Caption:

Title of the case: Linton Commercial Co. vs Hellera

Citation: G.R. No. 163147
Date Promulgated: October 10, 2007
Respondents: ALEX A. HELLERA, FRANCISCO RACASA, DANTE ESCARLAN,
DONATO SASA, RODOLFO OLINAR, DANIEL CUSTODIO, ARTURO POLLO, ROBERT
OPELIÑA, B. PILAPIL, WINIFREG BLANDO, JUANITO GUILLERMO, DONATO
BONETE, ISAGANI YAP, CESAR RAGONON, BENEDICTO ILAGAN, REXTE
SOLANOY, RODOLFO LIM, ERNESTO ALCANTARA, DANTE DUMAPE, FELIPE
CAGOCO, JR., JOSE NARCE, NELIO CANTIGA, QUIRINO C. ADA, MANUEL BANZON,
JOEL F. ADA, SATPARAM ELMER, ROMEO BALAIS, CLAUDIO S. MORALES, DANILO
NORLE, LEONCIO RACASA, NOEL LEONCIO RACASA, NOEL ACEDILLA, ELPIDIO E.
VERGABINIA, JR., CONRADO CAGOCO, ROY BORAGOY, EDUARDO GULTIA,
REYNALDO SANTOS, LINO VALENCIA, ROY DURANO, LEO VALENCIA, ROBERTO
BLANDO, JAYOMA A., NOMER ALTAREJOS, RAMON OLINAR III, SATURNINO C.
EBAYA, FERNANDO R. REBUCAS, NICANOR L. DE CASTRO, EDUARDO GONZALES,
ISAGANI GONZALES, THOMAS ANDRAB, JR., MINIETO DURANO, ERNESTO
VALLENTE, NONITO I. DULA, NESTOR M. BONETE, JOSE SALONOY, ALBERTO
LAGMAN, ROLANDO TORRES, ROLANDO TOLDO, ROLINDO CUALQUIERA,
ARMANDO LIMA, FELIX D. DUMARE, ALFREDO SELAPIO, MARTIN V.
VILLACAMPA, JR., CARLITO PABLE, DANTE ESCARLAN, M. DURANO, RAMON
ROSO, LORETA RAFAEL, and ELEZAR MELLEJOR
Petitioners: LINTON COMMERCIAL CO., INC. and DESIREE ONG
Ponente: Associate Justice Dante O. Tinga

Facts:

Linton is a domestic corporation engaged in the business of importation, wholesale, retail and
fabrication of steel and its by-products.

On December 17, 1997, Linton have issued a memorandum addressed to its employees notifying
them that the company decided to suspend its operations from December 18, 1997 to January 5,
1998 due to the currency crisis. Linton submitted an establishment termination report to the
Department of Labor and Employment concerning the temporary closure which will resume on
January 6, 1998.
On January 7, 1997, Linton have issued another memorandum stating that each worker would be
working on a rotation basis for three working days only instead of six days a week, in which he
later on submitted a report regarding the establishment termination. Linton implemented the new
policy without waiting for the approval of DOLE.

On July 17, 1998, sixty-eight workers filed a complaint for illegal reduction of workdays with
the Arbitration Branch of the NLRC.

On 28 January 2000, the Labor Arbiter rendered a decision, finding petitioners guilty of illegal
reduction of work hours and directing them to pay each of the workers their three (3)
days/weeks’ worth of work compensation from 12 January 1998 to 13 July 1998. Following, the
petitioners appealed to the NLRC.

Issue:

Whether or not Linton committed illegal reduction of work hours

Ruling:

In the petitioners; financial reports for 1997-1998 it indicated that even though the company
suffered a loss of P3,645,422.00 in 1997, it retained a considerable amount of earnings and
operating income. Thus, there was enough earnings to sufficiently sustain its operations. The
management prerogative must be exercised in good faith and with due regard to the rights of
labor.

The Court ruled that the compressed work week arrangement was unjustified and illegal. Hence,
the petitioners committed illegal reduction of work hours. The petition is granted in part.
Petitioners are hereby, ordered to pay respondents, except the 21 workers who executed waivers
and quitclaims, the monetary award as computed, pursuant to the decision of the Labor Arbiter.