THIRD DIVISION

[G.R. No. 76746. July 27, 1987.]

DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO,

GENERAL MANAGER, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION, HON. COMM. RICARDO C. CASTRO, HON. ARBITER
AMELIA M. GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT
and REYNALDO BODEGAS, Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATIONS; LABOR LAW; TERMINATION OF

EMPLOYMENT; BACKWAGES; RATIONALE BEHIND GRANT. — Backwages, in
general, are granted on grounds of equity for earnings which a worker or
employee has lost due to his dismissal from work (New Manila Candy Workers
Union (NACONWA-PAFLU v. CIR, 86 SCRA 37). The general principle is that an
employee is entitled to receive as backwages all the amounts he may have lost
starting from the date of his dismissal up to the time of his reinstatement
(Capital Garment Corporation v. Ople, 117 SCRA 473; New Manila Candy
Workers’ Union (NACONWA-PAFLU) v. CIR, supra).

2. ID.; ID.; ID.; ID.; AMOUNT FIXED TO A JUST AND REASONABLE LEVEL
WITHOUT QUALIFICATION OR DEDUCTION; PURPOSE. — In a line of cases, this
Court has established a policy fixing the amount of backwages to a just and
reasonable level without qualification or deduction (Insular Life Assurance Co.,
Ltd. Employees’ Association-NATU v. Insular Life Assurance Co., Ltd., 76 SCRA
501; Feati University Club v. Feati University, 58 SCRA 395; Mercury Drug Co.,
Inc. v. CIR, 56 SCRA 694). In Insular Life Assurance Employees’ Association-
NATU v. Insular Life Assurance Co., Ltd. (76 SCRA 50) we held that to fix the
amount of backwages without qualification or deduction simply means that the
workers are to be paid their backwages fixed as of the time of their dismissal or
strike without deduction for their earnings elsewhere during their lay-off and
without qualification of their backwages as thus fixed; i.e. unqualified by any
wage increases or other benefits that may have been received by their co-
workers who were not dismissed or did not go on strike. The principle is
1
justified "as a realistic, reasonable and mutually beneficial solution for it
relieves the employees from proving their earnings during their lay-offs and the
employer from submitting counterproofs. It was meant to obviate the twin evils
of idleness on the part of the employees and attrition and undue delay in
satisfying the award on the part of the employer" (New Manila Candy Workers
Union NACONWA-PAFLU v. CIR supra). The same was not to establish an
inflexible rule of computation of any backwages due an employee.

3. ID.; ID.; ID.; ID.; ID.; EMPLOYEE NOT ENTITLED TO BACKWAGES ON DAYS
WHERE NO WORK WAS REQUIRED. — The age-old rule governing the relation
between labor and capital, or management and employee of a "fair day’s wage
for a fair day’s labor" remains as the basic factor in determining employees’
wages, and for that matter backwages. If there is no work performed by the
employee there can be no wage or pay unless, of course, the laborer was able,
willing and ready to work but was illegally locked out, or suspended (SSS v.
SSS Supervisors’ Union-CUGCO, 117 SCRA 746). The illegal dismissal of the
private respondent is conceded by the petitioner. It is willing to pay backwages.
However, the petitioner argues that for days where no work was required and
could be done by its employees, no wages could have been earned and,
thereafter, lost by said employees to justify an award of backwages. We have
held that where the failure of workers to work was not due to the employer’s
fault, the burden of economic loss suffered by the employees should not be
shifted to the employer. Each party must bear his own loss (SSS v. SSS
Supervisors’ Union-CUGCO, supra; Pan-American World Airways, Inc. v. CIR,
17 SCRA 813). As pointed out by the Solicitor General — ‘. . . to allow payment
of backwages of P24,316.68 as ordered by public respondents instead of
P3,834.16 as petitioners claim and which appears to be just and reasonable
under the circumstances of this case would not only be unconscionable but
would be grossly unfair to other employees who were not paid when petitioners’
business was not in operation." (Rollo, p. 35).

DECISION

GUTIERREZ, JR., J.:

This is a petition to review the May 16, 1986 resolution of respondent National
Labor Relations Commission (NLRC) affirming the Labor Arbiter’s order in NLRC
Case No. NCR-7-3162083. The sole issue raised is the proper basis for the
computation of backwages in favor of an illegally dismissed employee.
2
The facts of the case are simple and uncontroverted.

On July 11, 1983, a complaint for illegal dismissal was filed by respondent
Reynaldo Bodegas, against petitioner Durabuilt, a tire recapping company.

In a decision rendered by the Labor Arbiter on February 13, 1984, the private
respondent was ordered reinstated to his former position with full backwages,
from the time he was terminated up to the time he is actually reinstated,
without loss of seniority rights and benefits accruing to him.

The petitioners failed to file a seasonable appeal and entry of final judgment
was made on July 8, 1985.

On August 8, 1985, the Acting Chief of Research and Information and the
Corporation Auditing Examiner of the then Ministry of Labor and Employment
submitted a computation of backwages, ECOLA, 13th month pay, sick and
vacation leave benefits in favor of Reynaldo Bodegas in the total amount of
P24,316.38.

The petitioner filed its opposition to the computation on the ground that it
contemplated a straight computation of twenty-six (26) working days in one
month when the period covered by the computation was intermittently
interrupted due to frequent brownouts and machine trouble and that
respondent Bodegas had only a total of 250.75 days of attendance in 1982 due
to absences. According to the petitioner, Bodegas is entitled only to the amount
of P3,834.05 broken down as follows: salaries — P1,993.00; ECOLA-P1,433.50,
and 13th month pay — P407.55.

On October 23, 1985, the Labor Arbiter denied the opposition to the
computation. The petitioner appealed to the NLRC which, in an order dated May
16, 1986, affirmed the order of the Labor Arbiter and dismissed the appeal.

Claiming grave abuse of discretion on the part of the public respondents,

Durabuilt filed the instant petition.chanroblesvirtualawlibrary

Backwages, in general, are granted on grounds of equity for earnings which a

worker or employee has lost due to his dismissal from work (New Manila Candy
Workers Union (NACONWA-PAFLU v. CIR, 86 SCRA 37).

The general principle is that an employee is entitled to receive as backwages all

the amounts he may have lost starting from the date of his dismissal up to the

3
time of his reinstatement (Capital Garment Corporation v. Ople, 117 SCRA 473;
New Manila Candy Workers’ Union (NACONWA-PAFLU) v. CIR, supra).

In a line of cases, this Court has established a policy fixing the amount of
backwages to a just and reasonable level without qualification or deduction
(Insular Life Assurance Co., Ltd. Employees’ Association-NATU v. Insular Life
Assurance Co., Ltd., 76 SCRA 501; Feati University Club v. Feati University, 58
SCRA 395; Mercury Drug Co., Inc. v. CIR, 56 SCRA 694). The respondents
center their attention on the above underlined portion of this policy. Hence,
their contention that the deductions cited by the petitioners cannot be made.

In their bid to recover a greater amount of backwages, the rationale of the

policy has escaped the respondents’ consideration. In Insular Life Assurance
Employees’ Association-NATU v. Insular Life Assurance Co., Ltd. (76 SCRA 50)
we held that to fix the amount of backwages without qualification or deduction
simply means that the workers are to be paid their backwages fixed as of the
time of their dismissal or strike without deduction for their earnings elsewhere
during their lay-off and without qualification of their backwages as thus fixed;
i.e. unqualified by any wage increases or other benefits that may have been
received by their co-workers who were not dismissed or did not go on strike.
The principle is justified "as a realistic, reasonable and mutually beneficial
solution for it relieves the employees from proving their earnings during their
lay-offs and the employer from submitting counterproofs. It was meant to
obviate the twin evils of idleness on the part of the employees and attrition and
undue delay in satisfying the award on the part of the employer" (New Manila
Candy Workers Union NACONWA-PAFLU v. CIR supra). The same was not to
establish an inflexible rule of computation of any backwages due an employee.

The age-old rule governing the relation between labor and capital, or
management and employee of a "fair day’s wage for a fair day’s labor" remains
as the basic factor in determining employees’ wages, and for that matter
backwages. If there is no work performed by the employee there can be no
wage or pay unless, of course, the laborer was able, willing and ready to work
but was illegally locked out, or suspended (SSS v. SSS Supervisors’ Union-
CUGCO, 117 SCRA 746).

The illegal dismissal of the private respondent is conceded by the petitioner. It

is willing to pay backwages. However, the petitioner argues that for days where
no work was required and could be done by its employees, no wages could
have been earned and, thereafter, lost by said employees to justify an award of
backwages. We quote with approval the Solicitor General’s comment, ** to
wit:chanrobles law library

4
"From the indubitable facts on record, it appears that petitioners have valid
reasons to claim that certain days should not be considered days worked for
purposes of computing private respondent’s backwages since their business
was not in actual operation due to brownouts or power interruption and the
retrenchment of workers they had during the period of private respondent’s
dismissal.

"It cannot be denied that during the past years particularly in 1983, there was
chronic electrical power interruption resulting to disruption of business
operations. To alleviate the situation, the government thru the Ministry of Trade
and Industry called on the industrial sector to resort to the so-called Voluntary
Loan Curtailment Plan (or VLCP), whereby brownouts or electrical power
interruption was scheduled by area. The program while it may have been called
"voluntary" was not so as electrical power consumers had no choice then due to
the prevailing energy crisis.

"Petitioners heeding the government’s call, participated in the VLCP as indicated

in their statement of comformity dated November 23, 1982. Thus, beginning
March 21, 1983 and every Wednesday thereafter, petitioner’s business (which
indicentally is recapping rubber tires) was not in actual operation. No less than
the former Minister of Trade and Industry expressed his gratitude to petitioners
for participating in the VLCP. Petitioners substantiated claim therefore, that the
days during which they were not in operation due to the VLCP should be
excluded in the number of days worked for purposes of computing private
respondents backwages stands reasonable and should have been considered by
the corporation auditing examiner.

"Moreover, as early as May 1978, the Ministry of Labor and Employment, thru
Policy Instruction No. 36, has said that —

"2. Brownouts running for more than twenty minutes may not be treated as
hours worked provided that any of the following conditions are present;

"a) The employees can leave their work place or go elsewhere whether within
or without the work premises; or

"b) The employees can use the time effectively for their own interest.

"It is of record that during electrical power interruptions, petitioners business

was not in operation. This was never disputed by private Respondent.

5
"Petitioners’ claim that the period (December 1983) during which they effected
retrenchment of workers owing to economic crisis then prevailing likewise
appears plausible. There is substantial evidence consisting of reports to MOLE
and Social Security System showing that petitioners had laid off workers due to
lack of raw materials. The petitioners payrolls submitted to support their
objection to computation indicate that the number of working days was reduced
from the normal weekly six working days to four working days for a great
number of petitioners’ workers. Obviously, private respondent could not have
been among those laid off, as at that time he was already dismissed by
petitioner." (Rollo, pp. 31-34).

Thus, we have held that where the failure of workers to work was not due to
the employer’s fault, the burden of economic loss suffered by the employees
should not be shifted to the employer. Each party must bear his own loss (SSS
v. SSS Supervisors’ Union-CUGCO, supra; Pan-American World Airways, Inc. v.
CIR, 17 SCRA 813). As pointed out by the Solicitor General —

‘. . . to allow payment of backwages of P24,316.68 as ordered by public

respondents instead of P3,834.16 as petitioners claim and which appears to be
just and reasonable under the circumstances of this case would not only be
unconscionable but would be grossly unfair to other employees who were not
paid when petitioners’ business was not in operation." (Rollo, p. 35).

Indeed, it would neither be fair nor just to allow respondent to recover

something he has not earned and could not have earned and to further penalize
the petitioner company over and above the losses it had suffered due to lack of
raw materials and the energy-saving programs of the government. The private
respondent cannot be allowed to enrich himself at the expense of the petitioner
company. The computation of backwages should be based on daily rather than
on monthly pay schedules where, as in the case at bar, such basis is more
realistic and accurate. (Compania Maritima v. United Seamen’s Union of the
Philippines, 65 SCRA 393).chanroblesvirtualawlibrary

In conclusion, we again quote the Solicitor General’s

comment:jgc:chanrobles.com.ph

"Finally, what strengthens petitioners claim for mitigated liability is their

evident good faith as manifested by their reinstatement of private respondent
while the case for illegal dismissal was still pending and their willingness to pay
backwages. While it is true that as a general rule order of reinstatement carries
with it an award of backwages (Art. 280, Labor Code) this Honorable Court did
not only mitigate but absolved employers from liability of backwages where

6
good faith is evident (Findlay Millar Timber Co. v. PLASLU, 6 SCRA 26;
Cromwell Com. Employees & Laborers Union v. CIR, 13 SCRA 259, Norton and
Harrison Labor Union v. Harrison Co. Inc. 15 SCRA 310; PAL v. PALEA, 57 SCRA
489; Cruz v. MOLE, 120 SCRA 15). There is no indication, to paraphrase this
Honorable Court’s ruling in Pantranco North Express Inc. v. NLRC (126 SCRA
526) that private respondent was a ‘victim of arbitrary and high handed
action." (Rollo, pp. 34-35).

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The

order of the Labor Arbiter, Amelia M. Guloy in NLRC Case No. NCR-7-3162083,
dated October 23, 1985, as affirmed by the NLRC is SET ASIDE. The petitioner
is ordered to pay private respondent his backwages from the time he was
terminated up to the time he was actually reinstated computed on the basis of
the number of days when petitioner’s business was in actual operation. The
number of days where no work was required and could be done by petitioner’s
employees on account of shutdowns due to electrical power interruptions,
machine repair, and lack of raw materials are not considered hours worked for
purposes of computing the petitioner’s obligation to respondent employee. In
no case shall the award exceed three year’s backpay as above computed.

SO ORDERED.

Fernan, Feliciano, Bidin and Cortes, JJ., concur.

7
G.R. No. L-98368 December 15, 1993

OPULENCIA ICE PLANT AND STORAGE AND/OR DR. MELCHOR

OPULENCIA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), LABOR ARBITER
NUMERIANO VILLENA AND MANUEL P. ESITA, respondents.

Inocentes, De Leon, Leogardo, Atienza, Magnaye & Azucena (IDLAMA) Law Offices for
petitioners.

Noli J. De los Santos for private respondent.

BELLOSILLO, J.:

MANUEL P. ESITA was for twenty (20) years a compressor operator of Tiongson Ice Plant
in San Pablo City. In 1980 he was hired as compressor operator-mechanic for the ice
plants of petitioner Dr. Melchor Opulencia located in Tanauan, Batangas, and Calamba,
Laguna. Initially assigned at the ice plant in Tanauan, Esita would work from seven o'clock
in the morning to five o'clock in the afternoon receiving a daily wage of P35.00.

In 1986, Esita was transferred to the ice plant in Calamba, which was then undergoing
overhauling, taking the place of compressor operator Lorenzo Eseta, who was relieved
because he was already old and weak. For less than a month, Esita helped in the
construction-remodeling of Dr. Opulencia's house.

On 6 February 1989, for demanding the correct amount of wages due him, Esita was
dismissed from service. Consequently, he filed with Sub-Regional Arbitration Branch IV,
San Pablo City, a complaint for illegal dismissal, underpayment, non-payment for overtime,
legal holiday, premium for holiday and rest day, 13th month, separation/retirement pay and
allowances against petitioners.

Petitioners deny that Esita is an employee. They claim that Esita could not have been
employed in 1980 because the Tanauan ice plant was not in operation due to low voltage
of electricity and that Esita was merely a helper/peon of one of the contractors they had
engaged to do major repairs and renovation of the Tanauan ice plant in 1986. Petitioners
further allege that when they had the Calamba ice plant repaired and expanded, Esita
likewise rendered services in a similar capacity, and thus admitting that he worked as a
helper/peon in the repair or remodeling of Dr. Opulencia's residence in Tanauan.

Opulencia likewise maintains that while he refused the insistent pleas of Esita for
employment in the ice plants due to lack of vacancy, he nonetheless allowed him to stay in
the premises of the ice plant for free and to collect fees for crushing or loading ice of the
customers and dealers of the ice plant. Opulencia claims that in addition, Esita enjoyed free
8
electricity and water, and was allowed to cultivate crops within the premises of the ice plant
to augment his income. Petitioners however admit that "following the tradition of
'pakikisama' and as a token of gratitude of the part of the complainant (Esita), he helps in
the cleaning of the ice plant premises and engine room whenever he is requested to do so,
and this happens only (at) twice a month."

On 8 December 1989, Labor Arbiter Nemeriano D. Villena rendered a decision 1 finding the
existence of an employer-employee relationship between petitioners and Esita and
accordingly directed them to pay him P33,518.02 representing separation pay,
underpayment of wages, allowances, 13th month, holiday, premium for holiday, and rest
day pays. The claim for overtime pay was however dismissed for lack of basis, i.e., Esita
failed to prove that overtime services were actually rendered.

On 29 November 1990, the Third Division of the National Labor Relations Commission, in
Case No. RAB-IV-2-2206-89, affirmed the decision of Labor Arbiter Villena but reduced the
monetary award to P28,344.60 as it was not proven that Esita worked every day including
rest days and on the days before the legal holidays. On 26 March 1991, petitioners' motion
for reconsideration was denied.

In this present recourse, petitioners seek reversal of the ruling of public respondents Labor
Arbiter and NLRC, raising the following arguments: that public respondents have no
jurisdiction over the instant case; that Esita's work in the repair and construction of Dr.
Opulencia's residence could not have ripened into a regular employment; that petitioners'
benevolence in allowing Esita to stay inside the company's premises free of charge for
humanitarian reason deserves commendation rather than imposition of undue penalty; that
Esita's name does not appear in the payrolls of the company which necessarily means that
he was not an employee; and, that Esita's statements are inconsistent and deserving of
disbelief. On 13 May 1991, petitioners' prayer for a temporary restraining order to prevent
respondents from enforcing the assailed resolutions of NLRC was granted.

The instant petition lacks merit, hence, must be dismissed.

Petitioners allege that there is no employer-employee relationship between them and Esita;
consequently, public respondents have no jurisdiction over the case. Petitioners even go to
the extent of asserting that "in case like the one at bar where employer-employee
relationship has been questioned from the very start, Labor Arbiters and the NLRC have no
jurisdiction and should not assume jurisdiction therein."

While the Labor Arbiter and the NLRC may subsequently be found without jurisdiction over
a case when it would later appear that no employer-employee relationship existed between
the contending parties, such is not the situation in this case where the employer-employee
relationship between the petitioners and Esita was clearly established. If the argument of
petitioners were to be allowed, then unscrupulous employers could readily avoid the
jurisdiction of the Labor Arbiters and NLRC, and may even elude compliance with labor
laws only on the bare assertion that an employer-employee relationship does not exist.

9
Petitioners further argue that "complainant miserably failed to present any documentary
evidence to prove his employment. There was no time sheet, pay slip and/or payroll/cash
voucher to speak of. Absence of these material documents are necessary fatal to
complainant's cause."

We do not agree. No particular form of evidence is required to prove the existence of an

employer-employee relationship. Any competent and relevant evidence to prove the
relationship may be admitted. For, if only documentary evidence would be required to show
that relationship, no scheming employer would ever be brought before the bar of justice, as
no employer would wish to come out with any trace of the illegality he has authored
considering that it should take much weightier proof to invalidate a written
instrument. 2 Thus, as in this case where the employer-employee relationship between
petitioners and Esita was sufficiently proved by testimonial evidence, the absence of time
sheet, time record or payroll has become inconsequential.

The petitioners' reliance on Sevilla v. Court of Appeals 3 is misplaced. In that case, we did
not consider the inclusion of employer's name in the payroll as an independently crucial
evidence to prove an employer-employee relation. Moreover, for a payroll to be utilized to
disprove the employment of a person, it must contain a true and complete list of the
employees. But, in this case, the testimonies of petitioners' witnesses admit that not all the
names of the employees were reflected in the payroll.

In their Consolidated Reply, petitioners assert that "employees who were absent were
naturally not included in the weekly payrolls." 4 But this simply emphasizes the obvious.
Petitioners' payrolls do not contain the complete list of the employees, so that the payroll
slips cannot be an accurate basis in determining who are and are not their employees. In
addition, as the Solicitor General observes: ". . . . the payroll slips submitted by petitioners
do not cover the entire period of nine years during which private respondent claims to have
been employed by them, but only the periods from November 2 to November 29, 1986 and
April 26 to May 30, 1987 . . . . It should be noted that petitioners repeatedly failed or
refused to submit all payroll slips covering the period during which private respondent
claims to have been employed by them despite repeated directives from the Labor Arbiter .
. . ." 5 In this regard, we can aptly apply the disputable presumption that evidence willfully
suppressed would be adverse if produced.6

Petitioners further contend that the claim of Esita that he worked from seven o'clock in the
morning to five o'clock in the afternoon, which is presumed to be continuous, is hardly
credible because otherwise he would not have had the time to tend his crops. 7 As against
this positive assertion of Esita, it behooves petitioners to prove the contrary. It is not
enough that they raise the issue of probability, nay, improbability, of the conclusions of
public respondents based on the facts bared before them, for in case of doubt, the factual
findings of the tribunal which had the opportunity to peruse the conflicting pieces of
evidence should be sustained.

10
The petitioners point out that even granting arguendo that Esita was indeed a mechanic, he
could never be a regular employee because his presence would be required only when
there was a need for repair. We cannot sustain this argument. This circumstance cannot
affect the regular status of employment of Esita. An employee who is required to remain on
call in the employer's premises or so close thereto that he cannot use the time effectively
and gainfully for his own purpose shall be considered as working while on call. 8 In sum, the
determination of regular and casual employment 9 is not affected by the fact that the
employee's regular presence in the place of work is not required, the more significant
consideration being that the work of the employee is usually necessary or desirable in the
business of the employer. More importantly, Esita worked for 9 years and, under the Labor
Code, "any employee who has rendered at least one year of service, whether such service
is continuous or broken, shall be considered a regular employee with respect to that activity
in which he is employed . . . ." 10

The petitioners would give the impression that the repair of the ice plant and the renovation
of the residence of Dr. Opulencia were voluntarily extended by Esita because "[r]espondent
did it on their (sic) own." Unfortunately for petitioners, we cannot permit these baseless
assertions to prevail against the factual findings of public respondents which went through
the sanitizing process of a public hearing. The same observation may be made of the
alleged inconsistencies in Esita's testimonies. Moreover, on the claim that Esita's
construction work could not ripen into a regular employment in the ice plant because the
construction work was only temporary and unrelated to the ice-making business, needless
to say, the one month spent by Esita in construction is insignificant compared to his nine-
year service as compressor operator in determining the status of his employment as such,
and considering further that it was Dr. Opulencia who requested Esita to work in the
construction of his house.

In allowing Esita to stay in the premises of the ice plant and permitting him to cultivate
crops to augment his income, there is no doubt that petitioners should be commended;
however, in view of the existence of an employer-employee relationship as found by public
respondents, we cannot treat humanitarian reasons as justification for emasculating or
taking away the rights and privileges of employees granted by law. Benevolence, it is said,
does not operate as a license to circumvent labor laws. If petitioners were genuinely
altruistic in extending to their employees privileges that are not even required by law, then
there is no reason why they should not be required to give their employees what they are
entitled to receive. Moreover, as found by public respondents, Esita was enjoying the same
privileges granted to the other employees of petitioners, so that in thus treating Esita, he
cannot be considered any less than a legitimate employee of petitioners.

WHEREFORE, there being no grave abuse of discretion on the part of public respondents,
the instant petition is DISMISSED. Accordingly, the restraining order we issued on 13 May
1991 is LIFTED.

SO ORDERED. Cruz, Davide, Jr. and Quiason, JJ., concur.

11
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-15422 November 30, 1962

NATIONAL DEVELOPMENT COMPANY, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and NATIONAL TEXTILE WORKERS
UNION, respondents.

Government Corporate Counsel Simeon M. Gopengco and Lorenzo R. Mosqueda for

petitioner.
Eulogio R. Lerum for respondent National Textile Workers Union.
Mariano B. Tuason for respondent Court of Industrial Relations.

REGALA, J.:

This is a case for review from the Court of Industrial Relations. The pertinent facts are the
following:

At the National Development Co., a government-owned and controlled corporation, there

were four shifts of work. One shift was from 8 a.m. to 4 p.m., while the three other shifts
were from 6 a.m. to 2 p.m; then from 2 p.m. to 10 p.m. and, finally, from 10 p.m. to 6 a.m. In
each shift, there was a one-hour mealtime period, to wit: From (1) 11 a.m. to 12 noon for
those working between 6 a.m. and 2 p.m. and from (2) 7 p.m. to 8 p.m. for those working
between 2 p.m. and 10 p.m.

The records disclose that although there was a one-hour mealtime, petitioner nevertheless
credited the workers with eight hours of work for each shift and paid them for the same
number of hours. However, since 1953, whenever workers in one shift were required to
continue working until the next shift, petitioner instead of crediting them with eight hours of
overtime work, has been paying them for six hours only, petitioner that the two hours
corresponding to the mealtime periods should not be included in computing compensation.
On the other hand, respondent National Textile Workers Union whose members are
employed at the NDC, maintained the opposite view and asked the Court of Industrial
Relations to order the payment of additional overtime pay corresponding to the mealtime
periods.

After hearing, Judge Arsenio I. Martinez of the CIR issued an order dated March 19, 1959,
holding that mealtime should be counted in the determination of overtime work and
accordingly ordered petitioner to pay P101,407.96 by way of overtime compensation.
Petitioner filed a motion for reconsideration but the same was dismissed by the CIR en
banc on the ground that petitioner failed to furnish the union a copy of its motion.
12
Thereafter, petitioner appealed to this Court, contending, first, that the CIR has no
jurisdiction over claims for overtime compensation and, secondary that the CIR did not
make "a correct appraisal of the facts, in the light of the evidence" in holding that mealtime
periods should be included in overtime work because workers could not leave their places
of work and rest completely during those hours.

In support of its contention that the CIR lost its jurisdiction over claims for overtime pay
upon the enactment of the Industrial Peace Act (Republic Act No. 875), petitioner cites a
number of decisions of this Court. On May 23, 1960, however, We ruled in Price
Stabilization Corp. v. Court of Industrial Relations, et al., G.R. No. L-13206, that

Analyzing these cases, the underlying principle, it will be noted in all of them, though
not stated in express terms, is that where the employer-employee relationship is still
existing or is sought to be reestablished because of its wrongful severance, (as where
the employee seeks reinstatement) the Court of Industrial Relations has jurisdiction
over all claims arising out of, or in connection with the employment, such as those
related to the Minimum Wage Law and the Eight-Hour Labor Law. After the
termination of their relationship and no reinstatement is sought, such claims become
mere money claims, and come within the jurisdiction of the regular courts,

We are aware that in 2 cases, some statements implying a different view have been
made, but we now hold and declare the principle set forth in the next preceding
paragraph as the one governing all cases of this nature.

This has been the constant doctrine of this Court since May 23, 1960.1

A more recent definition of the jurisdiction of the CIR is found in Campos, et al. v. Manila
Railroad Co., et al., G.R. No. L-17905, May 25, 1962, in which We held that, for such
jurisdiction to come into play, the following requisites must be complied with: (a) there must
exist between the parties an employer-employee relationship or the claimant must seek his
reinstatement; and (b) the controversy must relate to a case certified by the President to
the CIR as one involving national interest, or must arise either under the Eight-Hour Labor
Law, or under the Minimum Wage Law. In default of any of these circumstances, the claim
becomes a mere money claim that comes under the jurisdiction of the regular courts. Here,
petitioner does not deny the existence of an employer-employee relationship between it
and the members of the union. Neither is there any question that the claim is based on the
Eight-Hour Labor Law (Com. Act No. 444, as amended). We therefore rule in favor of the
jurisdiction of the CIR over the present claim.

The other issue raised in the appeal is whether or not, on the basis of the evidence, the
mealtime breaks should be considered working time under the following provision of the
law;

The legal working day for any person employed by another shall be of not more than
eight hours daily. When the work is not continuous, the time during which the laborer

13
 is not working and can leave his working place and can rest completely shall not be
counted. (Sec. 1, Com. Act No. 444, as amended. Emphasis ours.)

It will be noted that, under the law, the idle time that an employee may spend for resting
and during which he may leave the spot or place of work though not the premises 2 of his
employer, is not counted as working time only where the work is broken or is not
continuous.

The determination as to whether work is continuous or not is mainly one of fact which We
shall not review as long as the same is supported by evidence. (Sec. 15, Com. Act No. 103,
as amended, Philippine Newspaper Guild v. Evening News, Inc., 86 Phil. 303).

That is why We brushed aside petitioner's contention in one case that workers who worked
under a 6 a.m. to 6 p.m. schedule had enough "free time" and therefore should not be
credited with four hours of overtime and held that the finding of the CIR "that claimants
herein rendered services to the Company from 6:00 a.m. to 6:00 p.m. including Sundays
and holidays, . . . implies either that they were not allowed to leave the spot of their working
place, or that they could not rest completely" (Luzon Stevedoring Co., Inc. v. Luzon Marine
Department Union, et al., G.R. No. L-9265, April 29, 1957).

Indeed, it has been said that no general rule can be laid down is to what constitutes
compensable work, rather the question is one of fact depending upon particular
circumstances, to be determined by the controverted in cases. (31 Am. Jurisdiction Sec.
626 pp. 878.)

In this case, the CIR's finding that work in the petitioner company was continuous and did
not permit employees and laborers to rest completely is not without basis in evidence and
following our earlier rulings, shall not disturb the same. Thus, the CIR found:

While it may be correct to say that it is well-high impossible for an employee to work
while he is eating, yet under Section 1 of Com. Act No. 444 such a time for eating can
be segregated or deducted from his work, if the same is continuous and the
employee can leave his working place rest completely. The time cards show that the
work was continuous and without interruption. There is also the evidence adduced by
the petitioner that the pertinent employees can freely leave their working place nor
rest completely. There is furthermore the aspect that during the period covered the
computation the work was on a 24-hour basis and previously stated divided into
shifts.

From these facts, the CIR correctly concluded that work in petitioner company was
continuous and therefore the mealtime breaks should be counted as working time for
purposes of overtime compensation.

Petitioner gives an eight-hour credit to its employees who work a single shift say from 6
a.m. to 2 p.m. Why cannot it credit them sixteen hours should they work in two shifts?

14
There is another reason why this appeal should dismissed and that is that there is no
decision by the CIR en banc from which petitioner can appeal to this Court. As already
indicated above, the records show that petitioner's motion for reconsideration of the order
of March 19, 1959 was dismissed by the CIR en banc because of petitioner's failure to
serve a copy of the same on the union.

Section 15 of the rules of the CIR, in relation to Section 1 of Commonwealth Act No. 103,
states:

The movant shall file the motion (for reconsideration), in six copies within five (5) days
from the date on which he receives notice of the order or decision, object of the
motion for reconsideration, the same to be verified under oath with respect to the
correctness of the allegations of fact, and serving a copy thereof personally or by
registered mail, on the adverse party. The latter may file an answer, in six (6) copies,
duly verified under oath. (Emphasis ours.)

In one case (Bien, et al. v. Castillo, etc., et al., G.R. No. L-7428, May 24, 1955), We
sustained the dismissal of a motion for reconsideration filed outside of the period provided
in the rules of the CIR. A motion for reconsideration, a copy of which has not been served
on the adverse party as required by the rules, stands on the same footing. For "in the very
nature of things, a motion for reconsideration against a ruling or decision by one Judge is in
effect an appeal to the Court of Industrial Relations, en banc," the purpose being "to
substitute the decision or order of a collegiate court for the ruling or decision of any judge."
The provision in Commonwealth Act No. 103 authorizing the presentation of a motion for
reconsideration of a decision or order of the judge to the CIR, en banc and not direct
appeal therefore to this Court, is also in accord with the principal of exhaustion of
administrative remedies before resort can be made to this Court. (Broce, et al., v. The
Court of Industrial Relations, et al., G.R. No. L-12367, October 29, 1959).

Petitioner's motion for reconsideration having been dismissed for its failure to serve a copy
of the same on the union, there is no decision of the CIR en banc that petitioner can bring
to this Court for review.

WHEREFORE, the order of March 19, 1959 and the resolution of April 27, 1959 are hereby
affirmed and the appeal is dismissed, without pronouncement as to costs.

Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon
and Makalintal concur.
Bengzon, C.J., took no part.

15
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-9265 April 29, 1957

LUZON STEVEDORING CO., INC., petitioner,

vs.
LUZON MARINE DEPARTMENT UNION and THE HON. MODESTO CASTILLO, THE
HON. JOSE S. BAUTISTA, THE HON. V. JIMENEZ YANSON and THE HON. JUAN L.
LANTING, Judges of the Court of Industrial Relations, respondents.

Perkins, Ponce Enrile and Associates for petitioner.

Mariano B. Tuason for respondent Judge of the Court of Industrial Relations.
Sioson, Roldan and Vidanes for respondent union.

FELIX, J.:

This case involves a petition for certiorari filed by the Luzon Stevedoring Co., Inc., to review
a resolution dated June 5, 1955, issued by the Court of Industrial Relations. On September
5, 1955, with leave of court, a supplemental petition was filed by said petitioner, and both
petitions were given due course by resolution of this Court of September 15, 1955. The
facts of the case may be summarized as follows:

On June 21, 1948, herein respondent Luzon Marine Department Union filed a petition with
the Court of Industrial Relations containing several demands against herein petitioner
Luzon Stevedoring Co., Inc., among which were the petition for full recognition of the right
of COLLECTIVE bargaining, close shop and check off. However, on July 18, 1948, while
the case was still pending with the CIR, said labor union declared a strike which was ruled
down as illegal by this Court in G.R. No. L-2660 promulgated on May 30, 1950. In view of
said ruling, the Union filed a "Constancia" with the Court of Industrial Relations praying that
the remaining unresolved demands of the Union presented in their original petition, be
granted. Said unresolved demands are the following:

a. Point No. 2.

That the work performed in excess of eight (8) hours he paid an overtime pay of 50
per cent the regular rate of pay, and that work performed on Sundays and legal
holidays be paid double the regular rate of pay.

b. Point No. 7.

16
 That all officers, engineers and crew members of motor tugboats who have not
received their pay corresponding to the second half of December, 1941, be paid
accordingly.

c. Point No. 11.

That Ciriaco Sarmiento, Chief Mate, M/V Marlin, Rafael Santos, Port Engineer, and
Lorenzo de la Cruz, Chief Engineer, M/V Shark who have been suspended without
justifiable cause and for union activities, be reinstated with pay from time of
suspension.

d. Point No. 12.

That all officers, engineers and crew members of the motor tugboats "Shark",
"Hearing", "Pike" and "Ray", who have been discharged without justifiable cause and
for union activities, be reinstate with pay from time of discharge. (p. 65-66, Record).

On the basis of these demands, the case was set for hearing and the parties submitted
their respective evidence, both oral and documentary, from June 8,1951, to January 7,
1954. In one of the hearings of the case, the original intervenor in Union de Obreros
Estibadores de Filipinas (UOEF), through counsel, moved for the withdraw al of said Union
from the case, which motion was granted by the Court.

After the parties had submitted exhaustive memoranda, the trial Judge rendered a decision
on February 10, 1955, finding that the company gave said employees 3 free meals every
day and about 20 minutes rest after each mealtime; that they worked from 6:00 am. to 6:00
p.m. every day including Sundays and holidays, and for work performed in excess of 8
hours, the officers, patrons and radio operators were given overtime pay in the amount of
P4 each and P2 each for the rest of the crew up to March, 1947, and after said date, these
payments were increased to P5 and P2.50, respectively, until the time of their separation or
the strike of July 19, 1948; that when the tugboats underwent repairs, their personnel
worked only 8 hours a day excluding Sundays and holidays; that although there was an
effort on the part of claimants to show that some had worked beyond 6:00 p.m., the
evidence was uncertain and indefinite and that demand was, therefore, denied; that
respondent Company, by the nature of its business and as defined by law (Section 18-b of
Commonwealth Act as amended) is considered a public service operator by the Public
Service Commission in its decision in case No. 3035-C entitled "Philippine Shipowners.
Association vs. Luzon Stevedoring Co., Inc., et al."(Exh. 23), and, therefore, exempt from
paying additional remuneration or compensation for work performed on Sundays and legal
holidays, pursuant to the provisions of section 4 of Commonwealth Act No. 444 (Manila
Electric Co. vs. Public Utilities Employees Association, 79 Phil., 408. 44 Off. Gaz., 1760);
and ruled that:

For the above reasons, the aforementioned employees are only entitled to receive
overtime pay for work rendered in excess of 8 hours on ordinary days including
Sundays and legal holidays.
17
 However, the respondent company has proved to the satisfaction of the Court that it
has paid its employees for such overtime work as shown above Exhs. 1 to 20-B).

It is, therefore, only a matter of computation whether such over time pay by the
respondent for overtime services rendered covers the actual overtime work
performed by the employees concerned equivalent to 25 per cent which is the
minimum rate fixed by law in the absence of other proof to justify the granting of more
beyond said minimum rate.

Demands Nos. 11 and 12 regarding the reinstatement to the service of the employees
named therein were denied and respondent Company was only or to pay the separation
pay and overtime work rendered by Ciriaco Sarmiento, Rafael Santos and Lorenzo de la
Cruz, after making the pronouncement that their separation or dismissal was not due to
union activities but for valid and legal grounds.

The Luzon Marine Department Union, through counsel, therefore, filed a motion for
reconsideration praying that the decision of February 10, 1955, be modified so as to
declare and rule that the members of the Union who had rendered services from 6:00 a.m.
to 6:00 p.m. were entitled to 4 hours' overtime pay; that allotted to the taking of their meals
should not be deducted from the 4 hours of overtime rendered by said employees, that the
amounts of P3 and P2 set aside for the daily meals of the employees be considered as part
of their actual compensation in determining the amount due to said employees separated
from the service without just cause be paid their unearned wages and salaries from the
date of their separation up to the time the decision in case L-2660 became final; and for
such other relief as may be just and equitable in the premises.

Luzon Stevedoring Co., Inc. also sought for the reconsideration of the decision only in so
far as it interpreted that the period during which a seaman is aboard a tugboat shall be
considered as "working time" for the purpose of the Eight-Hour-Labor Law.

In pursuance of Section 1 of Commonwealth Act No. 103, as amended by Commonwealth

Act No. 254 and further amended by Commonwealth Act No. 559, the motions for
reconsideration were passed upon by the Court en banc, and on June 6, 1955, a resolution
modifying the decision of February 10, 1955, was issued, in the sense that the 4 hours of
overtime work included in the regular daily schedule of work from 6:00 a.m. to 6:00 p.m.
should be paid independently of the so-called "coffee-money", after making a finding that
said extra amounts were given to crew members of some tugboats for work performed
beyond 6:00 p.m. over a period of some 16 weeks. The Company's motion for
reconsideration was denied.

From this resolution, the Luzon Stevedoring Co., Inc. filed the present petition
for certiorari and when the Court of Industrial Relations, acting upon said Company's
motion for clarification, ruled that the 20 minutes' rest given the claimants after mealtime
should not be deducted from the 4 hours of overtime worked performed by said claimants,
petitioner filed a supplemental petition for certiorari dated September 5, 1955, and both
petitions were given due course by this Court.
18
Respondent Luzon Marine Labor Union filed within the reglementary period a motion to
dismiss, which this Court considered as an answer by resolution of October 14, 1955,
alleging that the decision, resolution and order of the Court of Industrial Relations sought to
be reviewed by petitioner do not present any question of law, the issues in said CIR case
No. 147-V being purely factual. The respondent Judges of the Court of Industrial Relations,
represented by counsel, timely filed an answer likewise asserting that there could have
been no question of law involved or error of law committed by the said Judges in the
resolutions appealed from, same having been based on purely findings of fact.

In this instance, petitioner does not seek to alter the lower court's finding that the regular
daily schedule of work of the members of the herein respondent Union was from 6:00 a.m.
to 6:00 p.m. Petitioner, however, submits several "issues" which We will proceed to discuss
one after the other. They are the following:

I. Is the definition for "hours of work" as presently applied to dryland laborers equally
applicable to seamen? Or should a different criterion be applied by virtue of the fact that the
seamen's employment is completely different in nature as well as in condition of work from
that of a dryland laborer?

Petitioner questions the applicability to seamen of the interpretation given to the phrase
"hours of work" for the purpose of the Eight-Hour Labor Law, insinuating that although the
seamen concerned stayed in petitioner's tugboats, or merely within its compound, for 12
hours, yet their work was not continuous but interrupted or broken. It has been the
consistent stand of petitioner that while it is true that the workers herein were required to
report for work at 6:00 a.m. and were made to stay up to 6:00 p.m., their work was not
continuous and they could have left the premises of their working place were it not for the
inherent physical impossibility peculiar to the nature of their duty which prevented them
from leaving the tugboats. It is the Company's defense that a literal interpretation of what
constitutes non-working hours would result in absurdity if made to apply to seamen aboard
vessels in bays and rivers, and We are called upon to make an interpretation of the law on
"non-working hours" that may comprehend within its embrace not only the non-working
hours of laborers employed in land jobs, but also of that particular group of seamen, i.e.,
those employed in vessels plying in rivers and bays, since admittedly there is no need for
such ruling with respect to officers and crew of interisland vessels which have aboard 2
shifts of said men and strictly follow the 8-hour working period.

Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:

SEC. 1. The legal working day for any person employed by another shall be of not
more than eight hours daily. When the work is not continuous, the time during which
the laborer is not working AND CAN LEAVE HIS WORKING PLACE and can rest
completely, shall not be counted.

The requisites contained in this section are further implemented by contemporary

regulations issued by administrative authorities (Sections 4 and 5 of Chapter III, Article 1,
Code of Rules and Regulations to Implement the Minimum Wage Law).
19
For the purposes of this case, We do not need to set for seamen a criterion different from
that applied to laborers on land, for under the provisions of the above quoted section, the
only thing to be done is to determine the meaning and scope of the term "working place"
used therein. As We understand this term, a laborer need not leave the premises of the
factory, shop or boat in order that his period of rest shall not be counted, it being enough
that he "cease to work", may rest completely and leave or may leave at his will
the spot where he actually stays while working, to go somewhere else, whether within or
outside the premises of said factory, shop or boat. If these requisites are complied with, the
period of such rest shall not be counted.

In the case at bar We do not need to look into the nature of the work of claimant mariners
to ascertain the truth of petitioners allegation that this kind of seamen have had enough
"free time", a task of which We are relieved, for although after an ocular inspection of the
working premises of the seamen affected in this case the trial Judge declared in his
decision that the Company gave the complaining laborers 3 free meals a day with a recess
of 20 minutes after each meal, this decision was specifically amended by the Court en
banc in its Resolution of June 6, 1955, wherein it held that the claimants herein rendered
services to the Company from 6:00 a.m. to 6:00 p.m. including Sundays and holidays,
which implies either that said laborers were not given any recess at all, or that they were
not allowed to leave the spot of their working place, or that they could not rest completely.
And such resolution being on a question essentially of fact, this Court is now precluded to
review the same (Com. Act No. 103, Sec. 15, as amended by Sec. 2 of Com. Act No. 559;
Rule 44 of the Rules of Court; Kaisahan Ng Mga Manggagawa sa Kahoy sa Filipinas vs.
Gotamco Sawmill, 80 Phil., 521; Operators, Inc. vs. Pelagio, 99 Phil, 893, and others).

II. Should a person be penalized for following an opinion issued by the Secretary of Justice
in the absence of any judicial pronouncement whatsoever?

Petitioner cites Opinion No. 247, Series of 1941 of the Secretary of Justice to a query made
by the Secretary of Labor in connection with a similar subject matter as the one involved, in
this issue, but that opinion has no bearing on the case at bar because it refers to officers
and crew on board interisland boats whose situation is different from that of mariners or
sailors working in small tugboats that ply along bays and rivers and have no cabins or
places for persons that man the same. Moreover, We can not pass upon this second issue
because, aside from the fact that there appears nothing on record that would support
petitioner's assertion that in its dealing with its employees, it was guided by an opinion of
the Secretary of Justice, the issue involves a mere theoretical question.

III. When employees with full knowledge of the law, voluntarily agreed to work for so many
hours in consideration of a certain definite wage, and continue working without any protest
for a period of almost two years, is said compensation as agreed upon legally deemed and
retroactively presumed to constitute full payment for all services rendered, including
whatever overtime wages might be due? Especially so if such wages, though received
years before the enactment of the Minimum Wage Law, were already set mostly above said
minimum wage?
20
IV. The members set of respondent Union having expressly manifested acquiescence over
a period of almost two years with reference to the sufficiency of their wages and having
made no protest whatsoever with reference to said compensation does the legal and
equitable principle of estoppel operate to bar them from making a claim for, or making any
recovery of, back overtime compensation?

We are going to discuss these two issues jointly. Section 6 of Commonwealth Act No. 444
provides:

Sec. 6. Any agreement or contract between the employer and the laborer or employee
contrary to the provisions of this Act shall be null and void ab initio.

In the case of the Manila Terminal Co. vs. Court of Industrial Relations et al., 91 Phil., 625,
48 Off. Gaz., 2725, this Court held:

The principles of estoppel and laches cannot be, invoked against employees or
laborers in an action for the recovery of compensation for past overtime work. In the
first place, it would be contrary to the spirit of the Eight-Hour Labor Law, under which.
as already seen, the laborers cannot waive their right to extra compensation. In the
second place, the law principally obligates the employer to observe it, so much so
that it punishes the employer for its violation and leaves the employee free and
blameless. In the third place, the employee or laborer is in such a disadvantageous
position as to be naturally reluctant or even apprehensive in asserting a claim which
may cause the employer to devise a way for exercising his right to terminate the
employment.

Moreover, if the principle of estoppel and laches is to be applied, it would bring about
a situation whereby the employee or laborer, can not expressly renounce the right to
extra compensation under the Eight-Hour Labor Law, may be compelled to
accomplish the same thing by mere silence or lapse of time, thereby frustrating the
purpose of the law by indirection.

This is the law on the matter and We certainly adhere, to it in the present case. We deem it,
however, convenient to say a few words of explanation so that the principle enunciated
herein may not lead to any misconstruction of the law in future cases. There is no question
that the right of the laborers to overtime pay cannot be waived. But there may be cases in
which the silence of the employee or laborer who lets the time go by for quite a long period
without claiming or asserting his right to overtime compensation may favor the inference
that he has not worked any such overtime or that his extra work has been duly
compensated. But this is not so in the case at bar. The complaining laborers have declared
that long before the filing of this case, they had informed Mr. Martinez, a sort of overseer of
the petitioner, that they had been working overtime and claiming the corresponding
compensation therefor, and there is nothing on record to show that the claimants, at least
the majority of them, had received wages in excess of the minimum wage later provided by
Republic Act No. 602, approved April 6, 1951. On the contrary, in the decision of the trial

21
Judge, it appears that 34 out of the 58 claimants received salaries less than the minimum
wage authorized by said Minimum Wage Law, to wit:

Per
month
1. Ambrosio Tañada oiler P82.50
……………..
but after passing
the examinations his
wages were increased
to P225 per month;
2. Patricio Santiago quartermaster 82.50
……………..
but after passing
the examinations his
wages were increased
to P225 per month;
3. Fidelino Villanueva oiler 82.50
……………
4. Pedro Filamor quartermaster 82.50
…………………
then his wage was
reduced to P67.50 per
month as cook;
5. Emiliano Irabon seaman 82.50
……………….
then his wage was
reduced to P60 and he
stayed for 1 month
only; it was increased
again to P67.50;
6. Juanito de Luna oiler 82.50
7. Benigno Curambao oiler 82.50
8. Salvador Mercadillo oiler 82.50
9. Nicasio Sta. Lucia cook 82.50
10. Damaso Arciaga seaman 82.50
11. Leonardo Patnugot oiler 82.50
12. Bienvenido oiler 82.50
Crisostomo
13. Isidro Malabanan cook 82.50
14. Saturnino seaman 67.50
Tumbokon
22
 15. Bonifacio Cortez quartermaster 82.50
16. Victorio Carillo cook 67.50
17. Francisco Atilano cook 67.50
18. Gualberto Legaspi seaman 67.50
19. Numeriano Juanillo quartermaster 82.50
20. Moises Nicodemus quartermaster 82.50
21. Arsenio Indiano seaman 82.50
22. Ricardo Autencio oiler 82.50
23. Mateo Arciaga seaman 67.50
24. Romulo quartermaster 82.50
Magallanes
25. Antonio Belbes seaman 67.50
26. Benjamin Aguirre quartermaster 82.50
27. Emilio Anastasio quartermaster 82.50
28. Baltazar Labrada oiler 82.50
29. Emeterio seaman 67.50
Magallanes
30. Agripino Laurente quartermaster 82.50
31. Roberto Francisco oiler 82.50
32. Elias Matrocinio seaman 82.50
33. Baltazar Vega seaman 67.50
34. Jose Sanchez oiler 82.50

Consequently, for lack of the necessary supporting evidence for the petitioner, the
inference referred to above cannot be drawn in this case.

V. Granting, without conceding, that any overtime pay in arrears is due, what is the extent
and rule of retro-activity with reference to overtime pay in arrears as set forth and
established by the precedents and policies of the Court of Industrial Relations in past
decisions duly affirmed by the Honorable Supreme Court?

VI. Is the grant of a sizeable amount as back overtime wages by the Court of Industrial
Relations in consonance with the dictates of public policy and the avowed national and
government policy on economic recovery and financial stability?

In connection with issue No. 5, petitioner advances the theory that the computation of the
overtime payment in arrears should be based from the filing of the petition. In support of
this contention, petitioner cites the case of Gotamco Lumber Co. vs- Court of Industrial
Relations, 85 Phil., 242; 47 Off. Gaz., 3421. This case is not in point; it merely declares that
Commonwealth Act No. 444 imposes upon the employer the duty to secure the permit for
overtime work, and the latter may not therefore be heard to plead his own negligence as
exemption or defense. The employee in rendering extra services at the request of his
23
employer has a right to assume that the latter has complied with the requirements of the
law and therefore has obtained the required permission from the Department of Labor (47
Off, Gaz., 3421). The other decisions of the Court of Industrial Relations cited by petitioner,
to wit: Cases 6-V, 7-V and 8-V, Gotamco & Co., Dy Pac & Co., Inc. and D. C. Chuan; Case
110-V, National Labor Union vs. Standard Vacuum Oil Co.; Case No. 76-v, Dee Cho
Workers, CLO vs. Dee Cho Lumber Co., and Case No. 70-V, National Labor Union vs.
Benguet Consolidated Mining Co., do not seem to have reached this Court and to have
been affirmed by Us.

It is of common occurrence that a workingman has already rendered services in excess of

the statutory period of 8 hours for some time before he can be led or he can muster enough
courage to confront his employer with a demand for payment thereof. Fear of possible
unemployment sometimes is a very strong factor that gags the man from asserting his right
under the law and it may take him months or years before he could be made to present a
claim against his employer. To allow the workingman to be compensated only from the date
of the filing of the petition with the court would be to penalize him for his acquiescence or
silence which We have declared in the case of the Manila Terminal Co. vs. CIR, supra, to
be beyond the intent of the law. It is not just and humane that he should be deprived of
what is lawfully his under the law, for the true intendent of Commonwealth Act No. 444 is to
compensate the worker for services rendered beyond the statutory period and this should
be made to retroact to the date when such services were actually performed.

Anent issue No. VI, petitioner questions the reasonableness of the law providing for the
grant of overtime wages. It is sufficient for Us to state here that courts cannot go outside of
the field of interpretation so as to inquire into the motive or motives of Congress in enacting
a particular piece of legislation. This question, certainly, is not within Our province to
entertain.

It may be alleged, however, that the delay in asserting the right to back overtime
compensation may cause an unreasonable or irreparable injury to the employer, because
the accumulation of such back overtime wages may become so great that their payment
might cause the bankruptcy or the closing of the business of the employer who might not
be in a position to defray the same. Perhaps this situation may occur, but We shall not
delve on it this time because petitioner does not claim that the payment of the back
overtime wages it is ordered to pay to its claimant laborers will cause the injury it foresees
or force it to close its business, a situation which it speaks of theoretically and in general.

VII. Should not a Court of Industrial Relations' resolution, en banc, which is clearly
unsupported in fact and in law, patently arbitrary and capricious and absolutely devoid of
sustaining reason, be declared illegal? Especially so, if the trial court's decision which the
resolution en banc reversed, is most detailed, exhaustive and comprehensive in its findings
as well as most reasonable and legal in its conclusions? This issue was raised by petitioner
in its supplemental petition and We have this much to say. The Court of Industrial Relations
has been considered "a court of justice" (Metropolitan Transportation Service vs.
Paredes,* G.R. No. L-1232, prom. January 12, 1948), although in another case. We said
24
that it is "more an administrative board than a part of the integrated judicial system of the
nation" (Ang Tibay vs. Court of Industrial Relations, 69 Phil., 635). But for procedural
purposes, the Court of Industrial Relations is a court with well-defined powers vested by the
law creating it and with such other powers as generally pertain to a court of justice (Sec.
20, Com. Act No. 103). As such, the general rule that before a judgment becomes final, the
Court that rendered the same may alter or modify it so as to conform with the law and the
evidence, is applicable to the Court of Industrial Relations (Connel Bros. Co.(Phil.) vs.
National Labor Union, G.R. No. L-3631, prom. January 30, 1956). The law also provides
that after a judge of the Court of Industrial Relations, duly designated by the Presiding
Judge therein to hear a particular case, had rendered a decision, any agrieved party may
request for reconsideration thereof and the judges of said Court shall sit together, the
concurrence of the 3 of them being necessary for the pronouncement of a decision, order
or award (See. 1, Com. Act No. 103). It was in virtue of these rules and upon motions for
reconsideration presented by both parties that resolution subject of the present petition was
issued, the Court en banc finding it necessary to modify a part of the decision of February
10, 1955, which is clearly within its power to do.

On the other hand, the issue under consideration is predicated on a situation which is not
obtaining in the case at bar, for, it presupposes that the resolutions en banc of the
respondent Court "are clearly unsupported in fact and in law, patently arbitrary and
capricious and absolutely devoid of any sustaining reason", which does not seem to be the
case as a matter of fact.

Wherefore, and on the strength of the foregoing consideration, the resolutions of the Court
of Industrial Relations appealed from are hereby affirmed, with costs against petitioner. It is
so ordered.

Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador. Concepcion, Reyes, J.B.L. and
Endencia, JJ., concur.

25
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-16275 February 23, 1961

PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILIPPINES), petitioner,

vs.
PAN AMERICAN EMPLOYEES ASSOCIATION, respondent.

Ross, Selph and Carrascoso for petitioner.

Jose Espinas for respondent.

REYES, J.B.L., J.:

Appeal by certiorari from the decision of the Court of Industrial Relations in Case No. 1055-
V dated October 10, 1959, and its resolution en banc denying the motion for
reconsideration filed by the petitioner herein.

The dispositive portion of the appealed decision reads: .

WHEREFORE, the Court orders the Chief of the Examining Division or his
representative to compute the overtime compensation due the aforesaid fourteen (14)
aircraft mechanic and the two employees from the Communication Department based
on the time sheet of said employees from February 23 1952 up to and including July
15, 1958 and to submit his report within 30 days for further disposition by the Court;
and the company shall show to the Court Examiner such time sheets an other
documents that may be necessary in the aforesaid computation; and two (2)
representatives for the company and two (2) representatives for the union shall be
chosen to help the Court Examiner in said computation.

The company is also ordered to permanently adopt the straight 8-hour shift inclusive
of meal period which is mutually beneficial to the parties.

SO ORDERED.

In this appeal, petitioner advances five proposition which, briefly, are as follows: (1) the
Industrial Court has no jurisdiction to order the payment of overtime compensation, it being
a mere monetary claim cognizable by regular courts; (2) the finding that the one-hour meal
period should be considered overtime work (deducting 15 minutes as time allotted for
eating) is not supported by substantial evidence; (3) the court below had no authority to
delegate its judicial functions by ordering the Chief of the Examining Division or his
representative to compute the overtime pay; (4) the finding that there was no agreement to
withdraw Case No. 1055-V in consideration of the wage increases in the Collective
26
Bargaining Contract (Exh. "A") is not supported by substantial evidence; and (5) the court
below had no authority to order the company to adopt a straight 8-hour shift inclusive of
meal period.

On the issue of jurisdiction over claims for overtime pay, we have since definitely ruled in a
recent decisions that the Industrial Court may properly take cognizance of such cases if, at
the time of the petition, the complainants were still in the service of the employer, or, having
been separated from such service, should ask for reinstatement; otherwise, such claims
should be brought before the regular courts (NASSCO v. CIR, et al., L-13888, April 29,
1960; FRISCO v. CIR, et al., L-13806, May 23, 1960; Board of Liquidators, et al. vs. CIR, et
al., L-15485, May 23, 1960; Sta. Cecilia, Sawmills Co. vs. CIR, L-14254 & L-14255, May
27, 1960; Ajax International Corp. v. Seguritan, L-16038, October 25, 1960; Sampaguita
Pictures, Inc., et al. vs. CIR, L-16404, October 25, 1960). Since, in the instant case there is
no question that the employees claiming overtime compensation were still in the service of
the company when the case was filed, the jurisdiction of the Court of Industrial Relations
cannot be assailed. In fact, since it is not pretended that, thereafter, the complainants were
discharged or otherwise terminated their relationship with the company for any reason, all
of said complainants could still be with the company up to the present.

Petitioner herein claims that the one-hour meal period should not be considered as
overtime work (after deducting 15 minutes), because the evidence showed that
complainants could rest completely, and were not in any manner under the control of the
company during that period. The court below found, on the contrary, that during the so
called meal period, the mechanics were required to stand by for emergency work; that if
they happened not to be available when called, they were reprimanded by the leadman;
that as in fact it happened on many occasions, the mechanics had been called from their
meals or told to hurry Employees Association up eating to perform work during this period.
Far from being unsupported by substantial evidence, the record clearly confirms the above
factual findings of the Industrial Court.

Similarly, this Court is satisfied with the finding that there was no agreement to withdraw
Case No. 1055-V in consideration of the wage increases obtained by the, union and set
forth in the Collective Bargaining Agreement Exhibit "A". As reasoned out by the court
below, such alleged agreement would have been incorporated in the contract if it existed.
The fact that the union filed a motion to dismiss without prejudice, after the Collective
Bargaining Contract had been signed, did not necessarily mean that it had agreed to
withdraw the case in consideration of the wage increases. The motion itself (Annex "B",
Petition for Certiorari) was expressly based on an understanding that the company would
"formulate a schedule of work which shall be in consonance with C. A. 444". All in all, there
is substantial evidence in the record to support the finding of the court below that no such
agreement was made.

It is next contended that in ordering the Chief of the Examining Division or his
representative to compute the compensation due, the Industrial Court unduly delegated its
judicial functions and thereby rendered an incomplete decision. We do not believe so.
27
Computation of the overtime pay involves a mechanical function, at most. And the report
would still have to be submitted to the Industrial Court for its approval, by the very terms of
the order itself. That there was no specification of the amount of overtime pay in the
decision did not make it incomplete, since this matter would necessarily be made clear
enough in the implementation of the decision (see Malate Taxicab & Garage, Inc. vs. CIR,
et al., L-8718, May 11, 1956).

The Industrial Court's order for permanent adoption of a straight 8-hour shift including the
meal period was but a consequence of its finding that the meal hour was not one of
complete rest, but was actually a work hour, since for its duration, the laborers had to be on
ready call. Of course, if the Company practices in this regard should be modified to afford
the mechanics a real rest during that hour (f. ex., by installing an entirely different
emergency crew, or any similar arrangement), then the modification of this part of the
decision may be sought from the Court below. As things now stand, we see no warrant for
altering the decision.

The judgment appealed from is affirmed. Costs against appellant.

Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion , Barrera, Paredes and Dizon,
JJ., concur.

28
G.R. No. L-13806 May 23, 1960

PRICE STABILIZATION CORPORATION, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and PRISCO WORKER'S UNION, ET
AL., respondents.

Govt. Corp. Counsel Simeon M. Gopengco and Lorenzo R. Mosqueda for petitioner.
Ezer R. Yutuc for the respondent CIR.
Vicente T. Ocampo for respondent Union.

BARRERA, J.:

This is a petition for review by certiorari taken by the Price Stabilization Corporation
(PRISCO) from the decision of the Court of Industrial Relations (in Case No. 840-V [6]) of
December 27, 1957.

It appears that under date of February 15, 1955, respondent PRISCO Worker's Union, a
labor organization duly registered with the Department of Labor, filed with respondent court,
a petition praying that herein petitioner-employer PRISCO be ordered to pay its present
employees, claimants-members of the said Union, their basic pay and at least 25 per cent
additional compensation for one hour overtime work they had previously rendered as
security guards of petitioner, from April 17, 1953 to January 13, 1954, and the additional
compensation of at least 25 per cent for the work they have been rendering on Sundays
and legal holidays, from March 7, 1954 and on.

On March 15, 1955, the petitioner filed an answer denying respondent Union's claim for
payment of one hour overtime work, asserting that such overtime, if rendered, not having
been authorized; although some of the said claimants had rendered work in Sundays and
legal holidays, the same had already been paid from March 6, 1954; and finally alleging
that the same claim for work on Sundays and legal holidays had already been withdrawn.

The case was thereafter heard and, after hearing, respondent court, on December 27,
1957, issued an order requiring petitioner to pay the said claimants, members of
respondent Union, their basic pay and 25 per cent additional compensation for the one
hour overtime work they had rendered from April 16, 1953 to January 13, 1954. However,
for lack of evidence and in view of a petition signed by 59 of the 131 claimants withdrawing
their claim for pay for work performed on Sundays and legal holidays, the court dismissed
the second claim.

On January 8, 1958, petitioner corporation filed a motion for reconsideration of said order,
which motion was resolved by respondent court, en banc, as follows: 2 judges voting for
straight denial; 2 judges voting for the setting aside of the order as null and void on the
ground of lack of jurisdiction; and 1 judge concurring in the denial of the motion for
29
reconsideration, on the ground that the question of lack of jurisdiction has not been raised
in the pleading. As a result; petitioner corporation has filed this present petition.

There are two questions of law to be determined in this case, to wit: (1) whether respondent
court had jurisdiction over the present claim for overtime pay filed by respondent Union;
and (2) whether the same court correctly applied Articles 1393 and 1396 to the new Civil
Code to the case.

As to the first question, there still seems to be some lack of clear and definite
understanding of the jurisdiction of the Court of Industrial Relations, with regards to money
claims of laborers or employees against their employers. The fact that in the present case
the judges themselves of the Court of Industrial Relations are divided on this matter, attests
to the existence of such misapprehension. It is well therefore to review some of the leading
decided cases touching on this point, for the purpose of clarifying this fundamental
question.

In the PAFLU vs. Tan Case,1 we held that the Court of Industrial Relations has jurisdiction
over cases (1) when the labor dispute affects an industry which is indispensable in the
national interest and is so certified by the President to the industrial court (Sec. 10, Rep.
Act No. 875); (2) when the controversy refers to the minimum wage under the Minimum
Wage Law (Rep. Act No. 602); (3) when it involves hours of employment under the Eight-
Hour Labor Law (Com. Act No. 444); and (4) when it involves an unfair labor practice (Sec.
5-a, Rep. Act No. 875).

Later, in the case of Detective and Protective Bureau Incorporated vs. Felipe Guevarra, et
al.,2 involving claims for refunds of deductions from respondents' salaries, payment of
additional compensation for work performed on Sundays and holidays, and for night work,
and grant of vacation and sick leave pay, this Court held that the Court of Industrial
Relations had jurisdiction, inasmuch as the claimants were all employees of the Detective
and Protective Bureau, Inc., at the time of filing of their claims in Case No. 764-V in the
Court of Industrial Relations. To the same effect is the case of Isaac Peral Bowling Alley vs.
United Employees Welfare Association, et al., (102 Phil., 219).

Subsequently, in the case of Santiago Aguilar vs. Jose Salumbides (G.R. No. L-10124,
prom, December 28, 1957), this Court declared that the Court of Industrial Relations had no
longer jurisdiction to hear and determine claims of ex-employees against their former
employer for overtime, wage differential, and separation pays.

Again, in the case of Roman Catholic Archbishop of Manila vs. Yanson, et al.,(G.R. No. L-
12341) and Elizalde and Co. Inc., vs. Yanson et al., (G.R. No. L-12345) jointly decide on
April 30, 1958, this Court, in a unanimous opinion, declared:

In the present case, it is apparent that the petition below is simply for the collection of
unpaid salaries and wages alleged to be due for the services rendered years ago. No
labor dispute appears to be presently involved since the petition itself indicates that
the employment has long terminated and petitioners are not asking that they be
30
 reinstated. Clearly, the petition does not fall under any of the cases enumerated in the
law as coming within the jurisdiction of the Industrial Court, so that it was error for that
court not to have ordered its dismissal.

Indeed, even under Commonwealth Act No. 103, as amended by Com. Act No. 559,
the court below could not have taken cognizance of the present case. For in order for
that court to acquire jurisdiction under that law, the requisites mentioned in section 4
thereof must all be present, one of them being that there must be an industrial or
agricultural dispute which is causing of likely to cause a strike or lockout. With the
employment already terminated years ago, this last mentioned requisite cannot be
supposed to still exist.

Then came the decision in the NASSCO vs. Almin, et al., case (104 Phil., 835;56 Off. Gaz.
[9] 1879) in which this Court upheld again the jurisdiction of the Court of Industrial Relations
to hear and determine the claim of respondents at the time presently and actually in the
employ of the petitioner — for overtime compensation for work they were then rendering
since 1950 on Sundays and holidays and even at night.

On the same theory, this Tribunal and the Chua Workers' Union (NLU) vs. City Automotive
Company, et al., case3 were the claimants for differential and overtime pays were former
employees of the respondent company, ruled that the Court of Industrial Relations had no
jurisdiction.

The latest case is that of Monares vs. CNS Enterprises, et al., (G.R. No. L-11749, prom.
May 29, 1959) in which this Court, speaking through the Chief Justice, held that the Court
of Industrial Relations and not the Court of First Instance, has jurisdiction where the
claimant, although no longer in the service of the employer, seeks in his petition the
payment of differential and overtime pay and his reinstatement.

Analyzing these cases, the underlying principle, it will be noted in all of them, though not
stated in express terms, is that where the employer-employee relationship is still existing or
is sought to be reestablished because of its wrongful severance (as where the employee
seeks reinstatement), the Court of Industrial Relations has jurisdiction over all claims
arising out of, or in connection with employment, such as those related to the Minimum
Wage Law and the Eight-Hour Labor Law. After the termination of the relationship and no
reinstatement is sought, such claims becomes mere money claims, and come within the
jurisdiction of the regular courts.

We are aware that in 2 cases,4 some statements implying a different view have been made,
but we now hold and declare the principle set forth in the preceding paragraph as the one
governing all cases of this nature.

It appearing that in the present case, the respondents-claimants are, or at least were, at the
time of presenting their claims, actually in the employ of herein petitioner, the Court of
Industrial Relations correctly took cognizance of the case.

31
In respect of the second issue, it appears that claimants-security guards have been
employed and required to observe a 24-hour guard duty divided into 3 shifts of 8 hours
each. On April 15, 1953, the Assistant Chief Security Officer of petitioner corporation,
acting for the Chief Security Officer, issued a Memorandum (Annex A), directing the
Security guards to report for duty 2 hours in advance of the usual time for guard work.
Pursuant thereto, claimants had been rendering such overtime work until January 13, 1954
when the order was revoked after a change of management.

Petitioner, however, contends that said memorandum of the Assistant Chief Security
Officer was issued without authority and, therefore, it is not bound to pay for the alleged
overtime. But, as found by respondent court, shortly after the enforcement of the
aforementioned memorandum, the security guards protested to the management of
petitioner corporation, more particularly to Mr. Santiago de la Cruz, General Manager, Atty.
Graciano Borja, Director, and Mr. Espiritu, Director. Instead of revoking said memorandum
on the ground that it was unauthorized by the management, General Manager De la Cruz
told the security guards that the reason why it was being enforced, was to discipline them
and that their work was only light and that 1 hour was of no importance. This, the lower
court held, amounted to a tacit ratification of the memorandum, on the part of the said
official who, as claimed by petitioner itself, had the power to validly act for it. (See also Sec.
6, Exec. Order No. 350, series of 1950.) Hence, the lower court concluded, applying the
provisions of Articles 1393 and 13965 of the new Civil Code, that any defect, if any which
said memorandum of the Assistant Chief Security Officer may have at the time it was
constituted, was, therefore, corrected.

But petitioner urges that Articles 1393 and 1396 refer to voidable contracts and the
questioned memorandum is not such a contract but an order issued by one not authorized
and, therefore, is illegal and cannot be ratified tacitly.

This view is without merit. There is no question that a contract of employment exists
between petitioner and claimants-respondents, and that pursuant to the terms thereof, the
latter are to render 8 hours labor. When petitioner's official required respondents to render
an additional hour work, and the respondents had to comply (as non-compliance was
punishable and actually punished with disciplinary action), a supplemental contractual
obligation was created both under the terms of the original contract of employment and of
the Eight-hour Labor Law, that such additional work was to be compensated. That the
memorandum giving rise to this situation was originally authorized, did not make it illegal to
the extent of not being capable of ratification by the duly authorized official, the General
Manager of petitioner corporation. Hence, the lower court correctly applied Articles 1393
and 1396, upon the facts found by it in this case and amply supported by the record.
Wherefore, finding no error in the decision appealed from and the resolution upholding it,
the same are hereby affirmed, with costs against the petitioner. So ordered.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, and Gutierrez
David, JJ., concur.

32
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-59847 October 18, 1982

PHILIPPINES INTER-FASHION, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, SHERIFF'S OFFICE OF THE
NATIONAL LABOR RELATIONS COMMISSION, AND NATIONAL FEDERATION OF
LABOR UNIONS (NAFLU), respondents.

Francisco, De Castro, Zulueta and Reyes Law Offices for petitioner.

The Solicitor General for respondent NLRC.

Rolando M. Olalia for respondent NAFLU.

TEEHANKEE, J.:

Petitioner employer seeks to set aside the resolution of respondent commission of October
1, 1981 and February 9, 1982, respectively ordering the reinstatement with three months'
backwages of its 114 striking employees listed in the case record and represented by
respondent National Federation of Labor Unions (NAFLU) and denying reconsideration.

The established background facts as found by public respondent's commissioner are as

follows:

Sometime on 12 December 1979, the workers in the COMPANY grouped

themselves and organized a labor union known as the Philippine Inter-Fashion
Workers Union and thereafter directly affiliated the same with the NAFLU.

Believing that it has a majority of the more or less 600 employees, it filed on 26
December 1979 a petition for direct certification as the exclusive bargaining
agent of the employees which, as of the date of submission for resolution of this
case, remained unresolved.

Sometime in January 1980, the COMPANY conceived and decided to retrench

its employees and selected about 40 employees to be dismissed effective 20
February 1980 allegedly because of lack of work (Affidavit of Asterio Guanzon,
personnel assistant of the company; Annex "A" thereof).

33
Sometime on 8, 9 and 11 February 1980, Asterio Guanzon, Personnel Assistant
of the COMPANY, called about 20 of the affected employees and informed
them of the intended retrenchment and offered them to voluntarily resign and be
paid retrenchment benefit. Since said employees refused, Guanzon asked them
"to acknowledge receipt of the clearance application and the termination letter
but except for two (2) workers, they refused even to acknowledge receipt of the
forms. (Affidavit of Guanzon).

The following day, 12 February 1980, during breaktime at 9:15, about 200
employees boarded two buses and went to the Ministry of Labor and talked with
then Deputy Minister who advised them to return to their work. These
employees actually returned in the afternoon but stayed outside the compound.

On 14 February 1980, the employees returned to the Ministry of Labor and on

the same day obtained a Return to Work Order pertinently reading as follows:

... all workers of Inter-Fashion are hereby directed to return to work

and the management to take them back under the same terms and
conditions prior to the walkout/lockout. Parties are hereby enjoined
to maintain status quo until final determination of the case.

xxx xxx xxx

(Annex "L", NAFLU'S Position Paper)

The following day, 15 February 1980, the employees returned to the company
with the aforesaid Order and were allowed to enter the compound but they
merely stayed in the canteen because they were not given work on the pretext
that machines were undergoing repairs and servicing and because the sewing
lines were reorganized and workers were reassigned to new lines ...

On February 1980, more than 200 employees returned and reported for work
but again they were only made to stay at the canteen inside the compound and
were not allowed to work but they were nevertheless paid their wages from 12
February 1980 to 20 February 1980 (Company's Position Paper dated 13
March 1980).

On the same date, 20 February 1980, the COMPANY filed with this Ministry
"applications for clearance to terminate the workers who participated in the
(alleged) walkout for serious misconduct, effective March 1, 1980 placing the
affected employees under preventive suspension in the meantime."
(parenthesis supplied: Affidavit of Guanzon, personnel assistant).

Subsequently, the COMPANY hired "additional workers to be able to complete

twelve (12) production lines and to be able to deliver according to my

34
 production schedule." (Affidavit, Solito P. Sandoval, production services
manager).

On 20 October 1980, one hundred fifty (150) employees who were not re-
admitted before were allowed to return to work and in so doing withdrew their
case or complaint against the COMPANY (Annex "A"; Company's
Memorandum dated 18 March 1981), thereby leaving 114 employees still
subject of its clearance application.

The Solicitor General has correctly stated in his comment that "from these facts are derived
the following conclusions which are likewise undisputed: that petitioner engaged in an
illegal lockout while the NAFLU engaged in an illegal strike; that the unconditional offer of
the 150 striking employees to return to work and to withdraw their complaint of illegal
lockout against petitioner constitutes condonation of the illegal lock-out; and that the
unqualified acceptance of the offer of the150 striking employees by petitioner likewise
constitutes condonation of the illegal strike insofar as the reinstated employees are
concerned."

The issues at bar arise, however, from respondent commission's approval of its
commissioner's conclusions that (1) petitioner must be deemed to have waived its right to
pursue the case of illegal strike against the 114 employees who were not reinstated and
who pursued their illegal lockout claim against petitioner; and (2) the said 114 employees
are entitled to reinstatement with three months' backwages.

The Court approves the stand taken by the Solicitor General that there was no clear and
unequivocal waiver on the part of petitioner and on the contrary the record shows that it
tenaciously pursued its application for their dismissal, but nevertheless in view of the
undisputed findings of illegal strike on the part of the 114 employees and illegal lockout on
petitioner's part, both parties are in pari delicto and such situation warrants the restoration
of the status quo ante and bringing the parties back to the respective positions before the
illegal strike and illegal lockout through the reinstatement of the said 114 employees, as
follows:

The Bisaya case (102 Phil. 438) is inapplicable to the present case, because in
the former, there were only two strikers involved who were both reinstated by
their employer upon their request to return to work. However, in the present
case, there were more than 200 strikers involved, of which 150 who desired to
return to work were reinstated. The rest were not reinstated because they did
not signify their intention to return to work. Thus, the ruling cited in the Bisaya
case that the employer waives his defense of illegality of the strike upon
reinstatement of strikers is applicable only to strikers who signified their
intention to return to work and were accepted back ...

Truly, it is more logical and reasonable for condonation to apply only to strikers
who signified their intention to return and did return to work. The reason is
obvious. These strikers took the initiative in normalizing relations with their
35
 employer and thus helped promote industrial peace. However, as regards the
strikers who decided to pursue with the case, as in the case of the 114 strikers
herein, the employer could not be deemed to have condoned their strike,
because they had not shown any willingness to normalize relations with it. So, if
petitioner really had any intention to pardon the 114 strikers, it would have
included them in its motion to withdraw on November 17, 1980. The fact that it
did not, but instead continued to pursue the case to the end, simply means that
it did not pardon the, 114 strikers.

xxx xxx xxx

The finding of illegal strike was not disputed. Therefore, the 114 strikers
employees who participated therein are liable for termination (Liberal Labor
Union v. Phil. Can Co., 91 Phil. 72; Insurefco Employees Union v. Insurefco, 95
Phil. 761). On the other hard, the finding of illegal lockout was likewise not,
disputed. Therefore, the 114 employees affected by the lockout are also subject
to reinstatement. Petitioner, however, contends that the application for
readmission to work by the 150 strikers constitutes condonation of ,the lockout
which should likewise bind the l14 remaining strikers. Suffice it to say that the
150 strikers acted for themselves, not behalf of the 114 remaining strikers, and
therefore the latter could not be deemed to have condoned petitioner's
lockout.<äre||anº•1àw>

The findings show that both petitioner and the 114 strikers are in pari delicto, a
situation which warrants the maintenance of the status quo. This means that the
contending parties must be brought back to their respective positions before the
controversy; that is, before the strike. Therefore, the order reinstating the 114
employees is proper.

With such restoration of the status quo ante it necessarily follows, as likewise submitted by
the Solicitor General, that the petition must be granted insofar as it seeks the setting aside
of the award of three months' backwages to the 114 employees ordered reinstated on the
basis of the general rule that strikers are not entitled to backwages 1 (with some exceptions
not herein applicable, such as where the employer is guilty of oppression and union-busting
activities and strikers ordered reinstated are denied such reinstatement and therefore are
declared entitled to backwages from the date of such denial 2 ). More so, is the principle of
"no work, no pay" applicable to the case at bar, in view of the undisputed finding of illegality
of the strike.

ACCORDINGLY, judgment is hereby rendered affirming respondent commission's

Resolution insofar as it orders the reinstatement of the 114 employees but setting aside the
award therein for the payment of three months' backwages.

SO ORDERED.

Melencio-Herrera, Plana, Vasquez, Relova and Gutierrez, Jr., concur.

36
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. Nos. 64821-23 January 29, 1993

UNIVERSITY OF PANGASINAN FACULTY UNION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and UNIVERSITY OF
PANGASINAN, respondents.

Tanopo & Serafica for petitioner.

Hermogenes S. Decano for private respondents.

ROMERO, J.:

In the instant petition for mandamus and certiorari, petitioner union seeks to enjoin the
respondent National Labor Relations Commission (NLRC) to resolve, or direct the Labor
Arbiter to hear and decide, the merits of three of petitioner's unresolved complaints, and to
annul and set aside the resolution of the NLRC affirming the decision of the Executive
Labor Arbiter dismissing the petitioner's complaints for violation of certain labor standards
laws but requiring respondent university to integrate the cost of living allowance into the
basic pay of the covered employees and reminding it to pay its employees at intervals not
exceeding sixteen (16) days.

The uncontroverted facts show that on various dates, petitioner filed the following
complaints against the University of Pangasinan (University for brevity) before the
Arbitration Branch of the NLRC in Dagupan City:

1. October 14, 1980: for nonpayment of benefits under P.D. No. 1713 and
emergency cost of living allowance (ecola) to part-time teachers, and for prompt
and accurate computation of benefits under P.D. No. 451 and the payment of
ecolas;

2. November 7, 1980: for nonpayment of all ecolas to instructors from October

18-31, 1980;

3. November 20, 1980: for nonpayment of ecolas under P.D. Nos. 525, 1123,
1614, 1634, 1678 and 1713 for November 1-15, 1980, and extra loads during
typhoons "Nitang" and "Osang" on July 21 and 25, 1980, respectively;
37
 4. April 13, 1981: for violation of P.D. No. 1751 and nonpayment of extra loads
on February 12-13, 1980 (Anniversary celebration);

5. April 27, 1981: for nonpayment of all ecolas for April 1-15, 1981 to faculty
members who were also members of the union;

6. May 21, 1981: for violation of Wage Order No. 1 and delayed payment of
salaries; and

7. June 17, 1981: for nonpayment of salary differentials for summer under P.D.
No. 451.1

The Regional Director in San Fernando, La Union certified six (6) of these complaints to
Labor Arbiter Pedro Fernandez of the Dagupan City District Office of the then Ministry of
Labor and Employment for compulsory arbitration. 2 According to the petitioner, it was
made to understand by Fernandez that the seventh complaint should also be discussed in
its position paper. Accordingly, petitioner filed a position paper discussing the merits of all
the seven complaints. On the other hand, the University limited its discussion to only four:
the complaints filed on April 13, 1981, April 27, 1981, May 21, 1981 and June 17, 1981.
Petitioner was of the view that Executive Labor Arbiter Sotero L. Tumang adopted the
stand of the University on the four complaints and accordingly dismissed them in his
decision of January 25, 1982.3

Observing that in its position paper, the petitioner included matters which were "beyond the
scope of the issues alleged in the complaints," said Labor Arbiter discussed the four
complaints individually. On the April 13, 1981 complaint, he ruled that because at the time
P.D. No. 1123 took effect on May 1, 1977, the University had not increased its tuition fees,
there was of "nothing to integrate."4 However, from June 16, 1979 when the University
increased its tuition fees, it was obligated to cause the integration of the across-the-board
increase of P60.00 in emergency allowance into the basic pay as mandated by P.D. Nos.
1123 and 1751.

On the alleged nonpayment of extra loads handled by the employees on February 12 and
13, 1981 when classes were suspended, Tumang stated that Consuelo Abad, the
petitioner's president, had no cause to complain because her salary was fully paid and that,
since there were "no complainants for the alleged nonpayment of extra loads for two days,"
the issue had become academic.

With respect to the April 27, 1981 complaint, Tumang said that since the salary paid to
Consuelo Abad and other faculty members for the April 1-15, 1981 period had been earned
"as part of their salary for the ten-month period," she was no longer entitled to an
emergency cost of living allowance. He added that "payment of emergency cost of living
allowance is based on actual work performed except when they (employees) are on leave
with pay." Hence, because classes ended in March 1981, the teachers who did not report
for work could not be considered on leave with pay and, therefore, they were not entitled to
an emergency cost of living allowance.
38
As regards the May 21, 1981 complaint alleging violation of Wage Order No. 1, Tumang
found that the University had actually implemented the additional living allowance of P2.00
a day required therein. On the alleged delay in the payment of salaries of the employees,
he rationalized that delays could not be avoided but he reminded the University to pay its
employees on time.

The June 17, 1981 complaint was also resolved in favor of the University. Stating that P.D.
No. 451 which mandates salary increases is dependent on enrollment and allowable
deductions, Tumang ruled that, again, Consuelo Abad had no cause to complain as she
had been paid out of the allowable 12.74% for distribution which was a "substantial
compliance with P.D. No. 451." 5 The dispositive portion of the decision states:

IN THE LIGHT OF THE FOREGOING CONSIDERATION, the above-entitled

cases are dismissed for lack of merit. Respondent however, is required to
integrate the allowance of P60.00 under P.D. 1123 into the basic pay of the
covered employees if the same has not as yet been complied with. Respondent
is also reminded to pay the employees at intervals not exceeding sixteen (16)
days pursuant to Article 102 of the Labor Code.

SO ORDERED.

The petitioner appealed the said decision to the NLRC. In its resolution of June 20, 1993,
the NLRC affirmed the decision of Executive Labor Article Tumang. Hence, the instant
petition for mandamus and certiorari with the following prayer:

WHEREFORE, the foregoing premises considered, it is respectfully prayed that

this petition be given due course and that judgment issue:

1. Declaring petitioner as possessed with capacity to represent its members in

the complaints it filed thru its president, Miss Consuelo Abad, against private
respondent, and the complaints are pertaining to the members who are entitled
under the law to the claims sought herein, not to Miss Abad alone;

2. Annulling and setting aside the appealed resolution insofar as the issues of
nonpayment of Ecola for April 1-15, 1981 and nonpayment of salary differentials
for summer of 1981 under P.D. No. 451 are concerned;

3. Ordering private respondent to pay covered members of petitioner their Ecola

for April 1-15, 1981 and their salary differentials for summer of 1981 pursuant to
the mandate of P.D. 451;

4. Enjoining public respondent to resolve on the merits the issues of

nonpayment of extra loads of February 12-13, 1980 and violation of Wage
Order No. 1 which were properly brought on appeal to said office;

39
 5. Enjoining public respondent to resolve on the merits the issues or grievances
alleged in the complaints filed on October 14, November 7 and November 20,
all in 1980, which were not resolved by the labor arbiter but nonetheless
appealed to public respondents, or

6. Enjoining public respondent to order or direct the labor arbiter to resolve on

the merits the said issues or grievances alleged in the complaints mentioned in
the next preceding paragraph;

7. Attorney's fee in such amount as this Honorable Tribunal may deem just and
reasonable in the premises;

8. Ordering private respondent to pay costs of suit, including this appeal.

Petitioner further prays for safeguards and/or measures to insure the correct
computation of the amount of claims herein sought due to each covered
member of petitioner, and for such other reliefs just and equitable in the
premises.6

We shall first deal with the propriety of the special civil action of mandamus. In this regard,
petitioner contends that the NLRC should have, in the exercise of its appellate jurisdiction,
resolved the issues raised in the three (3) complaints filed on October 14, November 7 and
November 20, 1980 or, in the alternative, ordered the Labor Arbiter to hear and decide the
aforementioned three (3) complaints, it having the power of supervision over Labor
Arbiters.

Sec. 3, Rule 65 of the Rules of Court provides:

Sec. 3. Petition for Mandamus. — When any tribunal, corporation, board, or

person unlawfully neglects the performance of an act which the law specifically
enjoins as a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use and enjoyment of a right or office to which such
other is entitled, and there is no other plain, speedy and adequate remedy in
the ordinary course of law, the person aggrieved thereby may file a verified
petition in the proper court alleging the facts with certainty and praying that
judgment be rendered commanding the defendant, immediately or at some
other specified time, to do the act required to be done to protect the rights of the
petitioner, and to pay the damages sustained by the petitioner by reason of the
wrongful acts of the defendant.

As succinctly provided in this section, anyone who wishes to avail of the remedy
of mandamus must state in a verified petition "the facts with certainty." On account of this
requirement, mandamus is never issued in doubtful cases and showing of a clear and
certain right on the part of the petitioner is required. 7 Indeed, while the labor arbiter is duty
bound to resolve all complaints referred to him for arbitration and, therefore, he may be
compelled by mandamus to decide them (although not in any particular way or in favor of
40
anyone),8 we find that the peculiar circumstances in this case do not merit the issuance of
the writ of mandamus.

Petitioner admits that only six of the complaints were certified to Labor Arbiter Fernandez
for compulsory arbitration. It failed, however, to allege why this was the case or whether it
had exerted any effort to include the remaining complaint in the certification. What it
stresses is the alleged assurance of Labor Arbiter Fernandez that the seventh complaint
may be discussed in its position paper. It turned out, however, that, according to the
unrebutted allegation of the Solicitor General, Labor Arbiter Fernandez inhibited himself
from handling the cases referred to him as he was teaching at the University. Hence, Labor
Arbiter Fernandez forwarded the complaints to the Assistant Director for Arbitration in
Regional Office No. 1 in San Fernando, La Union for appropriate action. He should have
forwarded all of the complaints to the said Assistant Director, but it appears that Fernandez
turned over only four of them. In turn, the Assistant Director referred only complaints Nos.
5, 6 and 7, which had been docketed as RBI-C-24-81, LS-42-81 and LS-43-81, to
Executive Labor Arbiter Sotero L. Tumang for compulsory arbitration. However, while only
these three docket numbers appear on the caption of the decision, the same actually
resolved four complaints, as earlier mentioned. 9

From these facts, one may infer that there must have been a mishandling of the complaints
and/or the records of the cases. However, the petitioner failed to substantiate by evidence
such negligence on the part of the public respondents as to warrant the issuance of a writ
of mandamus. 10 Its officials even neglected the simple act of verifying from the MOLE
office in Dagupan City whether the records of all the cases filed had been forwarded to the
proper official who should resolve them. 11 Infact, nowhere in its pleadings 12 is there an
allegation to that effect.

On the contrary, the petitioner took Fernandez' words seriously and allowed the
proceedings to reach its inevitable conclusion. When it received a copy of the decision, the
petitioner should have taken note of Executive Labor Arbiter Tumang's observation therein
that it had discussed matters "beyond the scope of the issues alleged in the complaints." In
its memorandum of appeal, it should have prayed for the inclusion of the three complaints
inasmuch as in labor cases, an appeal may be treated as a motion for reconsideration or
vice-versa. 13 The fact that three complaints had been omitted did not escape the attention
of the NLRC which stated in its resolution that "since those cases were not consolidated it
is now too late to consolidate them" with the four decided cases. 14 We agree with the
NLRC that the said complaints should proceed separately as long as their resolution would
not conflict with the resolved
cases.15 It should be added that under Art. 217(b) of the Labor Code, the NLRC has
"exclusive appellate jurisdiction over all cases decided by the Labor Arbiters." Needless to
say, the NLRC could not have acted on matters outside of the cases appealed to it.

Petitioner's contention that the cases filed by Consuelo Abad as its president should affect,
not only herself, but all the other union members similarly situated as she was, is well
taken. The uncontroverted allegation of the petitioner is that it is the holder of Registration
41
Certificate No. 9865-C, having been registered with the then Ministry of Labor and
Employment on February 16, 1978. As such, petitioner possessed the legal personality to
sue and be sued under its registered name.16 Corollarily, its president, Consuelo Abad,
correctly filed the complaints even if some of them involved rights and interest purely or
exclusively appertaining to individual employees, it appearing that she signed the
complaints "for and in behalf of the University of Pangasinan Faculty Union." 17

The University's contention that petitioner had no legal personality to institute and
prosecute money claims must, therefore, fail. To quote then Associate Justice Teehankee
in Heirs of Teodelo M. Cruz v. CIR,18 "[w]hat should be borne in mind is that the interest of
the individual worker can be better protected on the whole by a strong union aware of its
moral and legal obligations to represent the rank and file faithfully and secure for them the
best wages and working terms and conditions. . . . Although this was stated within the
context of collective bargaining, it applies equally well to cases, such as the present
wherein the union, through its president, presented its individual members' grievances
through proper proceedings. While the complaints might not
have disclosed the identities of the individual employees claiming monetary benefits,19 such
technical defect should not be taken against the claimants, especially because the
University appears to have failed to demand a bill of particulars during the proceedings
before the Labor Arbiter.

On the merits of the petition, the NLRC did not abuse its discretion in resolving the appeal
from the decision of Executive Labor Arbiter Tumang except for the disallowance of the
emergency cost of living allowance to members of the petitioner. The Rules Implementing
P.D. No. 1713 which took effect on August 18, 1980 provide:

Sec. 6. Allowances of full-time and part-time employees. — Employees shall be

paid in full the monthly allowance on the basis of the scales provided in Section
3 hereof, regardless of the number of their regular working days if they incur no
absences during the month. If they incur absences without pay, the amounts
corresponding to the absences may be deducted from the monthly allowance
provided that in determining the equivalent daily allowance of such deduction,
the applicable monthly allowance shall be divided by thirty (30) days.

xxx xxx xxx

(Emphasis supplied).

This Section, which is a virtual reproduction of Section 12 of the old Rules Implementing
P.D. No. 1123, has been interpreted by this Court as requiring that the full amount of the
cost of living allowance mandated by law should be given monthly to each employee if the
latter has worked continuously for each month, regardless of the number of the regular
working days.20 But more apropos is the ruling of this Court in University of Pangasinan
Faculty Union v. University of Pangasinan and NLRC,21 a case involving the same parties
as in the instant petition and dealing with a complaint filed by the petitioner on December

42
18, 1981 seeking, among others, the payment of emergency cost of living allowances for
November 7 to December 5, 1981, a semestral break. The Court held therein:

. . . The "No work, no pay" principle does not apply in the instant case. The
petitioner's members received their regular salaries during this period. It is clear
from the . . . law that it contemplates a "no work" situation where the employees
voluntarily absent themselves. Petitioners, in the case at bar, certainly do
not, ad voluntatem absent themselves during semestral breaks. Rather, they
are constrained to take mandatory leave from work. For this, they cannot be
faulted nor can they be begrudged that which is due them under the law. To a
certain extent, the private respondent can specify dates when no classes would
be held. Surely, it was not the intention of the framers of the law to allow
employers to withhold employee benefits by the simple expedient of unilaterally
imposing "no work" days and consequently avoiding compliance with the
mandate of the law for those days.

As interpreted and emphasized in the same case, the law granting emergency cost of living
allowances was designed to augment the income of the employees to enable them to cope
with the rising cost of living and inflation. Clearly, it was enacted in pursuance of the State's
duty to protect labor and to alleviate the plight of the workers. To uphold private
respondent's interpretation of the law would be running counter to the intent of the law and
the Constitution.

WHEREFORE, the petition for mandamus is hereby DISMISSED. The decision of the
NLRC is AFFIRMED subject to the MODIFICATION that private respondent University of
Pangasinan shall pay its regular and fulltime teachers and employees emergency cost of
living allowance for the period April 1-15, 1981. Costs against private respondent.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Melo, JJ., concur.

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