CASE 1 FIELD PERSONNEL

G.R. No. 160325             October 4, 2007

ROQUE S. DUTERTE, petitioner, vs. KINGSWOOD TRADING CO., INC., FILEMON
LIM and NATIONAL LABOR RELATIONS COMMISSION, respondents.

FACTS: Petitioner was hired as truck/trailer driver by respondent. When not

driving, petitioner was assigned to clean and maintain respondent KTC’s equipment and
vehicles for which he was paid P125 per day. On November 8, 1998, petitioner had his
first heart attack and was confined for two weeks. A month later, petitioner returned to
work but the respondents refused to allow petitioner to work. He suffered another heart
attack. In June 1999, petitioner attempted to report back to work but was told to look for
another job because he was unfit. Respondents refused to declare petitioner fit to work
unless physically examined by the company physician. Petitioner filed against his
employer a complaint for illegal dismissal and damages.

ISSUE: (1) whether the dismissal was valid

(2) whether petitioner is entitled to benefits under Articles 94 and 95 of the Labor
Code, such as holiday pay and service incentive leave pay. 

RULING: (1) No.

The law is unequivocal: the employer, before it can legally dismiss its employee on the
ground of disease, must adduce a certification from a competent public authority that
the disease of which its employee is suffering is of such nature or at such a stage that it
cannot be cured within a period of six months even with proper treatment.
Here, the record does not contain the required certification. And when the respondents
asked the petitioner to look for another job because he was unfit to work, such unilateral
declaration, even if backed up by the findings of its company doctors, did not meet the
quantum requirement mandated by the law, i.e., there must be a certification by a
competent public authority.

(2) Yes.
The Court notes that the NLRC, as sustained by the CA, considered the petitioner as a
field worker and, on that basis, denied his claim for benefits under Articles 94 and 95 of
the Labor Code, such as holiday pay and service incentive leave pay. 
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 employer. Thus, to determine 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.

Guided by the foregoing norms, petitioner was definitely a regular employee of

respondent company and not its field personnel, as the term is used in the Labor Code.
As it were, he was based at the principal office of the respondent company. His actual
work hours, i.e., from 6:00 a.m. to 6:00 p.m., were ascertainable with reasonable
certainty. He averaged 21 trips per month. And if not driving for the company, he was
paid P125.00 per day for cleaning and maintaining KTC’s equipment. Not falling under
the category of field personnel, petitioner is consequently entitled to both holiday pay
and service incentive leave pay, as mandated by Articles 94 and 95 of the Labor Code.
 
CASE 2 FIELD PERSONNEL

G.R. No. 156367             May 16, 2005

AUTO BUS TRANSPORT SYSTEMS, INC., petitioner,
vs.
ANTONIO BAUTISTA, respondent.

FACTS: Respondent Bautista has been employed by petitioner as driver-conductor

and was paid on commission basis, seven percent (7%) of the total gross income per
travel, on a twice a month basis. One day, thmamat caemle 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.
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.
Respondent instituted a Complaint for Illegal Dismissal with Money Claims for
nonpayment of 13th month pay and service incentive leave pay against Autobus.

ISSUE: Whether respondent is entitled to SIL pay, and if so, whether it has
prescribed

RULING: Respondent is entitled.

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.

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.

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.

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.

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 dismissal, necessarily, his money
claim was filed within the prescriptive period provided for by Article 291 of the Labor
Code.
 
CASE 3 FIELD PERSONNEL

G.R. No. 162813             February 12, 2007

FAR EAST AGRICULTURAL SUPPLY, INC. and/or ALEXANDER UY, Petitioners,
vs.
JIMMY LEBATIQUE and THE HONORABLE COURT OF APPEALS, Respondents.

FACTS: Petitioner hired private respondent Jimmy Lebatique as truck driver.

Lebatique complained of nonpayment of overtime work particularly on January 22,
2000, when he was required to make a second delivery in Novaliches, Quezon City.
That same day, he was suspended for illegal use of company vehicle. Even so,
Lebatique reported for work the next day but he was prohibited from entering the
company premises. He was later asked why he was claiming overtime pay. Lebatique
explained that he had never been paid for overtime work since he started working for
the company. He also told Alexander that Manuel had fired him. After talking to Manuel,
Alexander terminated Lebatique and told him to look for another job.  Lebatique filed a
complaint for illegal dismissal and nonpayment of overtime pay.

ISSUE: Whether Lebatique is entitled to overtime pay

RULING: Yes.

As correctly found by the Court of Appeals, Lebatique is not a field personnel as

defined above for the following reasons: (1) company drivers, including Lebatique, are
directed to deliver the goods at a specified time and place; (2) they are not given the
discretion to solicit, select and contact prospective clients; and (3) Far East issued a
directive that company drivers should stay at the client’s premises during truck-ban
hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m. Even petitioners admit that
the drivers can report early in the morning, to make their deliveries, or in the afternoon,
depending on the production of animal feeds.

Drivers, like Lebatique, are under the control and supervision of management officers.
Lebatique, therefore, is a regular employee whose tasks are usually necessary and
desirable to the usual trade and business of the company. Thus, he is entitled to the
benefits accorded to regular employees of Far East, including overtime pay and service
incentive leave pay.

Note that all money claims arising from an employer-employee relationship shall be filed
within three years from the time the cause of action accrued; otherwise, they shall be
forever barred. Lebatique timely filed his claim for service incentive leave pay,
considering that in this situation, the prescriptive period commences at the time he was
terminated. On the other hand, his claim regarding nonpayment of overtime pay since
he was hired in March 1996 is a different matter. In the case of overtime pay, he can
only demand for the overtime pay withheld for the period within three years preceding
the filing of the complaint on March 20, 2000.
 
CASE 4 RETIREMENT PAY

G.R. No. 187698               August 9, 2010

RODOLFO J. SERRANO, Petitioner,
vs.
SEVERINO SANTOS TRANSIT and/or SEVERINO SANTOS, Respondents.

FACTS: Petitioner was hired as bus conductor by respondent. After 14 years of

service, petitioner applied for optional retirement from the company whose
representative advised him that he must first sign the already prepared Quitclaim before
his retirement pay could be released. As petitioner’s request to first go over the
computation of his retirement pay was denied, he signed the Quitclaim on which he
wrote "U.P." (under protest) after his signature, indicating his protest to the amount of
₱75,277.45 which he received, computed by the company at 15 days per year of
service.

Petitioner soon after filed a complaint alleging that the company erred in its computation
since under Republic Act No. 7641, otherwise known as the Retirement Pay Law, his
retirement pay should have been computed at 22.5 days per year of service to include
the cash equivalent of the 5-day service incentive leave (SIL) and 1/12 of the 13th
month pay which the company did not. The company maintained, however, that the
Quitclaim signed by petitioner barred his claim and, in any event, its computation was
correct since petitioner was not entitled to the 5-day SIL and pro-rated 13th month pay
for, as a bus conductor, he was paid on commission basis. 

ISSUE: Whether the cash equivalent of the 5-day service incentive leave (SIL) and
1/12 of the 13th month pay of petitioner is included in the computation of his retirement
pay

RULING: Yes.

Republic Act No. 7641 which was enacted on December 9, 1992 amended
Article 287 of the Labor Code by providing for retirement pay to qualified private sector
employees in the absence of any retirement plan in the establishment. 

Admittedly, the petitioner worked for 14 years for the bus company which did not adopt
any retirement scheme. Even if petitioner as bus conductor was paid on commission
basis then, he falls within the coverage of R.A. 7641 and its implementing rules. As thus
correctly ruled by the Labor Arbiter, petitioner’s retirement pay should include the cash
equivalent of the 5-day SIL and 1/12 of the 13th month pay.
It bears emphasis that under P.D. 851 or the SIL Law, the exclusion from its coverage
of workers who are paid on a purely commission basis is only with respect to field
personnel.
 
CASE 5 COMPENSABLE HOURS OF WORK

G.R. No. 78210 February 28, 1989

TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO
OMERTA, GIL TANGIHAN, SAMUEL LABAJO, NESTOR NORBE, RODOLFO
CONCEPCION, RICARDO RICHA, RODOLFO NENO, ALBERTO BALATRO,
BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL,
RAMON ACENA, JAIME BUGTAY, and 561 OTHERS, HEREIN REPRESENTED BY
KORONADO B. APUZEN, petitioners
vs.
NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON,
HONORABLE CONRADO B. MAGLAYA, HONORABLE ROSARIO B.
ENCARNACION, and STANDARD (PHILIPPINES) FRUIT CORPORATION,
respondents.

FACTS: This case stemmed from a complaint filed against private respondent
STANFILCO for assembly time, moral damages and attorney's fees. Petitioners contend
that the preliminary activities as workers of respondents STANFILCO in the assembly
area is compensable as working time (from 5:30 to 6:00 o'clock in the morning) since
these preliminary activities are necessarily and primarily for private respondent's benefit.

These preliminary activities of the workers are as follows:

(a) First there is the roll call. This is followed by getting their individual
work assignments from the foreman.
(b) Thereafter, they are individually required to accomplish the Laborer's
Daily Accomplishment Report during which they are often made to explain about
their reported accomplishment the following day.
(c) Then they go to the stockroom to get the working materials, tools and
equipment.
(d) Lastly, they travel to the field bringing with them their tools, equipment
and materials.

ISSUE: Whether the 30-minute activity of the petitioners before the scheduled
working time is compensable under the Labor Code

RULING: No.

As held by the Minister of Labor, the thirty (30)-minute assembly time long practiced and
institutionalized by mutual consent of the parties under their CBA cannot be considered
as waiting time within the purview of Section 5, Rule I, Book III of the Rules and
Regulations Implementing the Labor Code.
Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of
the employees, and the proceedings attendant thereto are not infected with complexities
as to deprive the workers the time to attend to other personal pursuits. They are not
new employees as to require the company to deliver long briefings regarding their
respective work assignments. Their houses are situated right on the area where the
farm are located, such that after the roll call, which does not necessarily require the
personal presence, they can go back to their houses to attend to some chores. In short,
they are not subject to the absolute control of the company during this period,
otherwise, their failure to report in the assembly time would justify the company to
impose disciplinary measures. The CBA does not contain any provision to this effect;
the record is also bare of any proof on this point. This, therefore, demonstrates the
indubitable fact that the thirty (30)-minute assembly time was not primarily intended for
the interests of the employer, but ultimately for the employees to indicate their
availability or non-availability for work during every working day.
 
CASE 6 BURDEN OF PROVING PAYMENT OF BENEFITS

G.R. No. 173648               January 16, 2012

ABDULJUAHID R. PIGCAULAN,* Petitioner,
vs.
SECURITY and CREDIT INVESTIGATION, INC. and/or RENE AMBY REYES,
Respondents.

FACTS: Canoy and Pigcaulan were both employed by SCII as security guards.
Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate
complaints for underpayment of salaries and non-payment of overtime, holiday, rest
day, service incentive leave and 13th month pays. Respondents, however, maintained
that Canoy and Pigcaulan were paid their just salaries and other benefits under the law;
that the salaries they received were above the statutory minimum wage for security
guards; that their holiday pay were already included in the computation of their monthly
salaries; that they were paid additional premium of 30% in addition to their basic salary
whenever they were required to work on Sundays and 200% of their salary for work
done on holidays; and, that Canoy and Pigcaulan were paid the corresponding 13th
month pay for the years 1998 and 1999. 

In support thereof, copies of payroll listings and lists of employees who received their
13th month pay for the periods December 1997 to November 1998 and December 1998
to November 1999 were presented. In addition, respondents contended that Canoy’s
and Pigcaulan’s monetary claims should only be limited to the past three years of
employment pursuant to the rule on prescription of claims.

ISSUE: Whether respondent has sufficiently proven that it has paid the benefits
claimed by petitioner

RULING: No.

Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he
does not work. Likewise, express provision of the law entitles him to service incentive
leave benefit for he rendered service for more than a year already. Furthermore, under
Presidential Decree No. 851, he should be paid his 13th month pay. As employer, SCII
has the burden of proving that it has paid these benefits to its employees.

SCII presented payroll listings and transmittal letters to the bank to show that Canoy
and Pigcaulan received their salaries as well as benefits which it claimed are already
integrated in the employees’ monthly salaries. However, the documents presented do
not prove SCII’s allegation. SCII failed to show any other concrete proof by means of
records, pertinent files or similar documents reflecting that the specific claims have been
paid. With respect to 13th month pay, SCII presented proof that this benefit was paid
but only for the years 1998 and 1999. 

To repeat, the burden of proving payment of these monetary claims rests on SCII, being
the employer. It is a rule that one who pleads payment has the burden of proving it.
"Even when the plaintiff alleges non-payment, still the general rule is that the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove non-
payment." Since SCII failed to provide convincing proof that it has already settled the
claims, Pigcaulan should be paid his holiday pay, service incentive leave benefits and
proportionate 13th month pay for the year 2000.
 
CASE 7 FAILURE TO RENDER REQUIRED OT WORK AS GROUND FOR
DISMISSAL

G.R. No. 192190               April 25, 2012

BILLY M. REALDA, Petitioner,
vs.
NEW AGE GRAPHICS, INC. and JULIAN I. MIRASOL, JR. Respondents.

FACTS: The petitioner, who was the former machine operator of respondent, filed
this petition for review of the decision of the CA which ruled that his unjustified refusal to
render overtime work, unexplained failure to observe prescribed work standards,
habitual tardiness and chronic absenteeism despite warning, and non-compliance with
the directive for him to explain his numerous unauthorized absences constitute sufficient
grounds for his termination.  Respondent’s business is a printing press whose
production schedule is sometimes flexible and varying. It is only reasonable that
workers are sometimes asked to render overtime work in order to meet production
deadlines. On or before May 26, 2004, petitioner was asked to render overtime work,
but he refused to do so despite the "rush" orders of customers and petitioner’s need to
meet its deadlines set by the former. In fact, he reneged on his promise to do the same,
after being issued an Overtime Slip Form and instead went out with another individual,
as attested by his wife after calling the company to inform it of such absence. He knew
that he was going to be unavailable for work on the following day, but instead of trying
to finish his work before that date by rendering overtime, due to the "rush" in meeting
the deadlines, he opted to forego with the same, and thereby rejecting the order of
respondent.

ISSUE: Whether petitioner’s termination was valid

RULING: Yes.

First, the petitioner’s arbitrary defiance to Graphics, Inc.’s order for him to render
overtime work constitutes willful disobedience. Taking this in conjunction with his
inclination to absent himself and to report late for work despite being previously
penalized, the CA correctly ruled that the petitioner is indeed utterly defiant of the lawful
orders and the reasonable work standards prescribed by his employer. An employer
has the right to require the performance of overtime service in any of the situations
contemplated under Article 89 of the Labor Code and an employee’s non-compliance is
willful disobedience. Art. 89 of the Labor Code empowers the employer to legally
compel his employees to perform overtime work against their will to prevent serious loss
or damage. 

Second, the petitioner’s failure to observe Graphics, Inc.’s work standards

constitutes inefficiency that is a valid cause for dismissal. Such inefficiency is
understood to mean failure to attain work goals or work quotas, either by failing to
complete the same within the allotted reasonable period, or by producing unsatisfactory
results. As the operator of Graphics, Inc.’s printer, he is mandated to check whether the
colors that would be printed are in accordance with the client’s specifications and for
him to do so, he must consult the General Manager and the color guide used by
Graphics, Inc. before making a full run. Unfortunately, he failed to observe this simple
procedure and proceeded to print without making sure that the colors were at par with
the client’s demands. This resulted to delays in the delivery of output, client
dissatisfaction, and additional costs on Graphics, Inc.’s part.

This Court cannot condone the petitioner’s attempt to belittle his habitual tardiness and
absenteeism as these are manifestation of lack of initiative, diligence and discipline that
are adverse to Graphics, Inc.’s interest. This Court cannot likewise agree to the
petitioner’s attempt to brush aside his refusal to render overtime work as
inconsequential when Graphics, Inc.’s order for him to do so is justified by Graphics,
Inc.’s contractual commitments to its clients. Such an order is legal under Article 89 of
the Labor Code and the petitioner’s unexplained refusal to obey is insubordination that
merits dismissal from service.
 
CASE 8
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.

FACTS: Macasio filed before a complaint against petitioner David for non-payment
of overtime pay, holiday pay and 13th month pay. He also claimed payment for moral
and exemplary damages and attorney’s fees. Macasio also claimed payment for service
incentive leave (SIL). He alleged that he had been working as a butcher for David, and
that the latter exercised effective control and supervision over his work. As defense,
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.

ISSUE: Whether respondent is entitled to holiday, SIL and 13th month pay

RULING:

For the payment of the holiday and SIL pay = entitled

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 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."

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.

For the payment of 13th month pay = not entitled

With respect to the payment of 13th month pay, 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
xxx 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.
CASE 9 COMPRESSED WORKWEEK
G.R. No. 163147               October 10, 2007
LINTON COMMERCIAL CO., INC. and DESIREE ONG, Petitioners,
vs.
ALEX A. HELLERA, ET. AL., Respondents.

FACTS: Petitioner Desiree Ong is Linton’s vice president. Linton issued a

memorandum addressed to its employees informing them of the company’s decision to
suspend its operations due to the currency crisis that affected its business operations.
Thereafter, Linton issued another memorandum informing them that effective 12
January 1998, it would implement a new compressed workweek of three (3) days on a
rotation basis. In other words, each worker would be working on a rotation basis for
three working days only instead for six days a week. 

Aggrieved, sixty-eight (68) workers (workers) filed a Complaint for illegal reduction of
workdays. They pointed out that Linton implemented the reduction of work hours without
observing Article 283 of the Labor Code, which required submission of notice thereof to
DOLE one month prior to the implementation of reduction of personnel, since Linton
filed only the establishment termination report enacting the compressed workweek on
the very date of its implementation.

ISSUE: Whether there was an illegal reduction of work

RULING: Yes.

In Philippine Graphic Arts, Inc. v. NLRC, the Court upheld for the validity of the
reduction of working hours, taking into consideration the following: the arrangement was
temporary, it was a more humane solution instead of a retrenchment of personnel, there
was notice and consultations with the workers and supervisors, a consensus were
reached on how to deal with deteriorating economic conditions, and it was sufficiently
proven that the company was suffering from losses.

A close examination of petitioners’ financial reports for 1997-1998 shows that,

while the company suffered a loss of ₱3,645,422.00 in 1997, it retained a considerable
amount of earnings and operating income. Clearly then, while Linton suffered from
losses for that year, there remained enough earnings to sufficiently sustain its
operations. In business, sustained operations in the black is the ideal but being in the
red is a cruel reality. However, a year of financial losses would not warrant the
immolation of the welfare of the employees, which in this case was done through a
reduced workweek that resulted in an unsettling diminution of the periodic pay for a
protracted period. Permitting reduction of work and pay at the slightest indication of
losses would be contrary to the State’s policy to afford protection to labor and provide
full employment.

As previously stated, financial losses must be shown before a company can validly opt
to reduce the work hours of its employees. All taken into account, the compressed
workweek arrangement was unjustified and illegal.1âwphi1 Thus, petitioners committed
illegal reduction of work hours.
 
CASE 10 COMPRESSED WORKWEEK

G.R. NO. 151309 October 15, 2008

BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as Union
President, JOSELITO LARIÑO, VIVENCIO B. BARTE, SATURNINO EGERA and
SIMPLICIO AYA-AY, Petitioners,
vs. 
NATIONAL LABOR RELATIONS COMMISSION, TRYCO PHARMA CORPORATION,
and/or WILFREDO C. RIVERA, Respondents.

FACTS: Petitioners are regular employees of Tryco Pharma Corporation (Tryco)

occupying the positions of helper, shipment helper and factory workers. They are
members of Bisig Manggagawa sa Tryco (BMT), the exclusive bargaining
representative of the rank-and-file employees. The parties have signed separate MOA
providing for a compressed workweek schedule to be implemented in the company. As
provided in the MOA, 8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be
considered as the regular working hours, and no overtime pay shall be due and payable
to the employee for work rendered during those hours. The MOA specifically stated that
the employee waives the right to claim overtime pay for work rendered after 5:00 p.m.
until 6:12 p.m. from Monday to Friday considering that the compressed workweek
schedule is adopted in lieu of the regular workweek schedule which also consists of 46
hours. However, should an employee be permitted or required to work beyond 6:12
p.m., such employee shall be entitled to overtime pay. Tryco informed the Bureau of
Working Conditions of DOLE of the implementation of a compressed workweek in the
company.

Tryco received a Letter from the Department of Agriculture reminding it that its
production should be conducted in San Rafael, Bulacan, not in Caloocan City. As such,
Tryco issued a Memorandum which directed petitioners to report to the company's plant
site in Bulacan. BMT opposed the transfer of its members to San Rafael, Bulacan,
contending that it constitutes unfair labor practice. In protest, BMT declared a strike.
Thereafter, petitioners filed complaints for illegal dismissal, underpayment of wages,
nonpayment of overtime pay and service incentive leave, and refusal to bargain.

ISSUE: Whether petitioners are entitled to OT pay

RULING: No.

We do not agree with the petitioners' assertion that the MOA is not enforceable as it is
contrary to law. The MOA is enforceable and binding against the petitioners. Where it is
shown that the person making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as a valid and binding undertaking.
D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that
the employees will derive from the adoption of a compressed workweek scheme, thus:

The compressed workweek scheme was originally conceived for establishments

wishing to save on energy costs, promote greater work efficiency and lower the
rate of employee absenteeism, among others. Workers favor the scheme
considering that it would mean savings on the increasing cost of transportation
fares for at least one (1) day a week; savings on meal and snack expenses;
longer weekends, or an additional 52 off-days a year, that can be devoted to rest,
leisure, family responsibilities, studies and other personal matters, and that it will
spare them for at least another day in a week from certain inconveniences that
are the normal incidents of employment, such as commuting to and from the
workplace, travel time spent, exposure to dust and motor vehicle fumes, dressing
up for work, etc. Thus, under this scheme, the generally observed workweek of
six (6) days is shortened to five (5) days but prolonging the working hours from
Monday to Friday without the employer being obliged for pay overtime premium
compensation for work performed in excess of eight (8) hours on weekdays, in
exchange for the benefits abovecited that will accrue to the employees.

Notably, the MOA complied with the following conditions set by the DOLE, under D.O.
No. 21, to protect the interest of the employees in the implementation of a compressed
workweek scheme:
1. The employees voluntarily agree to work more than eight (8) hours a
day the total in a week of which shall not exceed their normal weekly hours of
work prior to adoption of the compressed workweek arrangement;
2. There will not be any diminution whatsoever in the weekly or monthly
take-home pay and fringe benefits of the employees;
3. If an employee is permitted or required to work in excess of his normal
weekly hours of work prior to the adoption of the compressed workweek scheme,
all such excess hours shall be considered overtime work and shall be
compensated in accordance with the provisions of the Labor Code or applicable
Collective Bargaining Agreement (CBA);
4. Appropriate waivers with respect to overtime premium pay for work
performed in excess of eight (8) hours a day may be devised by the parties to the
agreement.
5. The effectivity and implementation of the new working time
arrangement shall be by agreement of the parties.

Considering that the MOA clearly states that the employee waives the payment of
overtime pay in exchange of a five-day workweek, there is no room for interpretation
and its terms should be implemented as they are written.

11. PHILIPPINE HOTELIERS, INC., DUSIT HOTEL NIKKO-MANILA, Petitioner, vs.

NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT, AND ALLIED
INDUSTRIES (NUWHRAIN-APL-IUF)- DUSIT HOTEL NIKKO CHAPTER, \
TOPIC: LAW ON WAGES
 
FACTS:
 
A wage order approved by the RTWPB granted 30 pesos ECOLA to particular
employees and workers of the private sectors. Subsequently, the Union, through its
President, Rasing, sent a letter to Dir. Maraan of the DOLE-NCR, reporting the non-
compliance of Dusit Hotel with Wage Order No. 9, while there was an on-going
compulsory arbitration before the NLRC due to a bargaining deadlock between the
Union and Dusit Hotel. The DOLE-NCR sent LSO Natividad to inspect the premises of
Dusit Hotel. On another date, another inspection was conducted and they discovered
that 144 employees affected by the wage order were not paid accordingly.
 
Meanwhile, the NLRC, in the compulsory arbitration, decided in favor of the Union and
granted the employees wage increases in accordance with the CBA.
 
Dusit Hotel was directed to pay the 144 employees their unpaid ECOLA plus penalty.
Dusit Hotel filed a Motion for Reconsideration arguing that the NLRC Decision resolving
the bargaining deadlock between Dusit Hotel and the Union already rendered the
DOLE-NCR Order moot and academic as the 144 hotel employees, would already be
receiving salaries beyond the coverage of WO No. 9.
 
DOLE-NCR in consideration of the NLRC Decision dismissed the complaint of the
Union against for non-compliance with WO No. 9.
 
The SOLE, based on the appeal of the Union, reasoned that the NLRC Decision dated
9 October 2002 categorically declared that the wage increase under the CBA finalized
between Dusit Hotel and the Union shall not be credited as compliance with WOs No. 8
and No. 9. However, the SOLE reversed its order based on a Motion for
Reconsideration filed by Dusit Hotel. The Union appealed but it was denied by the
SOLE because it would be unjust on the part of Dusit Hotel if the hotel employees were
to enjoy salary increases retroactive to 1 January 2001.
 
 
ISSUE:
 
Whether the 144 employees were still entitled to ECOLA granted by WO No. 9.
 
HELD:
 
No. The Court agrees with Dusit Hotel that the increased salaries of the employees
should be used as bases for determining whether they were entitled to ECOLA under
WO No. 9. It is only fair and just, therefore, that in determining entitlement of the hotel
employees to ECOLA, their increased salaries by 1 January 2001 and 1 January 2002
shall be made the bases. 
 
For the Court to rule otherwise would be to sanction unjust enrichment on the part of the
hotel employees, who would be receiving increases in their salaries, which would place
them beyond the coverage of Section 1 of WO No. 9, yet still be paid ECOLA under the
very same provision.
 
 
 
12. NATIONAL UNION OF WORKERS IN HOTEL RESTAURANT AND ALLIED
INDUSTRIES (NUWHRAIN-APL-IUF), PHILIPPINE PLAZA CHAPTER, Petitioner, vs.
PHILIPPINE PLAZA HOLDINGS, INC.,

TOPIC: LAW ON WAGES

FACTS:

The PPHI and the Union executed a CBA providing for the collection by the PPHI, of a
10% service charge on the sale of food, beverage, transportation, laundry and rooms.
The distributable amount will be shared equally by all HOTEL employees, including
managerial employees but excluding expatriates, with three shares to be given to PPHI
Staff and three shares to the UNION that may be utilized by them for purposes for which
the latter may decide. After 4 years, the Union’s Service Charge Committee informed
the Union President of uncollected service charges for the last quarter of 1998
amounting to ₱2,952,467.61. 

The PPHI admitted liability for ₱80,063.88 out of the ₱2,952,467.61 but PPHI but
denied the rest of the claims. The parties failed to reach an agreement so a complaint
for non-payment of specified service charges was filed before the LA. The Union
additionally charged PPHI with ULP for violation of their collective bargaining
agreement. The LA dismissed the complaint stating that Union failed to show, by law,
contract and practice, its entitlement to the payment of service charges from the entries
specified in its audit reports. The NLRC reversed the LA’s decision and considered the
specified entries/transactions as "service chargeable." As the PPHI failed to prove that it
paid or remitted the required service charges, the NLRC held the PPHI liable to pay the
Union ₱5,566,007.62 representing the claimed uncollected service charges for the
years 1997, 1998 and 1999 per the 3rd audit report.

The CA affirmed the LA’s decision but ordered the PPHI to pay the Union the amount of
₱80,063.88 as service charges that it found was due under the circumstances.

ISSUE: 

Whether the Union may collect from the PPHI, under the terms of the CBA, its share of
the service charges.

HELD:
No. The CBA, as a contract and the governing law between the parties, the general
rules of statutory construction apply in the interpretation of its provisions. Thus, if the
terms of the CBA are plain, clear and leave no doubt on the intention of the contracting
parties. No service charges were due from the specified entries/transactions; they either
fall within the CBA-excepted "Negotiated Contracts" and "Special Rates" or did not
involve "a sale of food, beverage, etc."

The PPHI did not violate Article 96 of the Labor Code when they refused the Union’s
claim for service charges on the specified entries/transactions. In this case, the CA
found that the PPHI had not in fact been collecting services charges on the specified
entries/transactions that we pointed out as either falling under "negotiated contracts"
and/or "special rates" or did not involve a "sale of food, beverage, etc." Accordingly,
Article 96 of the Labor Code finds no application in this case; the PPHI did not abolish
or terminate the implementation of any company policy providing for the collection of
service charges on specified entries/transactions that could have otherwise rendered it
liable to pay an amount representing the covered employees’ share in the alleged
abolished service charges.

13.  SLL INTERNATIONAL CABLES SPECIALIST and SONNY L. LAGON v. NLRC,

ROLDAN LOPEZ, et al.

TOPIC: LAW ON WAGES

FACTS: 

Respondents were employed by the petitioner as project employees in 1996, 1997,

1998, and 1999. They were paid less than the minimum wage for those four periods and
during their 4th employment, Lagon, due to economic constraints, had to cut down on
the overtime work of the employees. A complaint for illegal dismissal, non-payment of
wages, non-payment of 13th month pay, among other things, was brought to the LA
against the employer. The employer stated that the employees were project employees,
because they were employed for a specific undertaking, thus, they are not entitled to
minimum wage. The employer further stated that the employees were actually paid
above the minimum wage, since the allowances for snacks, lodging house, electricity,
water, and transportation should be included in the wages.

The LA, on its decision, stated that the employees were regular employees because
they were repeatedly hired by petitioners and they performed activities which were
usual, necessary and desirable in the business or trade of the employer. With regard to
the underpayment of wages, the LA found that private respondents were underpaid. It
ruled that the free board and lodging, electricity, water, and food enjoyed by them could
not be included in the computation of their wages because these were given without
their written consent. The LA, however, found that petitioners were not liable for illegal
dismissal.The LA viewed private respondent's act of going home as an act of
indifference when petitioners decided to prohibit overtime work. The NLRC and CA
affirmed and ruled against the employer.

ISSUE: 

Whether the employees are entitled to minimum wage.

HELD: 

The Court noted that the case involves factual disputes decided by the trial courts,
whose decisions the Court cannot disturb. Thus it cannot decide on the issue of whether
the employees are project or regular employees, and must affirm the ruling that they are
regular employees. In any case, project employees are nevertheless entitled to the
minimum wage, since they are not among the exclusions enumerated in the Labor Code
Implementing Rules.

14. OUR HAUS REALTY DEVELOPMENT CORPORATION vs. ALEXANDER

PARIAN, JAY C. ERINCO, ALEXANDER CANLAS, BERNARD TENEDERO and
JERRY SABULAO
TOPIC: LAW ON WAGES
 
FACTS:
Alexander Parian, Jay C. Erinco, Alexander Canlas, Bernard Tenedero and Jerry
Sabulao were all laborers working for Our Haus Realty Development Corporation.
However, it experienced financial distress and had to suspend some of its construction
projects to alleviate its condition. The respondents were among those who were
affected who were asked to take vacation leaves. Eventually, they were asked to
report back to work but instead, they filed a complaint for underpayment of their daily
wages claiming that except for Tenedero, their wages were below the minimum rates.  

The LA ruled in favor of Our Haus who claimed that the laborers’ wages complied with
the law’s minimum requirement because aside from paying the monetary amount of
the respondents’ wages, they were given subsidized meals and free lodging near the
construction project they were assigned to. 

The NLRC reversed the decision of the LA. It ruled that the laborers did not authorize
Our Haus in writing to charge the values of their board and lodging to their wages.
Thus, the same cannot be credited and further ruled that they are entitled to their
respective proportionate 13th month payments for the year 2010 and SIL payments for
at least three years, immediately preceding May 31, 2010, the date when the
respondents left Our Haus. However, it maintains LA’s decision that they are not
entitled to overtime pay since the exact dates and times when they rendered overtime
work had not been proven.
 
Our Haus moved for the reconsideration of the NLRC’s decision and submitted new
evidence to show that the respondents authorized Our Haus in writing to charge the
values of their meals and lodging to their wages. However, NLRC denied this motion,
thus, Our Haus filed a Rule 65 petition with the CA propounding a new theory that
there is a distinction between deduction and charging; that a written authorization is
only necessary if the facility’s value will be deducted and will not be needed if it will
merely be charged or included in the computation of wages. The CA dismissed Our
Haus’ certiorari petition and affirmed the NLRC rulings in toto finding that there is no
distinction between deduction and charging and that the legal requirements before any
deduction or charging can be made, apply to both. Our Haus filed a motion for
reconsideration but the CA denied its motion, prompting it to file the present petition for
review on certiorari under Rule 45.

ISSUE:

Whether NLRC committed grave abuse of discretion in deciding in favor of the

respondents.

HELD:

No. No substantial distinction between deducting and charging a facility’s value from the
employee’s wage; the legal requirements for creditability apply to both
To justify its non-compliance with the requirements for the deductibility of a facility, Our
Haus asks us to believe that there is a substantial distinction between the deduction and
the charging of a facility’s value to the wages. Our Haus explains that in deduction, the
amount of the wage (which may already be below the minimum) would still be lessened
by the facility’s value, thus needing the employee’s consent. On the other hand, in
charging, there is no reduction of the employee’s wage since the facility’s value will just
be theoretically added to the wage for purposes of complying with the minimum wage
requirement.
 
Our Haus’ argument is a vain attempt to circumvent the minimum wage law by trying to
create a distinction where none exists.
In reality, deduction and charging both operate to lessen the actual take-home pay of an
employee; they are two sides of the same coin. In both, the employee receives a
lessened amount because supposedly, the facility’s value, which is part of his wage,
had already been paid to him in kind. As there is no substantial distinction between the
two, the requirements set by law must apply to both.

15. BLUER THAN BLUE JOINT VENTURES COMPANY/MARY ANN DELA VEGA,
Petitioners, vs. GLYZA ESTEBAN, Respondent.

TOPIC: LAW ON WAGES (WAGE REDUCTION)

Facts
Respondent Glyza Esteban (Esteban) was employed in January 2004 as Sales Clerk,
and assigned at Bluer Than Blue Joint Ventures Company’s (petitioner) EGG boutique
in SM City Marilao, Bulacan, beginning the year 2006. Part of her primary tasks were
attending to all customer needs, ensuring efficient inventory, coordinating orders from
clients, cashiering and reporting to the accounting department.

In November 2006, the petitioner received a report that several employees have access
to its point-of-sale (POS) system through a universal password given by Elmer Flores
(Flores). Upon investigation, it was discovered that it was Esteban who gave Flores the
password. The petitioner sent a letter memorandum to Esteban on November 8, 2006,
asking her to explain in writing why she should not be disciplined for tampering with the
company’s POS system through the use of an unauthorized password. Esteban was
also placed under preventive suspension for ten days.

On November 13, 2006, Esteban’s preventive suspension was lifted, but at the same
time, a notice of termination was sent to her, finding her explanation unsatisfactory and
terminating her employment immediately on the ground of loss of trust and confidence.
Esteban was given her final pay, including benefits and bonuses, less inventory
variances incurred by the store amounting to ₱8,304.93. Esteban signed a quitclaim
and release in favor of the petitioner.

On December 6, 2006, Esteban filed a complaint for illegal dismissal, illegal suspension,
holiday pay, rest day and separation pay.

In a Decision dated September 28, 2007, the Labor Arbiter (LA) ruled in favor of
Esteban and found that she was illegally dismissed. The LA also awarded separation
pay, backwages, unpaid salary during her preventive suspension and attorney’s fees.

The petitioner filed an appeal with the National Labor Relations Commission (NLRC),
and in its Decision dated September 23, 2008, the NLRC reversed the decision of the
LA and dismissed the case for illegal dismissal. Thus, Esteban went to the Court of
Appeals (CA) on certiorari. In the assailed Decision dated November 25, 2009, the CA
granted Esteban’s petition and reinstated the LA decision.

ISSUE: 

Whether the wage reduction made was proper.

HELD:

No.

Article 113 of the Labor Code provides that no employer, in his own behalf or
in behalf of any person, shall make any deduction from the wages of his
employees, except in cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and Employment, among
others.

In this case, the petitioner failed to sufficiently establish that Esteban was
responsible for the negative variance it had in its sales for the year 2005 to
2006 and that Esteban was given the opportunity to show cause the
deduction from her last salary should not be made.  The Court cannot accept
the petitioner’s statement that it is the practice in the retail industry to
deduct variances from an employee’s salary, without more. 

CASE 16- PAYMENT OF BONUSES 

G.R. No. 185665               February 8, 2012

EASTERN TELECOMMUNICATIONS PHILIPPINES, INC., Petitioner, 

vs.EASTERN TELECOMS EMPLOYEES UNION, Respondent.

FACTS:

Eastern Telecoms Employees Union (ETEU) is the certified exclusive

bargaining agent of the Eastern TelCom’s rank and file employees with a
strong following of 147 regular members. It has an existing collective
bargaining agreement with the company to expire in the year 2004 with a
Side Agreement signed on September 3, 2001 which grants the payment of
bonuses. The dispute arose when the company deferred with the payments
of the employees’ benefits due to alleged financial losses. The company
maintained that the postponement of bonus is subject to the availability of
funds. As a result, ETEU filed a Notice of Strike on the ground of ULP for
failure to pay the bonuses in gross violation of the economic provision of the
CBA.

According to ETEU, the company has been giving the subject bonuses even if
it was not realizing net profits making it not only a company policy but also a
contractual obligation of ETPI.

The NLRC dismissed the complaint and held that ETIP could not be forced to
pay the union members of the said bonuses inasmuch as the payment of the
same was basically a management prerogative.

ISSUE:

Whether or not petitioner ETPI is liable to pay 14th, 15th and 16th month
bonuses for the year 2003 and 14th month bonus for the year 2004 to the
members of respondent union

RULING:
Yes. While a bonus is a gratuity or act of liberality of the giver which the
recipient has no right to demand, a. bonus, however, becomes a
demandable or enforceable obligation when it is made part of the wage or
salary or compensation of the employee. 

In the case at bench, it is indubitable that ETPI and ETEU agreed on the inclusion of a
provision for the grant of 14th, 15th and 16th month bonuses in the 1998-2001 CBA
Side Agreement, as well as in the 2001-2004 CBA Side Agreement.

Nothing from the records state that the grant of the said bonuses is subject to
conditions. Verily, by virtue of its incorporation in the CBA Side Agreements, the grant of
14th, 15th and 16th month bonuses has become more than just an act of generosity on
the part of ETPI but a contractual obligation it has undertaken. Moreover, the
continuous conferment of bonuses by ETPI to the union members from 1998 to 2002 by
virtue of the Side Agreements evidently negates its argument that the giving of the
subject bonuses is a management prerogative.

CASE 17- RETIREMENT PAY AS PART OF COMPANY PRACTICE

G.R. NO. 176985 : April 1, 2013

RICARDO E. VERGARA, JR., Petitioner, v. COCA-COLA BOTTLERS PHILIPPINES,

INC., Respondent.

FACTS:

Ricardo Vergara  retired as a District Sales Supervisor where there is existing

Retirement Plan Rules and Regulations stipulating that payment of Annual Performance
Incentive Pay of RSMs, DSSs, and SSSs shall be considered in the computation of
retirement benefits. He claimed his entitlement to an additional P474,600.00 as Sales
Management Incentive and the illegal deductions.

ISSUE:
Whether the SMI should be included in the computation of petitioner's retirement
benefits on the ground of consistent company practice

RULING:
No. There is diminution of benefits if 1) the grant or benefit is founded on a policy or has
ripened into a practice over a long period of time; (2) the practice is consistent and
deliberate; (3) the practice is not due to error in the construction or application of a
doubtful or difficult question of law; and (4) the diminution or discontinuance is done
unilaterally by the employer.

The employee must prove by substantial evidence that the giving of the benefit is done
over a long period of time to be considered as a regular company practice. The only
common denominator in previous cases as to what constitutes voluntary employer
practice appears to be the regularity and deliberateness of the grant of benefits over a
significant period of time.

In the case at bar, the grant of SMI to all retired DSSs regardless of whether or not they
qualify to the same had ripened into company practice. Again, the principle against
diminution of benefits is applicable only if the grant or benefit is founded on an express
policy or has ripened into a practice over a long period of time which is consistent and
deliberate which is not the case at hand.

CASE 18- RETIREMENT BENEFITS

G.R. No. 181806, March 12, 2014

WESLEYAN UNIVERSITY PHILIPPINES, Petitioner, v. WESLEYAN UNIVERSITY-

PHILIPPINES FACULTY AND STAFF ASSOCIATION, Respondent.

FACTS:

Wesleyan University and the SEBA of its rank-and-file employees entered into a CBA.
Wesleyan issued a Memorandum which provides for guidelines on the implementation
of vacation and sick leaves to which the association is not amenable for being contrary
to the existing practices and the CBA. Wesleyan announced its plan to implement a
one-retirement plan which was not agreed upon by the respondent.

According to the association, there is an established practice of giving two retirement

benefits: one from the Private Education Retirement Annuity Association (PERAA) Plan
and another from the CBA Retirement Plan.

ISSUE:
Whether the grant of two (2) sets of Retirement Benefits had already been
established as a university practice

RULING:

Yes. Article 100 of the Labor Code prohibits the reduction of benefits being received by
the employees otherwise known as the non-diminution rule. 

In the case at hand, it has been substantially established that Wesleyan University has
been giving two retirement benefits as early as 1997 which the said university has failed
to rebut.

Lastly, no evidence was shown to prove petitioner contention that there is only one
retirement plan as the CBA Retirement Plan and the PERAA Plan are one and the
same.
CASE 19- DISMISSAL OF MANAGERIAL EMPLOYEES

GR NO.178184 January 29, 2014

GRAND ASIAN SHIPPING LINES vs. WILFREDO GALVEZ, etal

DOCTRINE: The employer has broader discretion in dismissing managerial employees

on the ground of loss of trust and confidence than those occupying ordinary ranks. 
While plain accusations are not sufficient to justify the dismissal of rank and file
employees, the mere existence of a basis for believing that managerial employees have
breached the trust reposed on them by their employer would suffice to justify their
dismissal.

FACTS:

Petitioner Grand Asian Shipping Lines, Inc. (GASLI) is a domestic corporation engaged
in transporting liquified petroleum gas (LPG) from Petron Corporation’s refinery to
Petron’s plant. William How and Eduardo Francisco are its President and General
Manager, respectively.  Respondents, on the other hand, are crewmembers of one of
GASLI’s vessels. One of the vessel’s oilers, Abis, reported to GASLI’s Office anf
manage an alleged illegal activity bing committed by the respondents on board that they
would misdeclare the unconsumed fuel as consumed. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at nighttime.  Respondents
would then divide among themselves the proceeds of the sale. A complaint for
qualified theft was filed. 

Respondents alleged that the complaint was based on conflicting and erroneous
computations of fuel consumption. The LA found the dismissal of the 21
complainants illegal. When it reached the NLRC,  petitioner is adjudged not guilty
of illegal dismissal with respect to all complainants except complainant Joel
Sales. With the exception of Joel Sales, all the monetary awards to all
complainants are deleted from the decision. 

ISSUE:
Whether the complainants were validly dismissed

RULING:
Galvez and Gruta were validly dismissed on the ground of loss of trust and confidence
while there were no valid grounds for the dismissal of Arguelles, Batayola, Fresnillo,
Noble, Dominico, Nilmao and Austral.

With respect to loss of trust, distinction should be made between managerial and rank
and file employees. Insofar as rank and file employees are concerned, lossof trust and
confidence as a ground for valid dismissal requries proof of involvement in the alleged
events while for managerial employees, mere existence of a basis for believing that
such employee has breached the trust of his employer would suffice for his dismissal.
In the case, Galvez, as the ship captain, is considered a managerial employee since his
duties involve the governance, care and management of the vessel. Gruta, as chief
engineer, is also a managerial employee for he is tasked to take complete charge of the
technical operations of the vessel. As captain and as chief engineer, Galvez and Gruta
perform functions vested with authority to execute management policies and thereby
hold positions of responsibility over the activities in the vessel. Indeed, their position
requires the full trust and confidence of their employer for they are entrusted with the
custody, handling and care of company property and exercise authority over it. While
respondents made self-serving allegations that the computation made therein is
erroneous, they never questioned the competence of De la Rama to make such
certification. Neither did they question the authenticity and validity of the certification.
Thus, the fact that there was an overstatement of fuel consumption and that there was
loss of a considerable amount of diesel fuel oil remained unrefuted. Their failure to
account for this loss of company property betrays the trust reposed and expected of
them. They had violated petitioners’ trust and for which their dismissal is justified on the
ground of breach of confidence.

As for Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral, proof of
involvement in the loss of the vessel’s fuel as well as their participation in the alleged
theft is required for they are ordinary rank and file employees. And as discussed above,
no substantial evidence exists in the records that would establish their participation in
the offense charged. This renders their dismissal illegal, thus, entitling them to
reinstatement plus full backwages, inclusive of allowances and other benefits, computed
from the time of their dismissal up to the time of actual reinstatement.

CASES 20-23

G.R. No. 221897, November 07, 2016

20. ISIDRO QUEBRAL, ALBERTO ESQUILLO, RENANTE SALINSAN, JEROME

MACANDOG, EDGARDO GAYORGOR, JIM ROBERT PERFECTO, NOEL
PERFECTO, DENNIS PAGAYON, AND HERCULANO MACANDOG Petitioners, v.
ANGBUS CONSTRUCTION, INC. AND ANGELO BUSTAMANTE, Respondents.

Facts:

Petitioners alleged that Angbus employed them as construction workers on various

dates from 2008 to 2011. They claimed to be regular employees since they were
engaged to perform tasks which are necessary and desirable to the usual business of
Angbus, and that they have rendered services to the latter's construction business for
several years already. They were, however, summarily dismissed from work without any
just or authorized cause and due process. Thus, they filed consolidated cases for illegal
dismissal.

For their part, respondents maintained that petitioners were first employed by Angelfe
Management and Consultancy (Angelfe) for a one time project only. Two or three years
after the completion of the Angelfe project, they were then hired by Angbus, which is a
separate and distinct business entity from the former. Thus, petitioners were hired only
for two project employment contracts - one each with Angelfe and Angbus.
Respondents further stated that a long period of time between the first project
employment and the other intervened, which meant that petitioners were not re-hired
repeatedly and continuously.

However, respondents failed to present petitioners' employment contracts, payrolls, and

job application documents either at Angelfe or Angbus. They averred that these
documents were completely damaged by the flood caused by the "habagat"

Labor Arbiter (LA) found that petitioners were not illegally dismissed. Separately,
however, the LA ordered Angbus and Angelfe to pay petitioners their salary differentials
and claims for 13 month pay and holiday pay as these liabilities were admitted by them.
th

Meanwhile, individual respondent Angelo Bustamante, Jr. (Bustamante) was relieved of

any liability for want of basis.
11

NLRC reversed the LA's ruling and declared that petitioners were regular employees
who were illegally dismissed on June 14, 2012; hence, they are entitled to reinstatement
and full backwages, including their other monetary claims.

CA held that the NLRC gravely abused its discretion when it: (a) gave due course to
petitioners' appeal even though it was filed out of time; and (b) ruled that petitioners
were regular employees of Angbus.

ISSUE: Whether petitioners are project employees of Angbus

HELD: NO. They are regular employees.

On the substantive aspect, Article 295 of the Labor Code, as amended, distinguishes a
project employee from a regular employee, to wit:

Art. 295 [280]. Regular and casual employment. - The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except 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 or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

To safeguard the rights of workers against the arbitrary use of the word "project" to
preclude them from attaining regular status, jurisprudence provides that employers
claiming that their workers are project-based employees have the burden to prove that
these two requisites concur: (a) the employees were assigned to carry out a specific
project or undertaking; and (b) the duration and scope of which were specified at the
time they were engaged for such project. 37

Section 2.2 of Department Order No. 19, Series of 1993, entitled "Guidelines Governing
the Employment of Workers in the Construction industry," issued by the DOLE, provides
that:chanRoblesvirtualLawlibrary

2.2 Indicators of project employment. - Either one or more of the following

circumstances, among others, may be considered as indicators that an employee is a
project employee.

(a) The duration of the specific/identified undertaking for which the worker is engaged is
reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an

employment agreement and is made clear to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with the particular
project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer his
services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to

the Department of Labor and Employment (DOLE) Regional Office having jurisdiction
over the workplace within 30 days following the date of his separation from work, using
the prescribed form on employees' terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus
to the project employee as practiced by most construction companies. (Emphases
supplied)

 
Based on the foregoing, it is clear that the submission of the termination report to the
DOLE "may be considered" only as an indicator of project employment. By the
provision's tenor, the submission of this report, by and of itself, is therefore not
conclusive to confirm the status of the terminated employees as project employees,
especially in this case where there is a glaring absence of evidence to prove that
petitioners were assigned to carry out a specific project or undertaking, and that they
were informed of the duration and scope of their supposed project engagement, which
are, in fact, attendant to the first two (2) indicators of project employment in the same
DOLE issuance above-cited.

All told, since Angbus failed to discharge its burden to prove that petitioners were
project employees, the NLRC correctly ruled that they should be considered as regular
employees. Thus, the termination of petitioners' employment should have been for a just
or authorized cause, the lack of which, as in this case, amounts to illegal dismissal.

As a final point, it may not be amiss to state that petitioners' entitlement to their
monetary claims, such as salary differentials, 13th month pay, and holiday pay, was not
contested further by the parties. Neither did they question the NLRC's computation of
the monetary awards due to petitioners. Hence, the Court finds no reason to disturb it.

G.R. No. 213488, November 07, 2016

21. TOYOTA PASIG, INC., Petitioner, v. VILMA S. DE PERALTA, Respondent.

FACTS:

The instant case stemmed from a complaint for illegal dismissal filed by respondent
against petitioner before the NLRC.

Essentially, respondent alleged that things turned sour when her husband, also
petitioner's employee, organized a collective bargaining unit through a certification
election. According to respondent, petitioner suddenly dismissed from service the
officials/directors of TSPWU-AIWA, including her husband. 

In their defense, petitioner maintained that respondent was dismissed from service for
just cause and with due process. They explained that the respondent was charged and
proven to have committed acts of dishonesty and falsification by claiming commissions
for new business accounts which should have been duly credited to the dealership's
marketing department. They further averred that respondent's claims for commissions,
tax rebates, and other benefits were unfounded and without documentation and
validation. 16

The Labor Arbiter (LA) dismissed the complaint for lack of merit, but ordered petitioner
to pay respondent the amount of P11,111.50 representing the latter's salary. NLRC
affirmed the LA ruling with modification finding petitioner liable to respondent in the
amount of P617,248.08 representing the latter's unpaid commissions, tax rebate for
achieved monthly targets, salary deductions, salary for the month of January 2012, and
success share/profit sharing.

CA affirmed the NLRC ruling in toto.

ISSUE: Whether CA erred in awarding respondent her monetary claims despite failing
to prove her entitlement thereto. Corollary, it likewise contends that such monetary
claims do not partake of unpaid wages/salaries, as well as the labor standard benefits of
employees as provided by law - e.g., 13 month pay, overtime pay, service incentive
th

leave pay, night differential pay, holiday pay - and as such, petitioner, as employer, did
not bear the burden of proving the payment of such monetary claims or that respondent
was not entitled thereto

HELD: NO

Article 97 of the Labor Code explicitly includes commissions as part of wages. In Iran v.
NLRC, the Court thoroughly explained the wisdom behind such inclusion as follows:
38

This definition explicitly includes commissions as part of wages. While commissions are,
indeed, incentives or forms of encouragement to inspire employees to put a little more
industry on the jobs particularly assigned to them, still these commissions are direct
remunerations for services rendered. In fact, commissions have been defined as the
recompense, compensation or reward of an agent, salesman, executor, trustee,
receiver, factor, broker or bailee, when the same is calculated as a percentage on the
amount of his transactions or on the profit to the principal. The nature of the work of a
salesman and the reason for such type of remuneration for services rendered
demonstrate clearly that commissions are part of a salesman's wage or salary

In this case, respondent's monetary claims, such as commissions, tax rebates for
achieved monthly targets, and success share/profit sharing, are given to her as
incentives or forms of encouragement in order for her to put extra effort in performing
her duties as an ISE. Clearly, such claims fall within the ambit of the general term
"commissions" which in turn, fall within the definition of wages pursuant to prevailing law
and jurisprudence. Thus, respondent's allegation of nonpayment of such monetary
benefits places the burden on the employer, i.e., petitioner, to prove with a reasonable
degree of certainty that it paid said benefits and that the employee, i.e., respondent,
actually received such payment or that the employee was not entitled thereto.

 
The Court's pronouncement in Heirs of Ridad v. Gregorio Araneta University
Foundation is instructive on this matter, to wit:

Well-settled is the rule that once the employee has set out with particularity in his
complaint, position paper, affidavits and other documents the labor standard benefits he
is entitled to, and which he alleged that the employer failed to pay him, it becomes the
employer's burden to prove that it has paid these money claims. One who pleads
payment has the burden of proving it, and even where the employees must allege non-
payment, the general rule is that the burden rests on the employer to prove payment,
rather than on the employees to prove non-payment. The reason for the rule is that the
pertinent personnel files, payrolls, records, remittances, and other similar documents
which will show that overtime, differentials, service incentive leave, and other claims of
the worker have been paid - are not in the possession of the worker but in the custody
and absolute control of the employer. (Emphasis and underscoring supplied)
42

In this case, petitioner simply dismissed respondent's claims for being purely self-
serving and unfounded, without even presenting any tinge of proof showing that
respondent was already paid of such benefits or that she was not entitled thereto. It is
well-settled that the failure of employers to submit the necessary documents that are in
their possession gives rise to the presumption that the presentation thereof is prejudicial
to its cause.
44

Indubitably, petitioner failed to discharge its afore-described burden. Hence, it is bound

to pay the monetary benefits claimed by respondent. As aptly pointed out by the NLRC,
since respondent already earned these monetary benefits, she must promptly receive
the same, notwithstanding the fact that she was legally terminated from employment. 45

(Wala po sya full text na text format.)

22. ROBINA FARMS CEBU / UNIVERSAL ROBINA CORPORATION  v. ELIZABETH

VILLA

G.R. No. 175869, Apr 18, 2016

Topic: Overtime Pay, Overtime Work Authorization, Burden of proving entitlement

to Overtime Pay

FACTS:
Respondent Elizabeth Villa brought against the petitioner her complaint for illegal
suspension, illegal dismissal, nonpayment of overtime pay, and nonpayment of service
incentive leave pay in the Regional Arbitration Branch of the NLRC in Cebu.

Villa averred that she had been employed by petitioner Robina Farms as sales clerk
since 1981. The petitioner had enticed her to avail herself of the company's special
retirement program. In 2002, she had received a memorandum from Lily Ngochua
requiring her to explain her failure to issue invoices for unhatched eggs and despite her
explanation, she had been suspended for 10 days.

She was subsequently informed that her application had been disapproved, and had
then been advised to tender her resignation with a request for financial assistance.
Respondent manifested her intention to return to work but that she had since then been
prevented from entering the company premises and had been replaced by another
employee.

The petitioner admitted that Villa had been its sales clerk at Robina Farms. It alleged
that after the administrative hearing, Villa was found to have violated the company rule
on the timely issuance of the invoices. Petitioner further averred that after serving the
suspension, respondent had returned to work and upon learning the disapproval of her
application for retirement benefits, she had then brought her complaint against the
petitioners.

LA rendered a decision finding that Villa had not been dismissed from employment. The
NLRC rendered its judgment dismissing the appeal by the petitioner but granting that of
Villa. CA upheld the finding of the NLRC that the petitioner had illegally dismissed Villa.

The petitioner posits that the CA erroneously affirmed the giving of overtime pay and
service incentive leave pay to Villa; that she did not adduce proof of her having
rendered actual overtime work; that she had not been authorized to render overtime
work; and that her availment of vacation and sick leaves that had been paid precluded
her claiming the service incentive leave pay.

ISSUES:

(1) Was Villa illegally dismissed?

(2) Is Villa entitled to overtime pay and SIL pay? 

RULING:

(1) Yes, private respondent was illegally dismissed. It is undeniable that the private
respondent was suspended for ten (10) days. Ordinarily, after an employee [has] served
her suspension, she should be admitted back to work and to continue to receive
compensation for her services.
In the case at bar, it is clear that private respondent was not admitted immediately after
her suspension. When she reported back after her suspension, she was advised not to
report back anymore as her application was approved, which was latter [sic] on
disapproved. She was then advised to tender a resignation letter with request for
financial assistance by Lucy de Guzman.

After that another letter of petitioner Lily Ngochua advised private respondent to do the
same. Clearly, these acts are strong indication that petitioners wanted to severe [sic] the
employer-employee relationship between them and that of private respondent. This is
buttressed by the fact that when private respondent signified her intention to return back
to work after learning of the disapproval of her application, she was prevented to enter
the petitioner's premises by confiscating her ID and informing her that a new employee
has already replaced her.

Moreover, private respondent’s application for early retirement did not manifest her
intention to sever the employer-employee relationship. Although she applied for early
retirement, she did so upon the belief that she would receive a higher benefit based on
the petitioner's offer. As such, her consent to be retired could not be fairly deemed to
have been knowingly and freely given.

(2) Private Respondent is entitled to SIL pay but not to overtime payment 

OVERTIME PAYMENT

Firstly, entitlement to overtime pay must first be established by proof that the overtime
work was actually performed before the employee may properly claim the benefit. The
burden of proving entitlement to overtime pay rests on the employee because the
benefit is not incurred in the normal course of business.

And, secondly, the NLRC's reliance on the daily time records (DTRs) showing that Villa
had stayed in the company's premises beyond eight hours was misplaced. The DTRs
did not substantially prove the actual performance of overtime work. The petitioner
correctly points out that any employee could render overtime work only when there was
a prior authorization therefor by the management. Without the prior authorization,
therefore, Villa could not validly claim having performed work beyond the normal hours
of work. Moreover, Section 4(c), Rule I, Book III of the Omnibus Rules Implementing the
Labor Code relevantly states as follows:

Section 4. Principles in determining hours worked. – The following general principles

shall govern in determining whether the time spent by an employee is considered hours
worked for purposes of this Rule:

    If the work performed was necessary, or it benefited the employer, or the employee
could not abandon his work at the end of his normal working hours because he had no
replacement, all time spent for such work shall be considered as hours worked, if the
work was with the knowledge of his employer or immediate supervisor. (bold emphasis
supplied)

The DTRs did not substantially prove the actual performance of overtime work. An
employee could render overtime work only when there was a prior authorization therefor
by the management. Without the prior authorization, therefore, Villa could not validly
claim having performed work beyond the normal hours of work 

SERVICE INCENTIVE LEAVE PAY 

The LA originally awarded the SIL pay because the petitioner did not present proof
showing that Villa had been justly paid.

The petitioner submitted the affidavits of Zanoria explaining the payment of service
incentive leave after the Labor Arbiter had rendered her decision. But that was not
enough, for evidence should be presented in the proceedings before the Labor Arbiter,
not after the rendition of the adverse decision by the Labor Arbiter or during appeal.
Such a practice of belated presentation cannot be tolerated because it defeats the
speedy administration of justice in matters concerning the poor worker

Visitorial and Enforcement Powers of the Secretary of Labor

G.R. No. 217575, June 15, 2016
23. SOUTH COTABATO COMMUNICATIONS CORPORATION AND GAUVAIN J.
BENZONAN, Petitioners, v. HON. PATRICIA STO. TOMAS, SECRETARY OF
LABOR AND EMPLOYMENT, ROLANDO FABRIGAR, MERLYN VELARDE, VINCE
LAMBOC, FELIPE GALINDO, LEONARDO MIGUEL, JULIUS RUBIN, EDEL
RODEROS, MERLYN COLIAO, AND EDGAR JOPSON, Respondents.
FACTS:
DOLE conducted a Complaint Inspection at the premises of DXCP Radio Station, which
is owned by petitioner South Cotabato Communications Corporation. The inspection
yielded a finding of violation of labor standards provisions of the Labor Code involving
the nine (9) private respondents.
Consequently, the DOLE directed petitioner Gauvain Benzonan (Benzonan), to effect
restitution and/or correction of the alleged violations within five (5) days from notice.
Due to petitioners' failure to comply with its directive, the DOLE scheduled a Summary
Investigation. However, petitioners repeatedly failed to appear despite due notice. Thus,
the DOLE Regional Director directed petitioners to pay private respondents the total
amount of P759,752, representing private respondents' claim for wage differentials, 13th
month pay differentials, service incentive leave pay, holiday premium pay, and rest day
premium Pay.
Therefrom, petitioners appealed to the Secretary of Labor, raising two grounds: (1)
denial of due process; and (2) lack of factual and legal basis of the assailed Order.
Secretary of Labor affirmed the findings of the DOLE Regional Director 
On appeal, the CA upheld the Secretary of Labor, holding that petitioners cannot claim
denial of due process, their failure to present evidence being attributed to their
negligence.
ISSUE: Whether the [DOLE] has jurisdiction over the case.
HELD: NO
The power of the DOLE to determine the existence of an employer-employee
relationship between petitioners and private respondents in order to carry out its
mandate under Article 128 has been established beyond cavil in Bombo Radyo, thus:
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power
somehow has to make a determination of the existence of an employer-employee
relationship. Such prerogatival determination, however, cannot be coextensive with the
visitorial and enforcement power itself. Indeed, such determination is merely
preliminary, incidental and collateral to the DOLE'S primary function of enforcing labor
standards provisions. The determination of the existence of employer-employee
relationship is still primarily lodged with the NLRC. This is the meaning of the clause "in
cases where the relationship of employer-employee still exists" in Art. 128 (b).
Thus, before the DOLE may exercise its powers under Article 128, two important
questions must be resolved: (1) Does the employer-employee relationship still exist, or
alternatively, was there ever an employer-employee relationship to speak of; and (2)
Are there violations of the Labor Code or of any labor law?
The existence of an employer-employee relationship is a statutory prerequisite to and a
limitation on the power of the Secretary of Labor, one which the legislative branch is
entitled to impose. The rationale underlying this limitation is to eliminate the prospect of
competing conclusions of the Secretary of Labor and the NLR.C, on a matter fraught
with questions of fact and law, which is best resolved by the quasi-judicial body, which
is the NRLC, rather than an administrative official of the executive branch of the
government. If the Secretary of Labor proceeds to exercise his visitorial and
enforcement powers absent the first requisite, as the dissent proposes, his office
confers jurisdiction on itself which it cannot otherwise acquire. (emphasis ours)
No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down where
the DOLE would only make a preliminary finding, that the power was primarily held by
the NLRC. The law did not say that the DOLE would first seek the NLRC's
determination of the existence of an employer-employee relationship, or that should the
existence of the employer-employee relationship be disputed, the DOLE would refer the
matter to the NLRC. The DOLE must have the power to determine whether or not an
employer-employee relationship exists, and from there to decide whether or not to issue
compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by
RA 7730.
The DOLE, in determining the existence of an employer-employee relationship, has a
ready set of guidelines to follow, the same guide the courts themselves use. The
elements to determine the existence of an employment relationship are: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; (4) the employer's power to control the employee's conduct. The use of this
test is not solely limited to the NLRC. The DOLE Secretary, or his or her
representatives, can utilize the same test, even in the course of inspection, making use
of the same evidence that would have been presented before the NLRC. (emphasis
ours)
Like the NLRC, the DOLE has the authority to rule on the existence of an employer-
employee relationship between the parties, considering that the existence of an
employer-employee relationship is a condition sine qua non for the exercise of its
visitorial power. Nevertheless, it must be emphasized that without an employer-
employee relationship, or if one has already been terminated, the Secretary of Labor is
without jurisdiction to determine if violations of labor standards provision had in fact
been committed, and to direct employers to comply with their alleged violations of labor
standards.
 
 

 
G.R. No. 179652               March 6, 2012
24. PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.),
Petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN,
Respondents.
FACTS:

Private respondent Jandeleon Juezan filed a complaint against petitioner with the
Department of Labor and Employment (DOLE). The DOLE Regional Director found that
private respondent was an employee of petitioner, and was entitled to his money claims.
When the matter was brought before the CA, it was held that the DOLE Secretary had
jurisdiction over the matter. In the Decision of this Court, the CA Decision was reversed
and set aside, and the complaint against petitioner was dismissed.
The Court found that there was no employer-employee relationship between petitioner
and private respondent. It was held that while the DOLE may make a determination of
the existence of an employer-employee relationship, this function could not be co-
extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor
Code, as amended by RA 7730.
 The NLRC was held to be the primary agency in determining the existence of an
employer-employee relationship. This was the interpretation of the Court of the
clause "in cases where the relationship of employer-employee still exists" in Art.
128(b).
From this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification of
Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial and
enforcement power of the DOLE be not considered as co-extensive with the power to
determine the existence of an employer-employee relationship. In its Comment, the
DOLE sought clarification as well, as to the extent of its visitorial and enforcement
power under the Labor Code, as amended.
ISSUE: Whether the DOLE may make a determination of whether or not an employer-
employee relationship exists, and if so, to what extent
HELD:
No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down where
the DOLE would only make a preliminary finding, that the power was primarily held by
the NLRC. The law did not say that the DOLE would first seek the NLRC’s
determination of the existence of an employer-employee relationship, or that should the
existence of the employer-employee relationship be disputed, the DOLE would refer the
matter to the NLRC. The DOLE must have the power to determine whether or not an
employer-employee relationship exists, and from there to decide whether or not to issue
compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by
RA 7730.
The DOLE, in determining the existence of an employer-employee relationship, has a
ready set of guidelines to follow, the same guide the courts themselves use. The
elements to determine the existence of an employment relationship are: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; (4) the employer’s power to control the employee’s conduct. 9 The use of this
test is not solely limited to the NLRC. The DOLE Secretary, or his or her
representatives, can utilize the same test, even in the course of inspection, making use
of the same evidence that would have been presented before the NLRC.
The determination of the existence of an employer-employee relationship by the
DOLE must be respected. The expanded visitorial and enforcement power of the
DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could,
by the simple expedient of disputing the employer-employee relationship, force the
referral of the matter to the NLRC. The Court issued the declaration that at least a prima
facie showing of the absence of an employer-employee relationship be made to oust the
DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence,
and it is the DOLE that will weigh it, to see if the same does successfully refute the
existence of an employer-employee relationship.

To recapitulate, if a complaint is brought before the DOLE to give effect to the labor
standards provisions of the Labor Code or other labor legislation, and there is a finding
by the DOLE that there is an existing employer-employee relationship, the DOLE
exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no
employer-employee relationship, the jurisdiction is properly with the NLRC. If a
complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the
jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which
provides that the Labor Arbiter has original and exclusive jurisdiction over those cases
involving wages, rates of pay, hours of work, and other terms and conditions of
employment, if accompanied by a claim for reinstatement. If a complaint is filed with the
NLRC, and there is still an existing employer-employee relationship, the jurisdiction is
properly with the DOLE. The findings of the DOLE, however, may still be questioned
through a petition for certiorari under Rule 65 of the Rules of Court.
WHEREFORE, the Decision of this Court is hereby AFFIRMED, with the
MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power,
the Labor Secretary or the latter’s authorized representative shall have the power to
determine the existence of an employer-employee relationship, to the exclusion of the
NLRC.

ADDITIONAL

G.R. No. 222416, June 17, 2020

FIAMETTE A. RAMIL, PETITIONER, v. STONELEAF INC./JOEY DE

GUZMAN / MAC DONES / CRISELDA DONES, RESPONDENTS.

FACTS:

 Ramil was hired as a Spa Supervisor and Massage Therapist at Stoneleaf.

Ramil inquired as to the payment of contributions of SSS, Pag-Ibig and
PhilHealt which did not sit well with the Stoneleaf’s President. On a separate
incident, when the company learned that Ramil reported that there were
three (3) clients when there were really four (4), he was dismissed from the
service due to serious misconduct, betrayal of trust, and loss of confidence. Ramil filed a complaint
for illegal dismissal against Stoneleaf and alleged that he was not given substantial and procedural
due process. She likewise asked for her backwages and other labor standard benefits. The company
alleged that he was given an opportunity to explain during a meeting.

The LA upheld the validity of the dismissal of Ramil for valid causes but without due process
which entitles him to indemnity pay. The alleged meeting cannot take the place of the required
notice. The NLRC affirmed the LA and ruled that Ramil is not a managerial employee/staff because
her duties and responsibilities do not fall under any of the categories of Section 2(b), Rule 1, Book III
of the Implementing Rules of the Labor Code. The CA resolved that Ramil was a
supervisory/managerial employee based on her admission and the scope of assignments she indicated
in her position paper. She exercised management prerogatives for Stoneleaf's interest. Consequently,
she was not entitled to the beenfits under the Labor Code.

ISSUE:

Whether Ramil is to entitled to service incentive leave pay, holiday pay, pro-rated 13 th month pay, and
attorney's fees

RULING:

Yes. Article 82 of the Labor Code provides that managerial employees are excluded from the labor
standards benefits. These are the employees 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.
However, Ramil does not have the prerogative to lay down management policies and to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such
managerial actions. The scope of her assignment pertains to the daily operation of the spa by making
sure that the business runs smoothly. However, her tasks do not include the regular exercise of
discretion. Her authority is limited to the execution of company procedures and policies. She has
plenty of administrative work, but none of it involves the use of independent judgment. Her duties are
also subject to De Guzman's approval.

A position is not managerial if they only execute approved and established policies leaving little or no
discretion at all whether to implement said policies or not. It must not be routinary or clerical in
nature, but requires the use of independent judgment. 

To conclude, Ramil is a mere rank-and-file employee. Specifically, she is a fiduciary rank-and-file

employee whois entitled to the labor standard benefits.

PIECE-RATE WORKERS WHO ARE REGULAR WORKERS ARE ENTITLED TO LABOR

STANDARDS BENEFITS

G.R. No. 123938 May 21, 1998

LABOR CONGRESS OF THE PHILIPPINES, etal vs NLRC

FACTS:

A MOA was approved and LCP was certified 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. Petitioners who are rank and file employees and represented by the Labor
Congress of the Philippines filed a complaint for money claims against the respondents.

The LA absolved the 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 but ordered for the
reinstatement of the complainants except those who resigned and executed releases.

ISSUE:

Whether the petitioners who are considered as piece rate workers are entitled to
benefits

RULING:

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. They are also entitled to
holiday pay, premium pay, 13th month pay and service incentive leave.
Although piece-rate workers, they 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.

COMPRESSED WORKWEEK

G.R. No. 151309             October 15, 2008

BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as Union President,

JOSELITO LARIÑO, VIVENCIO B. BARTE, SATURNINO EGERA and SIMPLICIO AYA-
AY, petitioners, 
vs.
NATIONAL LABOR RELATIONS COMMISSION, TRYCO PHARMA CORPORATION, and/or
WILFREDO C. RIVERA, respondents.

FACTS:

A compressed workweek was implemented pursuant to a DOLE guidelines in TRYCO

where employees’ regular working hours are from 8:00 a.m. to 6:12 p.m., from Monday to
Friday.

Tryco received the Letter from the Bureau of Animal Industry of the Department of Agriculture
reminding it that its production should be conducted in San Rafael, Bulacan, not in Caloocan City.
Accordingly, Tryco issued a Memorandum which directed petitioner Aya-ay to report to the
company's plant site in Bulacan. When petitioner Aya-ay refused to obey, Tryco reiterated the order.
Subsequently, through a Memorandum, Tryco also directed petitioners Egera, Lariño and Barte to
report to the company's plant site in Bulacan. BMT, the representative of TRYCO’s employees,
opposed the transfer of its members to San Rafael, Bulacan, contending that it constitutes unfair
labor practice. In protest, BMT declared a strike.
Petitioners filed cases for illegal dismissal and non-payment of overtime pay. The Labor Arbiter also
denied the money claims, ratiocinating that the nonpayment of wages was justified because of the
compressed workweek. The NLRC affirmed the LA.

ISSUE: Whether the complainants are entitled to OT pay

RULING:

No. The MOA is enforceable and binding against the petitioners. Where it is shown that the person
making the waiver did so voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a
valid and binding undertaking. Further, there was diminution whatsoever in the weekly or monthly
take-home pay and fringe benefits of the employees. D.O. No. 21 sanctions the waiver of overtime
pay in consideration of the benefits that the employees will derive from the adoption of a
compressed workweek scheme, thus:

Considering that the MOA clearly states that the employee waives the payment of overtime pay in
exchange of a five-day workweek, there is no room for interpretation and its terms should be
implemented as they are written.

G.R. No. 163147               October 10, 2007

LINTON COMMERCIAL CO., INC. and DESIREE ONG, Petitioners, 

vs.
ALEX A. HELLERA, et.al.

FACTS:

 Linton submitted an establishment termination report to the DOLE regarding the temporary closure
of the establishment. It issued another memorandum informing them that effective 12 January 1998,
it would implement a new compressed workweek of three (3) days on a rotation basis. In other
words, each worker would be working on a rotation basis for three working days only instead for six
days a week. On the same day, Linton submitted an establishment termination report concerning the
rotation of its workers. Linton proceeded with the implementation of the new policy without waiting
for its approval by DOLE.

Aggrieved, the workers filed a complaint for illegal reduction of workdays. They also pointed out
that Linton implemented the reduction of work hours without observing Article 283 of the Labor
Code, which required submission of notice thereof to DOLE one month prior to the implementation of
reduction of personnel.

ISSUE:

Whether there was an illegal reduction of work when Linton implemented a compressed workweek
by reducing from six to three the number of working days with the employees working on a rotation
basis.

RULING:

The reduction of the number of regular working days is valid where the arrangement is resorted to by
the employer to prevent serious losses due to causes beyond his control, such as when there is a
substantial slump in the demand for his goods or services or when there is lack of raw materials.

While Linton suffered from losses for that year, there remained enough earnings to sufficiently
sustain its operations. In business, sustained operations in the black is the ideal but being in the red
is a cruel reality. However, a year of financial losses would not warrant the immolation of the welfare
of the employees, which in this case was done through a reduced workweek that resulted in an
unsettling diminution of the periodic pay for a protracted period. Permitting reduction of work and pay
at the slightest indication of losses would be contrary to the State’s policy to afford protection to labor
and provide full employment.
Although management has the prerogative to come up with measures to ensure profitability or loss
minimization. However, such privilege is not absolute. Management prerogative must be exercised
in good faith and with due regard to the rights of labor.

REDUCTION OF WORKING HOURS

[ G.R. No. 204684, October 05, 2020 ]

ALLAN REGALA, PETITIONER, VS. MANILA HOTEL CORPORATION, RESPONDENT.

FACTS:

Regala was hired as one of the waiters of Manila Hotel where he worked for six (6) days
every week. He claimed that MHC constructively dismissed him from employment when it allegedly
reduced his regular work days to two (2) days from the normal five (5)-day work week starting
December 2, 2009, which resulted in the diminution of his take home salary. On its part, MHC
denied outright that Regala is its regular employee, and claimed that he is a mere freelance or "extra
waiter" engaged by MHC on a short term basis. 

The LA held that Regala is a fixed-term employee of MHC and that he voluntarily executed the
Service Agreements with MHC with a full understanding that his engagement with it was only for a
fixed period but the NLRC reversed the Decision of the LA and held that Regala is a regular
employee of MHC.

ISSUE:
Whether the reduction of his regular work days and consequent diminution of his salary amounted to
constructive dismissal

RULING:

Yes. Regala's case is premised on the notion that he is a regular employee entitled to security of
tenure but was otherwise constructively dismissed when MHC, without valid cause, reduced his
regular work days from five (5) days to two (2) days.

Patently, the reduction of Regala's regular work days from five (5) days to two (2) days resulted to a
diminution in pay.  Regala's change in his work schedule resulting to the diminution of his take home
Ꮮαwρhi ৷

salary is, therefore, tantamount to constructive dismissal.

WAITING TIME

G.R. No. 78210 February 28, 1989

TEOFILO ARICA, et. al. vs. NLRC

FACTS:

A complaint was filed against the private respondent for assembly time, moral damages and
attorney's fees. Petitioners contend that the preliminary activities as workers of respondents
STANFILCO in the assembly area is compensable as working time (from 5:30 to 6:00 o'clock in the
morning) since these preliminary activities are necessarily and primarily for private respondent's
benefit.

The Labor Arbiter rendered a decision holding that the thirty-minute assembly time long practiced
cannot be considered waiting time or work time and, therefore, not compensable, has become the
law of the case which can no longer be disturbed without doing violence to the time- honored
principle of res-judicata. The NLRC affirmed the Decision. Petitioners filed a Motion for
Reconsideration which was denied. Hence, a petition for certiorari.

ISSUES:
1) Whether the 30-minute activity of the petitioners before the scheduled working time is
compensable under the Labor Code; and
2) Whether res judicata applies when the facts obtaining in the prior case and in the case at bar
are significantly different from each other in that there is merit in the case at bar

RULING:
1. No. In the Associated Labor Union vs. Standard (Phil.) Fruit Corporation, it was held that the
thirty (30)-minute assembly time long practiced and institutionalized by mutual consent of the
parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be
considered as waiting time within the purview of Section 5, Rule I, Book III of the Rules and
Regulations Implementing the Labor Code.

Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the
employees, and the proceedings attendant thereto are not infected with complexities as to deprive
the workers the time to attend to other personal pursuits. They are not new employees as to require
the company to deliver long briefings regarding their respective work assignments. Their houses are
situated right on the area where the farm are located, such that after the roll call, which does not
necessarily require the personal presence, they can go back to their houses to attend to some
chores. In short, they are not subject to the absolute control of the company during this period,
otherwise, their failure to report in the assembly time would justify the company to impose
disciplinary measures. Therefore, the thirty (30)-minute assembly time was not primarily intended for
the interests of the employer, but ultimately for the employees to indicate their availability or non-
availability for work during every working day.

2. Yes. The non-compensability of the claim having been earlier established, constitute the
controlling legal rule or decision between the parties and remains to be the law of the
case making this petition without merit.

Res judicata operates to bar not only the relitigation in a subsequent action of the issues
squarely raised, passed upon and adjudicated in the first suit, but also the ventilation in said
subsequent suit of any other issue which could have been raised in the first but was not. The
law provides that 'the judgment or order is, with respect to the matter directly adjudged or as
to any other matter that could have been raised in relation thereto, conclusive between the
parties and their successors in interest by title subsequent to the commencement of the
action litigating for the same thing and in the same capacity. So, even if new causes of action
 are asserted in the second, this would not preclude the operation of the doctrine of res
judicata. Those issues are also barred, even if not passed upon in the first.

G.R. No. 119205 April 15, 1998

SIME DARBY PILIPINAS, INC. petitioner, 

vs.
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY SALARIED
EMPLOYEES ASSOCIATION (ALU-TUCP), respondents.

FACTS:

Sime Darby issued a memorandum to all factory-based employees advising all its monthly salaried
employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance
Department working on shifts, a change in work schedule. The 30-minute paid "on call" lunch break
was discontinued.

The Labor Arbiter dismissed the complaint on the ground that the change in the work schedule and
the elimination of the 30-minute paid lunch break of the factory workers constituted a valid exercise
of management prerogative and that the new work schedule, break time and one-hour lunch break
did not have the effect of diminishing the benefits granted to factory workers as the working time did
not exceed eight (8) hours. Initially, the NLRC affirmed the LA. However, on MR, the NLRC adopted
the ruling in the 1990 Sime Darby case. It was declared that the employees were deprived of the
benefits of a time-honored company practice of providing its employees a 30-minute paid lunch
break resulting in an unjust diminution of company privileges prohibited by Art. 100 of the Labor
Code, as amended.

ISSUE:

Whether the discontinuance of the 30-minute paid lunch break of the factory workers constituted a
valid exercise of management prerogative

RULING:

Yes. The right to fix the work schedules of the employees rests principally on their employer.

While the old work schedule included a 30-minute paid lunch break, the employees could be called
upon to do jobs during that period as they were "on call." Even if denominated as lunch break, this
period could very well be considered as working time because the factory employees were required
to work if necessary and were paid accordingly for working. With the new work schedule, the
employees are now given a one-hour lunch break without any interruption from their employer. For a
full one-hour undisturbed lunch break, the employees can freely and effectively use this hour not
only for eating but also for their rest and comfort which are conducive to more efficiency and better
performance in their work. Since the employees are no longer required to work during this one-hour
lunch break, there is no more need for them to be compensated for this period.
 SECOND DIVISION

G.R. No. 195297, December 05, 2018

COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner, v. ILOILO COCA-COLA

PLANT EMPLOYEES LABOR UNION (ICCPELU), AS REPRESENTED BY WILFREDO
L. AGUIRRE, Respondent.

FACTS:

CCBPI's policy required employees to report for work on certain Saturdays to perform a
host of activities, usually involving maintenance of the facilities. CCBPI later on
informed the respondent that Saturday work would no longer be scheduled, with CCBPI
citing operational necessity as the reason for the decision.

ISSUES:

Whether the CA erred in ruling that under the CBA between the parties, scheduling
Saturday work for CCBPI's employees is mandatory on the part of the Company

Whether scheduling Saturday work has ripened into a company practice, the removal of
which constituted a diminution of benefits

RULING:

No. A more logical and harmonious interpretation of the CBA provisions wherein
Saturday work is optional and not mandatory keeps more with the agreement between
the parties.

The CBA clearly provides that CCBPI has the option to schedule work on Saturdays
based on operational necessity. There is no ambiguity to the provision, and no other
interpretation of the word "work" other than the work itself and not the working hours.
If the parties had truly intended that the option would be to change only the working
hours, then it would have so specified that whole term "working hours" be used, as was
done in other provisions of the CBA.

As to the second issue, it cannot be considered to have lapsed into a company practice the
removal of which constituted a diminution of benefits. To note, it is not Saturday work per
se which constitutes a benefit to the company's employees but the premium which the
company pays its employees above and beyond the minimum requirements set by law.
The CBA between CCBPI and the respondent guarantees the employees that they will
be paid their regular wage plus an additional 50% thereof for the first eight (8) hours of
work performed on Saturdays. Therefore, the benefit, if ever there is one, is the
premium pay given by reason of Saturday work, and not the grant of Saturday work
itself. CCBPI withdrew the Saturday work which is a management prerogative.
It did not withdraw the payment of premium pay for Saturday work without abolishing
the latter. Benefits, under the non-diminution rule, pertains to those which are capable
of being measured in terms of money. Hence, it cannot be said that there was
diminution of benefits. Further, such Saturday work is conditioned upon the existence
of operational necessity which prevails hence, the rule on non-diminution finds no
application. Lastly, the invocation of payment of unworked Saturdays is contrary to the
principle of "a fair day's work for a fair day's pay”.

G.R. No. 225725, January 16, 2019 ]

LEPANTO CONSOLIDATED MINING COMPANY, PETITIONER, V. MAXIMO C. MAMARIL,
EDUARDO C. FONTIVEROS, RICHARD PADONG, SHARWIN ESPIQUE, CLARITO ALBING,
BALUDOY TOTANES, GERRY OLANIO, JOSEPH DUMANGENG, REYNALD MANUIT,
NARDO SINGIT, MICHAEL PANGDA, BENJAMIN ASIDERA, ALVARO PATAGUE, JR.,
ANGELITO NAYRE, JR., JOSE MOJICA, AND JOEL SILARAN, RESPONDENTS.

FACTS:
Mamaril worked for Lepanto as one of its security guards assigned to the Security Reaction Force
(SRF). Due to the SRF's small number and highly sensitive and critical duties, the members were required to be on
duty and on call for 24 hours, seven days a week. They were posted alternately to sensitive postings and were not
allowed to go home except for their rest day. When not on duty, the SRF members were required to stay at Victoria
Hill, the resting quarters of the SRF, and were on call when not assigned to a particular guard detail. As
compensation, the SRF members received, apart from other benefits, overtime
pay equivalent to one hour of overtime work.

ISSUE:
Whether respondents are entitled to their money claims

RULING:

Yes. They are entitled to holiday pay, rest day and overtime pay. They actually
rendered overtime work after their tour of duty which is admitted by Lepanto.

Lepanto nonetheless insists that it paid respondent. overtime pay and holiday
pay. Hence, it should have at least presented copies of its payroll or copies of the
pay slips to show payment of these benefits but they failed to do so. Hence, the
presumption that such evidence, if presented, would be prejudicial to it arose.

G.R. No. 189404               December 11, 2013

WILGEN LOON, et., al. vs. POWER MASTER, INC., TRI-C GENERAL SERVICES, and SPOUSES
HOMER and CARINA ALUMISIN, Respondents.

FACTS:

Power Master, Inc. and Tri-C General Services employed and assigned the petitioners as janitors
and leadsmen in various PLDT offices. Subsequently, the petitioners filed a complaint for money
claims against Power Master and other respondents for not being paid monetary benefits including
overtime pay and a case for illegal dismissal.

Mamaril, together with the other security guards, were apprehended for stealing skinned copper wires.
After the investigation, Lepanto dismissed Mamaril from employment for dishonesty and breach
of trust and confidence. This prompted Mamaril to file a case for illegal dismissal and money
claims.  Several security guards of Lepanto and members of the SRF also filed a complaint  for payment of
overtime pay, rest day pay, night shift differentials, moral and exemplary damages, and attorney's fees.
The LA awarded the petitioners salary differential, service incentive leave, and thirteenth month
pays but not claims for backwages, overtime, holiday, and premium pays. The NLRC allowed
the respondents to submit pieces of evidence for the first time on appeal on the ground that
they had been deprived of due process.

ISSUE:
Whether the petitioners are entitled to salary differential, overtime, holiday, premium, service
incentive leave, and thirteenth month pays

RULING:

No. The burden of proving entitlement to overtime pay and premium pay for holidays and rest days
rests on the employee because these are not incurred in the normal course of business. 

In the present case, the petitioners failed to adduce any evidence that would show that they actually
rendered service in excess of the regular eight working hours a day, and that they in fact worked on
holidays and rest days.