed except when
they (employees) are on leave with pay." Hence, because classes ended in March
1981, the teachers who did not report for work could not be considered on leave with
pay and, therefore, they were not entitled to an emergency cost of living allowance.
As regards the May 21, 1981 complaint alleging violation of Wage Order No. 1,
Tumang found that the University had actually implemented the additional living
allowance of P2.00 a day required therein. On the alleged delay in the payment of
salaries of the employees, he rationalized that delays could not be avoided but he
reminded the University to pay its employees on time.
The June 17, 1981 complaint was also resolved in favor of the University. Stating
that P.D. No. 451 which mandates salary increases is dependent on enrollment and
allowable deductions, Tumang ruled that, again, Consuelo Abad had no cause to
complain as she had been paid out of the allowable 12.74% for distribution which
was a "substantial compliance with P.D. No. 451." 5 The dispositive portion of the
decision states:
IN THE LIGHT OF THE FOREGOING CONSIDERATION, the
above-entitled cases are dismissed for lack of merit. Respondent
however, is required to integrate the allowance of P60.00 under
P.D. 1123 into the basic pay of the covered employees if the same
has not as yet been complied with. Respondent is also reminded to
pay the employees at intervals not exceeding sixteen (16) days
pursuant to Article 102 of the Labor Code.
SO ORDERED.
The petitioner appealed the said decision to the NLRC. In its resolution of June 20,
1993, the NLRC affirmed the decision of Executive Labor Article Tumang. Hence,
the instant petition for mandamus and certiorari with the following prayer:
WHEREFORE, the foregoing premises considered, it is
respectfully prayed that this petition be given due course and that
judgment issue:
1. Declaring petitioner as possessed with capacity to represent its
members in the complaints it filed thru its president, Miss
Consuelo Abad, against private respondent, and the complaints are
pertaining to the members who are entitled under the law to the
claims sought herein, not to Miss Abad alone;
2. Annulling and setting aside the appealed resolution insofar as
the issues of nonpayment of Ecola for April 1-15, 1981 and
nonpayment of salary differentials for summer of 1981 under P.D.
No. 451 are concerned;
3. Ordering private respondent to pay covered members of
petitioner their Ecola for April 1-15, 1981 and their salary
differentials for summer of 1981 pursuant to the mandate of P.D.
451;
4. Enjoining public respondent to resolve on the merits the issues
of nonpayment of extra loads of February 12-13, 1980 and
violation of Wage Order No. 1 which were properly brought on
appeal to said office;
5. Enjoining public respondent to resolve on the merits the issues
or grievances alleged in the complaints filed on October 14,
November 7 and November 20, all in 1980, which were not
resolved by the labor arbiter but nonetheless appealed to public
respondents, or
6. Enjoining public respondent to order or direct the labor arbiter to
resolve on the merits the said issues or grievances alleged in the
complaints mentioned in the next preceding paragraph;
7. Attorney's fee in such amount as this Honorable Tribunal may
deem just and reasonable in the premises;
55
 8. Ordering private respondent to pay costs of suit, including this
appeal.
Petitioner further prays for safeguards and/or measures to insure
the correct computation of the amount of claims herein sought due
to each covered member of petitioner, and for such other reliefs
just and equitable in the premises.6
We shall first deal with the propriety of the special civil action of mandamus. In this
regard, petitioner contends that the NLRC should have, in the exercise of its
appellate jurisdiction, resolved the issues raised in the three (3) complaints filed on
October 14, November 7 and November 20, 1980 or, in the alternative, ordered the
Labor Arbiter to hear and decide the aforementioned three (3) complaints, it having
the power of supervision over Labor Arbiters.
Sec. 3, Rule 65 of the Rules of Court provides:
Sec. 3. Petition for Mandamus. — When any tribunal, corporation,
board, or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an
office, trust, or station, or unlawfully excludes another from the use
and enjoyment of a right or office to which such other is entitled,
and there is no other plain, speedy and adequate remedy in the
ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court alleging the facts with certainty
and praying that judgment be rendered commanding the defendant,
immediately or at some other specified time, to do the act required
to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts
of the defendant.
As succinctly provided in this section, anyone who wishes to avail of the remedy
of mandamus must state in a verified petition "the facts with certainty." On account
of this requirement, mandamus is never issued in doubtful cases and showing of a
clear and certain right on the part of the petitioner is required. 7 Indeed, while the
labor arbiter is duty bound to resolve all complaints referred to him for arbitration
and, therefore, he may be compelled by mandamus to decide them (although not in
any particular way or in favor of anyone),8 we find that the peculiar circumstances in
this case do not merit the issuance of the writ of mandamus.
Petitioner admits that only six of the complaints were certified to Labor Arbiter
Fernandez for compulsory arbitration. It failed, however, to allege why this was the
case or whether it had exerted any effort to include the remaining complaint in the
certification. What it stresses is the alleged assurance of Labor Arbiter Fernandez
that the seventh complaint may be discussed in its position paper. It turned out,
however, that, according to the unrebutted allegation of the Solicitor General, Labor
Arbiter Fernandez inhibited himself from handling the cases referred to him as he
was teaching at the University. Hence, Labor Arbiter Fernandez forwarded the
complaints to the Assistant Director for Arbitration in Regional Office No. 1 in San
Fernando, La Union for appropriate action. He should have forwarded all of the
complaints to the said Assistant Director, but it appears that Fernandez turned over
only four of them. In turn, the Assistant Director referred only complaints Nos. 5, 6
and 7, which had been docketed as RBI-C-24-81, LS-42-81 and LS-43-81, to
Executive Labor Arbiter Sotero L. Tumang for compulsory arbitration. However,
while only these three docket numbers appear on the caption of the decision, the
same actually resolved four complaints, as earlier mentioned. 9
From these facts, one may infer that there must have been a mishandling of the
complaints and/or the records of the cases. However, the petitioner failed to
substantiate by evidence such negligence on the part of the public respondents as to
warrant the issuance of a writ of mandamus. 10 Its officials even neglected the simple
act of verifying from the MOLE office in Dagupan City whether the records of all
the cases filed had been forwarded to the proper official who should resolve
them. 11 Infact, nowhere in its pleadings 12 is there an allegation to that effect.
On the contrary, the petitioner took Fernandez' words seriously and allowed the
proceedings to reach its inevitable conclusion. When it received a copy of the
decision, the petitioner should have taken note of Executive Labor Arbiter Tumang's
observation therein that it had discussed matters "beyond the scope of the issues
alleged in the complaints." In its memorandum of appeal, it should have prayed for
the inclusion of the three complaints inasmuch as in labor cases, an appeal may be
treated as a motion for reconsideration or
vice-versa. 13 The fact that three complaints had been omitted did not escape the
attention of the NLRC which stated in its resolution that "since those cases were not
consolidated it is now too late to consolidate them" with the four decided
cases. 14 We agree with the NLRC that the said complaints should proceed separately
as long as their resolution would not conflict with the resolved
cases.15 It should be added that under Art. 217(b) of the Labor Code, the NLRC has
"exclusive appellate jurisdiction over all cases decided by the Labor Arbiters."
Needless to say, the NLRC could not have acted on matters outside of the cases
appealed to it.
Petitioner's contention that the cases filed by Consuelo Abad as its president should
affect, not only herself, but all the other union members similarly situated as she was,
is well taken. The uncontroverted allegation of the petitioner is that it is the holder of
Registration Certificate No. 9865-C, having been registered with the then Ministry of
Labor and Employment on February 16, 1978. As such, petitioner possessed the
legal personality to sue and be sued under its registered name.16 Corollarily, its
56
president, Consuelo Abad, correctly filed the complaints even if some of them
involved rights and interest purely or exclusively appertaining to individual
employees, it appearing that she signed the complaints "for and in behalf of the
University of Pangasinan Faculty Union."17
The University's contention that petitioner had no legal personality to institute and
prosecute money claims must, therefore, fail. To quote then Associate Justice
Teehankee in Heirs of Teodelo M. Cruz v. CIR,18 "[w]hat should be borne in mind is
that the interest of the individual worker can be better protected on the whole by a
strong union aware of its moral and legal obligations to represent the rank and file
faithfully and secure for them the best wages and working terms and conditions. . . .
Although this was stated within the context of collective bargaining, it applies
equally well to cases, such as the present wherein the union, through its president,
presented its individual members' grievances through proper proceedings. While the
complaints might not
have disclosed the identities of the individual employees claiming monetary
benefits,19 such technical defect should not be taken against the claimants, especially
because the University appears to have failed to demand a bill of particulars during
the proceedings before the Labor Arbiter.
On the merits of the petition, the NLRC did not abuse its discretion in resolving the
appeal from the decision of Executive Labor Arbiter Tumang except for the
disallowance of the emergency cost of living allowance to members of the petitioner.
The Rules Implementing P.D. No. 1713 which took effect on August 18, 1980
provide:
Sec. 6. Allowances of full-time and part-time employees. —
Employees shall be paid in full the monthly allowance on the basis
of the scales provided in Section 3 hereof, regardless of the number
of their regular working days if they incur no absences during the
month. If they incur absences without pay, the amounts
corresponding to the absences may be deducted from the monthly
allowance provided that in determining the equivalent daily
allowance of such deduction, the applicable monthly allowance
shall be divided by thirty (30) days.
xxx xxx xxx
(Emphasis supplied).
This Section, which is a virtual reproduction of Section 12 of the old Rules
Implementing P.D. No. 1123, has been interpreted by this Court as requiring that the
full amount of the cost of living allowance mandated by law should be given
monthly to each employee if the latter has worked continuously for each month,
regardless of the number of the regular working days.20 But more apropos is the
ruling of this Court in University of Pangasinan Faculty Union v. University of
Pangasinan and NLRC,21 a case involving the same parties as in the instant petition
and dealing with a complaint filed by the petitioner on December 18, 1981 seeking,
among others, the payment of emergency cost of living allowances for November 7
to December 5, 1981, a semestral break. The Court held therein:
. . . The "No work, no pay" principle does not apply in the instant
case. The petitioner's members received their regular salaries
during this period. It is clear from the . . . law that it contemplates a
"no work" situation where the employees voluntarily absent
themselves. Petitioners, in the case at bar, certainly do not, ad
voluntatem absent themselves during semestral breaks. Rather,
they are constrained to take mandatory leave from work. For this,
they cannot be faulted nor can they be begrudged that which is due
them under the law. To a certain extent, the private respondent can
specify dates when no classes would be held. Surely, it was not the
intention of the framers of the law to allow employers to withhold
employee benefits by the simple expedient of unilaterally imposing
"no work" days and consequently avoiding compliance with the
mandate of the law for those days.
As interpreted and emphasized in the same case, the law granting emergency cost of
living allowances was designed to augment the income of the employees to enable
them to cope with the rising cost of living and inflation. Clearly, it was enacted in
pursuance of the State's duty to protect labor and to alleviate the plight of the
workers. To uphold private respondent's interpretation of the law would be running
counter to the intent of the law and the Constitution.
WHEREFORE, the petition for mandamus is hereby DISMISSED. The decision of
the NLRC is AFFIRMED subject to the MODIFICATION that private respondent
University of Pangasinan shall pay its regular and fulltime teachers and employees
emergency cost of living allowance for the period April 1-15, 1981. Costs against
private respondent.
No. L-17068. December 30, 1961.
NATIONAL SHIPYARDS AND STEEL CORPORATION,
petitioner, vs. COURT OF INDUSTRIAL RELATIONS and DOMINADOR
MALONDRAS, respondents.
Employer and employee; Sailors; Overtime compensation;Criterion in
determining.—The correct criterion in determining whether or not sailors are entitled
to overtime pay is not whether they were on board and can not leave ship beyond the
regular eight working hours a day, but whether they actually rendered service in
57
excess of said number of hours. (Luzon Stevedoring Co., Inc. vs. Luzon Marine
Department Union, et al., L-9265, April 29, 1957).
Same; Same; Same; Subsistence allowance not deductible—Inasmuch as the
stipulation of facts of the parties show that the subsistence allowance is independent
of and has nothing to do with whatever additional compensation for overtime work
was due the petitioner, the same should not be deducted from his overtime
compensation.
PETITION for review by certiorari of the orders of the Court of Industrial Relations.
The facts are stated in the opinion of the Court.
     N. C. Virata for petitioner.
     Mariano B. Tuason for respondent Court.
     Manuel P. Calanog for respondent Dominador Malondras.
REYES, J.B.L., J.:
Petition filed by the National Shipyards and Steel Corporation (otherwise known as
the NASSCO) to review certain orders of the respondent Court of Industrial
Relations requiring it to pay its bargeman Dominador Malondras overtime service of
16 hours a day for a period from January 1, 1954 to December 31, 1956, and from
January 1, 1957 to April 30, 1957, inclusive.
The petitioner NASSCO, a government-owned and controlled corporation, is the
owner of several barges and tugboats used in the transportation of cargoes and
personnel in connection with its business of shipbuilding and repair. In order that its
bargeman could immediately be called to duty whenever their services are needed,
they are required to stay in their respective barges, for which reason they are given
living quarters therein as well as subsistence allowance of P1.50 per day during the
time they are on board. However, upon prior authority of their superior officers, they
may leave their barges when said barges are idle.
On April 15, 1957, 39 crew members of petitioner's tugboat service, including
therein respondent Dominador Malondras, filed with the Industrial Court a complaint
for the payment of overtime compensation (Case No. 1059-V). In the course of the
proceeding, the parties entered into a stipulation of facts wherein the NASSCO
recognized and admitted —
4. That to meet the exigencies of the service in the performance of the above
work, petitioners have to work when so required in excess of eight (8) hours
a day and/or during Sundays and legal holidays (actual overtime service is
subject to determination on the basis of the logbook of the vessels, time
sheets and other pertinent records of the respondent).
x x x           x x x          x x x
6. The petitioners are paid by the respondent their regular salaries and
subsistence allowance, without additional compensation for overtime work;
Pursuant to the above stipulation, the Industrial Court, on November 22, 1957, issued
an order directing the court examiner to compute the overtime compensation due the
claimants.
On February 14, 1958, the court examiner submitted his report covering the period
from January 1 to December 31, 1957. In said report, the examiner found that the
petitioners in Case No. 1058-V, including herein respondent Dominador Malondras,
rendered an average overtime service of five (5) hours each day for the period
aforementioned, and upon approval of the report by the Court, all the claimants,
including Malondras, were paid their overtime compensation by the NASSCO.
Subsequently, on April 30, 1958, the court examiner submitted his second partial
report covering the period from January 1, 1954 to December 31, 1956, again giving
each crewman an average of five (5) overtime hours each day. Respondent
Malondras was not, however, included in this report as his daily time sheets were not
then available. Again upon approval by the Court, the crewmen concerned were paid
their overtime compensation.
Because of his exclusion from the second report of the examiner, and his time sheets
having been located in the meantime, Dominador Malondras, on September 18,
1959, filed petitions in the same case asking for the compensation and payment of
his overtime compensation for the period from January 1, 1954 to December 31,
1956, and from January to April 30, 1957 which, he alleged, was not included in the
first report of the examiner because his time sheets for these months could not be
found at the time. Malondras' petition was opposed by the NASSCO upon the
argument, among others, that its records do not indicate the actual number of
working hours rendered by Malondras during the periods in question. Acting on the
petition and opposition, the Industrial Court ordered the examiner to examine the log
books, daily time sheets, and other pertinent records of the corporation for the
purpose of determining and computing whatever overtime service Malondras had
rendered from January 1, 1954 to December 31, 1956.
On January 15, 1960, the chief examiner submitted a report crediting Malondras with
a total of 4,349 overtime hours from January 1, 1954 to December 31, 1956, at an
average of five (5) overtime hours a day, and after deducting the aggregate amount
of subsistence allowance received by Malondras during this period, recommended
the payment to him of overtime compensation in the total sum of P2,790.90.
58
On February 20, 1960, the Court ordered the examiner to make a re-examination of
the records with a view to determining Malondras' overtime service from January 1,
1954 to December 31, 1956, and from January 1, 1957 to April 30, 1957, but without
deducting from the compensation to be paid to him his subsistence allowance.
Pursuant to this last order, the examiner, on April 23, 1960, submitted an amended
report giving Malondras an average of sixteen (16) overtime hours a day, on the
basis of his time sheets, and recommending the payment to him of the total amount
of P15,242.15 as overtime compensation during the periods covered by the report.
This report was, over the NASSCO's vigorous objections, approved by the Court
below on May 6, 1960. The NASSCO moved for reconsideration, which was denied
by the Court en banc, with one judge dissenting. Whereupon, the NASSCO appealed
to this Court.
There appears to be no question that respondent Malondras actually rendered
overtime services during the periods covered by the examiner's report. This is
admitted in the stipulation of facts of the parties in Case No. 1058-V; and it was on
the basis of this admission that the Court below, in its order of November 22, 1957,
ordered the payment of overtime compensation to all the petitioners in Case No.
1058-V, including respondent Dominador Malondras, after the overtime service
rendered by them had been determined and computed on the basis of the log books,
time sheets and other pertinent records of the petitioner corporation.
The only matter to be determined here is, therefore, the number of hours of overtime
for which Malondras should be paid for the periods January 1, 1954 to December 31,
1956, and from January to April 30, 1957. Respondents urge that this is a question of
fact and not subject to review by this Court, there being sufficient evidence to
support the Industrial Court's ruling on this point. It appears, however, that in
crediting Malondras with 16 hours of overtime service daily for the periods in
question, the court examiner relied only on his daily time sheets which, although
approved by petitioner's officers in charge and its auditors, do not show the actual
number of hours of work rendered by him each day but only indicate, according to
the examiner himself, that:
almost everyday Dominador Malondras was on "Detail" or "Detailed on
Board". According to the officer in charge of Dominador Malondras, when
he (Dominador Malondras) was on "Detail" or "Detailed on Board", he was
in the boat for twenty-four (24) hours.
In other words, the court examiner interpreted the words "Detail" or "Detailed on
Board" to mean that as long as respondent Malondras was in his barge for twenty-
four hours, he should be paid overtime for sixteen hours a day or the time in excess
of the legal eight working hours that he could not leave his barge. Petitioner
NASSCO, upon the other hand, argues that the mere fact that Malondras was
required to be on board his barge all day so that he could immediately be called to
duty when his services were needed does not imply that he should be paid overtime
for sixteen hours a day, but that he should receive compensation only for the actual
service in excess of eight hours that he can prove. This question is clearly a legal one
that may be reviewed and passed upon by this Court.lawphil.net
We can not agree with the Court below that respondent Malondras should be paid
overtime compensation for every hour in excess of the regular working hours that he
was on board his vessel or barge each day, irrespective of whether or not he actually
put in work during those hours. Seamen are required to stay on board their vessels by
the very nature of their duties, and it is for this reason that, in addition to their regular
compensation, they are given free living quarters and subsistence allowances when
required to be on board. It could not have been the purpose of our law to require their
employers to pay them overtime even when they are not actually working; otherwise,
every sailor on board a vessel would be entitled to overtime for sixteen hours each
day, even if he had spent all those hours resting or sleeping in his bunk, after his
regular tour of duty. The correct criterion in determining whether or not sailors are
entitled to overtime pay is not, therefore, whether they were on board and can not
leave ship beyond the regular eight working hours a day, but whether they actually
rendered service in excess of said number of hours. We have ruled to that effect
in Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union, et al., L-9265,
April 29, 1957:
I. Is the definition for "hours of work" as presently applied to dryland
laborers equally applicable to seamen? Or should a different criterion be
applied by virtue of the fact that the seaman's employment is completely
different in nature as well as in condition of work from that of a dryland
laborer?
x x x           x x x          x x x
Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor
Law, provides:
"SEC. 1. The legal working day for any person employed by
another shall be of not more than eight hours daily. When the work
is not continuous, the time during which the laborer is not working
AND CAN LEAVE HIS WORKING PLACE and can rest
completely, shall not be counted."
The requisites contained in this section are further implemented by
contemporary regulations issued by administrative authorities (Sections 4
and 5 of Chapter III, Article 1, Code of Rules and Regulations to implement
the Minimum Wage Law).
59
 For the purposes of this case, we do not need to set for seamen a criterion
different from that applied to laborers on land, for under the provisions of
the above quoted section, the only thing to be done is to determine the
meaning and scope of the term "working place" used therein. As we
understand this term, a laborer need not leave the premises of the factory
shop or boat in order that his period of rest shall not be counted, it being
enough that he "cease to work", may rest completely and leave or may
leave at his will the spot where he actually stays while working, to go
somewhere else, whether within or outside the premises of said factory,
shop or boat. If these requisites are complied with, the period of such rest
shall not be counted. (Emphasis supplied)
While Malondras' daily time sheets do not show his actual working hours,
nevertheless, petitioner has already admitted in the Stipulation of Facts in this case
that Malondras and his co-claimants did render service beyond eight (8) hours a day
when so required by the exigencies of the service; and in fact, Malondras was
credited and already paid for five (5) hours daily overtime work during the period
from May 1 to December 31, 1957, under the examiner's first report. Since
Malondras has been at the same job since 1954, it can be reasonably inferred that the
overtime service he put in whenever he was required to be aboard his barge all day
from 1954 to 1957 would be more or less consistent. In truth, the other claimants
who served with Malondras under the same conditions and period have been finally
paid for an overtime of 5 hours a day, and no substantial difference exists between
their case and the present one, which was not covered by the same award only
because Malondras' time records not found until later.
was appointed in the tubgoat service only on October 1, 1954, and before that was a
derrick man with a daily salary of P6.00. In answer, respondent Malondras asserts
that the report of the examiner, based on his time sheets from January 1, 1954, show
that he had already been rendering overtime service from that date. This answer does
not, however, deny that Malondras started to get P6.16 a day only in October, 1954,
and was before that time receiving only P6.00 daily, as claimed by petitioner. We
think, therefore, that the records should be reexamined to find out Malondras' exact
daily wage from January 1, 1954 to September, 1954, and his overtime compensation
for these months computed on the basis thereof.
WHEREFORE, the order appealed from is modified in the sense that respondent
Malondras should be credited five (5) overtime hours instead of sixteen (16) hours a
day for the periods covered by the examiner's report. The court below is ordered to
determine from the records the exact daily wage received by respondent Malondras
from January 1, 1954 to September, 1954, and to compute accordingly his overtime
compensation for that period. In all other respects, the judgment appealed from is
affirmed. No costs in this instance. So ordered.

The next question is whether or not the subsistence allowance received by Malondras
for the periods covered by the report in question should be deducted from his
overtime compensation. We do not think so, for the Stipulation of the Facts of the
parties show that this allowance is independent of and has nothing to do with
whatever additional compensation for overtime work was due the petitioner
NASSCO's bargemen. According to the petitioner itself, the reason why their
bargemen are given living quarters in their barges and subsistence allowance at the
rate of P1.50 per day was because they were required to stay in their respective
barges in order that they could be immediately called to duty when their services
were needed (Petition, par. 5, p. 2). Petitioner having already paid Malondras and his
companions overtime for 1957 without deduction of the subsistence allowances
received by them during this period, and Malondras' companions having been paid
overtime for the other years also without deducting their subsistence allowances,
there is no valid reason why Malondras should be singled out now and his
subsistence allowance deducted from the overtime compensation still due him.

The last question involves petitioner's claim that it was error for the examiner to base
Malondras' overtime compensation for the whole year 1954 at P6.16 a day, when he

60