Republic of the Philippines Supreme Court Manila

SECOND DIVISION

PRIMO E. CAONG !R. A"E#ANDER !. $RES%&IO an' "ORIANO D. DA"&(ON Petitioners

) *ersus )

AVE"INO REG&A"OS Respon'ent. G.R. No. +,-./0

Present1

CARPIO !. Chairperson

NAC2&RA PERA"$A A3AD an' MENDO4A !!.

Promul5ate'1

!anuar6 /7 /8++

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DECISION

NAC2&RA !.1

Is the polic6 of suspen'in5 'ri*ers pen'in5 pa6ment of arrears in their boun'ar6 obli5ations reasonable: $he Court of Appeals ;CA< ans=ere' the >uestion in the affirmati*e in its Decision?+@ 'ate' December +. /887 an' Resolution 'ate' !ul6 +7 /88,. In this petition for re*ie= on certiorari =e taAe a secon' looA at the issue an' 'etermine =hether the situation at bar merits the rela9ation of the application of the sai' polic6.

Petitioners Primo E. Caon5 !r. ;Caon5< Ale9an'er !. $res>uio ;$res>uio< an' "oriano D. Dalu6on ;Dalu6on< =ere emplo6e' b6 respon'ent A*elino Re5ualos un'er a boun'ar6 a5reement as 'ri*ers of his Beepne6s. In No*ember /88+ the6 file' separate complaints?/@ for ille5al 'ismissal a5ainst respon'ent =ho barre' them from 'ri*in5 the *ehicles 'ue to 'eficiencies in their boun'ar6 pa6ments.

Caon5 =as hire' b6 respon'ent in September +--0 an' became a permanent 'ri*er sometime in /888. In !ul6 /88+ he =as assi5ne' a bran') ne= Beepne6 for a boun'ar6 fee of PCC8.88 per 'a6. 2e =as suspen'e' on October -)+C /88+ for failure to remit the full amount of the boun'ar6. Conse>uentl6 he file' a complaint for ille5al suspension. &pon e9piration of the suspension perio' he =as rea'mitte' b6 respon'ent but he =as reassi5ne' to an ol'er Beepne6 for a boun'ar6 fee of PC88.88 per 'a6. 2e claime' that on No*ember - /88+ 'ue to the scarcit6 of passen5ers he =as onl6 able to remit P.88.88 to respon'ent. On No*ember ++ /88+ he returne' to =orA after his rest 'a6 but respon'ent barre' him from 'ri*in5 because of the 'eficienc6 in the boun'ar6 pa6ment. 2e plea'e' =ith respon'ent but to no a*ail.?D@

$res>uio =as emplo6e' b6 respon'ent as 'ri*er in Au5ust +--7. 2e became a permanent 'ri*er in +--,. In +--0 he =as assi5ne' to 'ri*e a ne= Beepne6 for a boun'ar6 fee of PC88.88 per 'a6. On No*ember 7 /88+ 'ue to the scarcit6 of passen5ers he =as onl6 able to remit P.C8.88. Ehen he returne' to =orA on No*ember 0 /88+ after his rest 'a6 he =as barre' b6 respon'ent because of the 'eficienc6 of PC8.88. 2e plea'e' =ith respon'ent but the latter =as a'amant.?.@

On the other han' Dalu6on starte' =orAin5 for respon'ent in March +--0. 2e became a permanent 'ri*er in !ul6 +--0. 2e =as assi5ne' to a relati*el6 ne= Beepne6 for a boun'ar6 fee of PC88.88 per 'a6. On No*ember , /88+ 'ue to the scarcit6 of passen5ers he =as onl6 able to pa6 P.,8.88 to respon'ent. $he follo=in5 'a6 respon'ent barre' him from 'ri*in5 his Beepne6. 2e plea'e' but to no a*ail.?C@

Durin5 the man'ator6 conference respon'ent manifeste' that petitioners =ere not 'ismisse' an' that the6 coul' 'ri*e his Beepne6s once the6 pai' their arrears. Petitioners ho=e*er refuse' to 'o so.

Petitioners a*erre' that the6 =ere ille5all6 'ismisse' b6 respon'ent =ithout Bust cause. $he6 maintaine' that respon'ent 'i' not compl6 =ith 'ue process re>uirements before terminatin5 their emplo6ment as the6 =ere not furnishe' notice apprisin5 them of their infractions an' another informin5 them of their 'ismissal. Petitioners claime' that respon'entFs offer 'urin5 the

man'ator6 conference to reinstate them =as an insincere afterthou5ht as sho=n b6 the =arnin5 5i*en b6 respon'ent that if the6 fail to remit the full amount of the boun'ar6 6et a5ain the6 =ill be barre' from 'ri*in5 the Beepne6s. Petitioners >uestione' respon'entFs polic6 of automaticall6 'ismissin5 the 'ri*ers =ho fail to remit the full amount of the boun'ar6 as it alle5e'l6 ;a< *iolates their ri5ht to 'ue processG ;b< 'oes not constitute a Bust cause for 'ismissalG ;c< 'isre5ar's the realit6 that there are 'a6s =hen the6 coul' not raise the full amount of the boun'ar6 because of the scarcit6 of passen5ers.

In his Position Paper respon'ent alle5e' that petitioners =ere lessees of his *ehicles an' not his emplo6eesG hence the "abor Arbiter ha' no Buris'iction. 2e claime' that he notice' that some of his lessees inclu'in5 petitioners =ere not full6 pa6in5 the 'ail6 rental of his Beepne6s. In a list =hich he attache' to the Position Paper it =as sho=n that petitioners ha' actuall6 incurre' arrears since the6 starte' =orAin5. $he list sho=e' that Caon5Fs total arrears amounte' to P+8 D+C.88 that of $res>uio =as P+8 ,78.88 =hile that of Dalu6on =as P7 0-8.88. 2e ma'e in>uiries an' 'isco*ere' that his lessees contracte' loans =ith thir' parties an' use' the income of the Beepne6s in pa6in5 the loans. $hus on No*ember . /88+ he 5athere' all the lessees in a meetin5 an' informe' them that effecti*e No*ember C /88+ those =ho =oul' fail to full6 pa6 the 'ail6 rental =oul' not be allo=e' to rent a Beepne6 on the follo=in5 'a6. 2e e9plaine' to them that the Beepne6s =ere ac>uire' on installment basis an' that he =as pa6in5 the monthl6 amortiHations throu5h the lease income. Most of the lessees alle5e'l6 accepte' the con'ition an' pai' their arrears. Petitioners ho=e*er 'i' not settle their arrears. Eorse their remittances =ere a5ain short of the re>uire' boun'ar6 fee. Petitioner Dalu6onFs rent pa6ment =as short of P/8.88 on No*ember C /88+ an' P08.88 on No*ember , /88+. On No*ember 7 /88+ it =as $res>uio =ho incurre' an arrear of P+88.88. On No*ember , an' - /88+ petitioner Caon5 =as in arrear of PC8.88 an' P+88.88 respecti*el6. Respon'ent stresse' that 'urin5 the man'ator6 conference he manifeste' that he =oul' rene= his lease =ith petitioners if the6 =oul' pa6 the arrears the6 incurre' 'urin5 the sai' 'ates.?7@

On March D+ /88D the "abor Arbiter 'eci'e' the case in fa*or of respon'ent thus1

E2EREIORE Bu'5ment is hereb6 ren'ere' DISMISSING the abo*e)entitle' cases for lacA of merit. 2o=e*er respon'ent Re5ualos is 'irecte' to accept bacA complainants Caon5 $res>uio an' Dalu6on as re5ular 'ri*ers of his passen5er Beepne6s after complainants ha*e pai' their respecti*e arreara5es the6 ha*e incurre' in the remittance of their respecti*e boun'ar6 pa6ments in the amount of P+C8.88 P+88.88 an' P+88.88. Complainants if still intereste' to =orA as 'ri*ers are hereb6 or'ere' to report to respon'ent Re5ualos =ithin fifteen ;+C< 'a6s from the finalit6 of this 'ecision. Other=ise failure to 'o so means forfeiture of their respecti*e emplo6ments.

Other claims of complainants are 'ismisse' for lacA of merit.

SO ORDERED.?,@

Accor'in5 to the "abor Arbiter an emplo6er)emplo6ee relationship e9iste' bet=een respon'ent an' petitioners. $he latter =ere not 'ismisse' consi'erin5 that the6 coul' 5o bacA to =orA once the6 ha*e pai' their arrears. $he "abor Arbiter opine' that as a 'isciplinar6 measure it is proper to impose a reasonable sanction on 'ri*ers =ho cannot pa6 their boun'ar6 pa6ments. 2e emphasiHe' that respon'ent ac>uire' the Beepne6s on loan or installment basis an' relie' on the boun'ar6 pa6ments to compl6 =ith his monthl6 amortiHations.?0@

Petitioners appeale' the 'ecision to the National "abor Relations Commission ;N"RC<. In its resolution?-@ 'ate' March D+ /88. the N"RC a5ree' =ith the "abor Arbiter an' 'ismisse' the appeal. It also 'enie' petitionersF motion for reconsi'eration.?+8@

Iorth=ith petitioners file' a petition for certiorari =ith the CA.

In its Decision?++@ 'ate' December +. /887 the CA foun' no 5ra*e abuse of 'iscretion on the part of the N"RC. Accor'in5 to the CA the emplo6er)emplo6ee relationship of the parties has not been se*ere' but merel6 suspen'e' =hen respon'ent refuse' to allo= petitioners to 'ri*e the Beepne6s =hile there =ere unpai' boun'ar6 obli5ations. $he CA pointe' out that the fact that it =as =ithin the po=er of petitioners to return to =orA is proof that there =as no termination of emplo6ment. $he con'ition that petitioners shoul' first pa6 their arrears onl6 for the perio' of No*ember C)- /88+ before the6 can be rea'mitte' to =orA is neither impossible nor unreasonable if their total unpai' boun'ar6 obli5ations an' the nee' to sustain the financial *iabilit6 of the emplo6erFs enterpriseJ=hich =oul' ultimatel6 re'oun' to the benefit of the emplo6eesJare taAen into consi'eration.?+/@

$he CA =ent on to rule that petitioners =ere not 'enie' their ri5ht to 'ue process. It pointe' out that the case 'oes not in*ol*e a termination of emplo6mentG hence the strict application of the t=in)notice rule is not =arrante'. Accor'in5 to the CA =hat is important is that petitioners =ere 5i*en the opportunit6 to be hear'. $he meetin5 con'ucte' b6 respon'ent on No*ember . /88+ ser*e' as sufficient notice to petitioners. Durin5 the sai' meetin5

respon'ent informe' his emplo6ees inclu'in5 petitioners to strictl6 compl6 =ith the polic6 re5ar'in5 remittances an' =arne' them that the6 =oul' not be allo=e' to taAe out the Beepne6s if the6 'i' not remit the full amount of the boun'ar6.?+D@

Dissatisfie' petitioners file' a motion for reconsi'eration but the CA 'enie' the motion in its Resolution 'ate' !ul6 +7 /88,.?+.@

Petitioners are no= before this Court resolutel6 ar5uin5 that the6 =ere ille5all6 'ismisse' b6 respon'ent an' that such 'ismissal =as ma'e in *iolation of the 'ue process re>uirements of the la=.

$he petition is =ithout merit.

In an action for certiorari petitioner must pro*e not merel6 re*ersible error but 5ra*e abuse of 'iscretion amountin5 to lacA or e9cess of Buris'iction on the part of respon'ent. Mere abuse of 'iscretion is not enou5h. It must be sho=n that public respon'ent e9ercise' its po=er in an arbitrar6 or 'espotic manner b6 reason of passion or personal hostilit6 an' this must be so patent an' so 5ross as to amount to an e*asion of a positi*e 'ut6 or to a *irtual refusal to perform the 'ut6 enBoine' or to act at all in contemplation of la=.?+C@

As correctl6 hel' b6 the CA petitioners faile' to establish that the N"RC committe' 5ra*e abuse of 'iscretion in affirmin5 the "abor ArbiterFs rulin5 =hich is supporte' b6 the facts on recor'.

It is alrea'6 settle' that the relationship bet=een Beepne6 o=nersKoperators an' Beepne6 'ri*ers un'er the boun'ar6 s6stem is that of emplo6er)emplo6ee an' not of lessor)lessee. $he fact that the 'ri*ers 'o not recei*e fi9e' =a5es but onl6 5et the amount in e9cess of the so)calle' Lboun'ar6M that the6 pa6 to the o=nerKoperator is not sufficient to ne5ate the relationship bet=een them as emplo6er an' emplo6ee.?+7@

$he "abor Arbiter the N"RC an' the CA uniforml6 'eclare' that petitioners =ere not 'ismisse' from emplo6ment but merel6 suspen'e' pen'in5 pa6ment of their arrears. Iin'in5s of fact of the CA particularl6 =here the6 are in absolute a5reement =ith those of the N"RC an' the "abor Arbiter are accor'e' not onl6 respect but e*en finalit6 an' are 'eeme' bin'in5 upon this Court so lon5 as the6 are supporte' b6 substantial e*i'ence.?+,@

Ee ha*e no reason to 'e*iate from such fin'in5s. In'ee' petitionersF suspension cannot be cate5oriHe' as 'ismissal consi'erin5 that there =as no intent on the part of respon'ent to se*er the emplo6er)emplo6ee relationship bet=een him an' petitioners. In fact it =as ma'e clear that petitioners coul' put an en' to the suspension if the6 onl6 pa6 their recent arrears. As it =as the suspension 'ra55e' on for 6ears because of petitionersF stubborn refusal to pa6. It =oul' ha*e been 'ifferent if petitioners complie' =ith the con'ition an' respon'ent still refuse' to rea'mit them to =orA. $hen there =oul' ha*e been a clear act of 'ismissal. 3ut such =as not the case. Instea' of pa6in5 petitioners e*en file' a complaint for ille5al 'ismissal a5ainst respon'ent.

Respon'entFs polic6 of suspen'in5 'ri*ers =ho fail to remit the full amount of the boun'ar6 =as fair an' reasonable un'er the circumstances. Respon'ent e9plaine' that he notice' that his 'ri*ers =ere 5ettin5 la9 in remittin5 their boun'ar6 pa6ments an' in fact herein petitioners ha' alrea'6 incurre' a consi'erable amount of arrears. 2e ha' to put a stop to it as he also relie' on these boun'ar6 pa6ments to raise the full amount of his monthl6 amortiHations on the Beepne6s. Demonstratin5 their obstinac6 petitioners on the 'a6s imme'iatel6 follo=in5 the implementation of the polic6 incurre' 'eficiencies in their boun'ar6 remittances.

It is acAno=le'5e' that an emplo6er has free rein an' enBo6s a =i'e latitu'e of 'iscretion to re5ulate all aspects of emplo6ment inclu'in5 the prero5ati*e to instill 'iscipline on his emplo6ees an' to impose penalties inclu'in5 'ismissal if =arrante' upon errin5 emplo6ees. $his is a mana5ement prero5ati*e. In'ee' the manner in =hich mana5ement con'ucts its o=n affairs to achie*e its purpose is =ithin the mana5ementFs 'iscretion. $he onl6 limitation on the e9ercise of mana5ement prero5ati*e is that the policies rules an' re5ulations on =orA)relate' acti*ities of the emplo6ees must al=a6s be fair an' reasonable an' the correspon'in5 penalties =hen prescribe' commensurate to the offense in*ol*e' an' to the 'e5ree of the infraction.?+0@

Petitioners ar5ue that the polic6 is unsoun' as it 'oes not consi'er the times =hen passen5ers are scarce an' the 'ri*ers are not able to raise the amount of the boun'ar6.

PetitionersF concern relates to the implementation of the polic6 =hich is another matter. A compan6 polic6 must be implemente' in such manner as =ill accor' social Bustice an' compassion to the emplo6ee. In case of noncompliance =ith the compan6 polic6 the emplo6er must consi'er the surroun'in5 circumstances an' the reasons =h6 the emplo6ee faile' to compl6. Ehen the circumstances merit the rela9ation of the application of the polic6 then its noncompliance must be e9cuse'.

In the present case petitioners merel6 alle5e' that there =ere onl6 fe= passen5ers 'urin5 the 'ates in >uestion. Such e9cuse is not acceptable =ithout an6 proof or at least an e9planation as to =h6 passen5ers =ere scarce at that time. It is simpl6 a bare alle5ation not =orth6 of belief. Ee also fin' the e9cuse unbelie*able consi'erin5 that petitioners incurre' the shorta5es on separate 'a6s an' it appears that onl6 petitioners faile' to remit the full boun'ar6 pa6ment on sai' 'ates.

&n'er a boun'ar6 scheme the 'ri*er remits the Lboun'ar6 M =hich is a fi9e' amount to the o=nerKoperator an' 5ets to earn the amount in e9cess thereof. $hus on a 'a6 =hen there are man6 passen5ers alon5 the route it is the 'ri*er =ho actuall6 benefits from it. It =oul' be unfair then if 'urin5 the times =hen passen5ers are scarce the o=nerKoperator =ill be ma'e to suffer b6 not 5ettin5 the full amount of the boun'ar6. &nless clearl6 sho=n or e9plaine' b6 an e*ent that irre5ularl6 an' ne5ati*el6 affecte' the usual number of passen5ers =ithin the route the scarcit6 of passen5ers shoul' not e9cuse the 'ri*er from pa6in5 the full amount of the boun'ar6.

Iinall6 =e sustain the CAFs fin'in5 that petitioners =ere not 'enie' the ri5ht to 'ue process. Ee thus >uote =ith appro*al its 'iscussion on this matter1

2a*in5 establishe' that the case at bench 'oes not in*ol*e termination of emplo6ment Ee fin' that the strict e*en ri5i' application of the t=in)notice rule is not =arrante'.

3ut the 'ue process safe5uar's are nonetheless still a*ailable to petitioners.

Due process is not a matter of strict or ri5i' or formulaic process. $he essence of 'ue process is simpl6 the opportunit6 to be hear' or as applie' to a'ministrati*e procee'in5s an opportunit6 to e9plain oneFs si'e or an opportunit6 to seeA a reconsi'eration of the action or rulin5 complaine' of. A formal or trial)t6pe hearin5 is not at all times an' in all instances essential as the 'ue process re>uirements are satisfie' =here the parties are affor'e' fair an' reasonable opportunit6 to e9plain their si'e of the contro*ers6 at han'. 9 9 9.

9999

In the case at bench pri*ate respon'ent upon fin'in5 that petitioners ha' consistentl6 faile' to remit the full amount of the boun'ar6 con'ucte' a meetin5 on No*ember . /88+ informin5 them to strictl6 compl6 =ith the polic6 re5ar'in5 their remittances an' =arne' them to 'iscontinue 'ri*in5 if the6 still faile' to remit the full amount of the boun'ar6.?+-@

E2EREIORE premises consi'ere' the petition is DENIED. $he Court of Appeals Decision 'ate' December +. /887 an' Resolution 'ate' !ul6 +7 /88, are AIIIRMED.

SO ORDERED.

AN$ONIO ED&ARDO 3. NAC2&RA Associate !ustice

EE CONC&R1

AN$ONIO $. CARPIO Associate !ustice Chairperson

DIOSDADO M. PERA"$A

Associate !ustice RO3ER$O A. A3AD Associate !ustice

!OSE CA$RA" MENDO4A Associate !ustice

A$$ES$A$ION

I attest that the conclusions in the abo*e Decision ha' been reache' in consultation before the case =as assi5ne' to the =riter of the opinion of the CourtFs Di*ision.

AN$ONIO $. CARPIO Associate !ustice Chairperson Secon' Di*ision

CER$IIICA$ION

Pursuant to Section +D Article VIII of the Constitution an' the Di*ision ChairpersonNs Attestation I certif6 that the conclusions in the abo*e Decision ha' been reache' in consultation before the case =as assi5ne' to the =riter of the opinion of the CourtFs Di*ision.

RENA$O C. CORONA Chief !ustice

?+@ Penne' b6 Associate !ustice Romulo V. 3orBa =ith Associate !ustices Si9to C. Marella !r. an' Mario V. "opeH concurrin5G rollo pp. D0)C.. ?/@ ?D@ ?.@ I'. at -/)-7. I'. at -0)--. I'. at +88.

?C@ ?7@ ?,@ ?0@ ?-@ ?+8@ ?++@ ?+/@ ?+D@ ?+.@ ?+C@

I'. at +88)+8+. I'. at ++/)++.. I'. at +D+. I'. at +/0)+D8. I'. at +0D. I'. at +07. I'. at CD. I'. at .D).0. I'. at C8)C+. I'. at C0. Sol*ic In'ustrial Corporation *. N"RC DC, Phil. .D8 .D0 ;+--0<.

?+7@ MartineH *. N"RC DD- Phil. +,7 +0/ ;+--,< citin5 National "abor &nion *. Din5lasan -0 Phil. 7.- 7C/)7CD ;+-C7<.

?+,@ San Mi5uel Corporation *. National "abor Relations Commission G.R. Nos. +.7+/+)// April +7 /880 CC+ SCRA .+8 .//. ?+0@ St. MichaelFs Institute *. Santos .// Phil. ,/D ,D/),DD ;/88+<.

?+-@

Rollo pp. C8)C+.

la=phil

$o'a6 is Satur'a6 !ul6 8, /8+/

Republic of the Philippines S&PREME CO&R$ Manila

EN 3ANC

G.R. No. ")7DD-

April /8 +-C.

MAN&E" "ARA E$ A". plaintiffs)appellants *s. PE$RONI"O DE" ROSARIO !R. 'efen'ant)appellee.

Manansala an' Manansala for appellants. Ramon ". Resurreccion for appellee.

MON$EMA(OR !.1

In +-C8 'efen'ant Petronilo 'el Rosario !r. o=ner of t=ent6)fi*e ta9i cabs or cars operate' a ta9i business un'er the name of OEa*al $a9i.O 2e emplo6e' amon5 others three mechanics an' .- chauffeurs or 'ri*ers the latter ha*in5 =orAe' for perio's ran5in5 from / to D, months. On September . +-C8 =ithout 5i*in5 sai' mechanics an' chauffeurs D8 'a6s a'*ance notice Del Rosario sol' his /C units or cabs to "a Mallorca a transportation compan6 as a result of =hich accor'in5 to the mechanics an' chauffeurs abo*e)mentione' the6 lost their Bobs because the "a Mallorca faile' to continue them in their emplo6ment. $he6 brou5ht this action a5ainst Del Rosario to reco*er compensation for o*ertime =orA ren'ere' be6on' ei5ht hours an' on Sun'a6s an' le5al holi'a6s an' one month salar6 ;mesa'a< pro*i'e' for in article D8/ of the Co'e of Commerce because the failure of their former emplo6er to 5i*e them one month notice. Subse>uentl6 the three mechanics uncon'itionall6 =ith're= their claims. So onl6 the .- 'ri*ers remaine' as plaintiffs. $he 'efen'ant file' a motion for 'ismissal of the complaint on the 5roun' that it state' no cause of action an' the trial court for the time bein5 'enie' the motion sa6in5 that it =ill be consi'ere' =hen the case =as hear' on the merits. After trial the complaint =as 'ismisse'. Plaintiffs appeale' from the or'er of 'ismissal to the Court of Appeals =hich $ribunal after fin'in5 onl6 >uestions of la= are in*ol*e' certifie' the case to us.

$he parties are a5ree' that the plaintiffs as chauffeurs recei*e' no fi9e' compensation base' on the hours or the perio' of time that the6 =orAe'. Rather the6 =ere pai' on the commission basis that is to sa6 each 'ri*er recei*e' /8 per cent of the 5ross returns or earnin5s from the operation of his ta9i cab. Plaintiffs claim that as a rule each 'ri*e operate' a ta9i +/ hours a 'a6 =ith 5ross earnin5s ran5in5 from P/8 to P/C recei*in5 therefrom the correspon'in5 /8 per cent share ran5in5 from P. to PC an' that in some cases especiall6 'urin5 Satur'a6s Sun'a6s an' holi'a6s =hen a 'ri*er =orAe' /. hours a 'a6 he 5rosse' from P.8 to PC8 thereb6 recei*in5 a share of from P0 to P+8 for the perio' of t=ent6)four hours.

$he reason 5i*en b6 the trial court in 'ismissin5 the complaint is that the 'efen'ant bein5 en5a5e' in the ta9i or transportation business =hich is a public utilit6 came un'er the e9ception pro*i'e' b6 the Ei5ht)2our "abor "a= ;Common=ealth Act No. ...<G an' because plaintiffs 'i' not =orA on a salar6 basis that is to sa6 the6 ha' no fi9e' or re5ular salar6 or remuneration other than the /8 per cent of their 5ross earnin5s Otheir situation =as therefore practicall6 similar to piece =orAers an' hence outsi'e the ambit of article D8/ of the Co'e of Commerce.O

Ior purposes of reference =e are repro'ucin5 the pertinent pro*isions of the Ei5ht)2our "abor "a= namel6 sections + to ..

SEC$ION +. $he le5al =orAin5 'a6 for an6 person emplo6e' b6 another shall not be more than ei5ht hours 'ail6. Ehen the =orA is not continuous the time 'urin5 =hich the laborer is not =orAin5 an' can lea*e his =orAin5 place an' can rest completel6 shall not be counte'.

SEC. /. $his Act shall appl6 to all persons emplo6e' in an6 in'ustr6 or occupation =hether public or pri*ate =ith the e9ception of farm laborers laborers =ho prefer to be pai' on piece =orA basis 'omestic ser*ants an' persons in the personal ser*ice of another an' members of the famil6 of the emplo6er =orAin5 for him.

SEC. D. EorA ma6 be performe' be6on' ei5ht hours a 'a6 in case of actual or impen'in5 emer5encies cause' b6 serious acci'ents fire floo' t6phoon earth>uaAes epi'emic or other 'isaster or calamit6 in or'er to pre*ent loss of life an' propert6 or imminent 'an5er to public safet6G or in case of ur5ent =orA to be performe' on the machines e>uipment or installations in or'er to a*oi' a serious loss =hich the emplo6er =oul' other=ise suffer or some other Bust cause of a similar natureG but in all cases the laborers an' the emplo6ees shall be entitle' to recei*e compensation for the o*ertime =orA performe' at the same rate as their re5ular =a5es or salar6 plus at least t=ent6)fi*e per centum a''itional.

In case of national emer5enc6 the Go*ernment is empo=ere' to establish rules an' re5ulations for the operation of the plants an' factories an' to 'etermine the =a5es to be pai' the laborers.

SEC. .. No person firm or corporation business establishment or place or center of =orA shall compel an emplo6ee or laborer to =orA 'urin5 Sun'a6s an' le5al holi'a6s unless he is pai' an a''itional sum of at least t=ent6)fi*e per centum of his re5ular remuneration1 Pro*i'e' ho=e*er $hat this prohibition shall not appl6 to public utilities performin5 some public ser*ice such as suppl6in5 5as electricit6 po=er =ater or pro*i'in5 means of transportation or communication.

&n'er section . as a public utilit6 the 'efen'ant coul' ha*e his chauffeurs =orA on Sun'a6s an' le5al holi'a6s =ithout pa6in5 them an a''itional sum of at least /C per cent of their re5ular remuneration1 but that =ith reference onl6 to =orA performe' on Sun'a6s an' holi'a6s. If the =orA 'one on such 'a6s e9cee's 0 hours a 'a6 then the Ei5ht)2our "abor "a= =oul' operate pro*i'e' of course that plaintiffs came un'er section / of the sai' la=. So that the >uestion to be 'eci'e' here is =hether or not plaintiffs are entitle' to e9tra compensation for =orA performe' in e9cess of 0 hours a 'a6 Sun'a6s an' holi'a6s inclu'e'.

It =ill be notice' that the last part of section D of Common=ealth Act ... pro*i'es for e9tra compensation for o*er)time =orA Oat the same rate as their re5ular =a5es or salar6 plus at least t=ent6)fi*e per centum a''itionalNO an' that section / of the same act e9clu'es application thereof laborers =ho preferre' to be on piece =orA basis. $his connotes that a laborer or emplo6ee =ith no fi9e' salar6 =a5es or remuneration but recei*in5 as compensation from his emplo6er uncertain an' *ariable amount 'epen'in5 upon the =orA 'one or the result of sai' =orA ;piece =orA< irrespecti*e of the amount of time emplo6e' is not co*ere' b6 the Ei5ht)2our "abor "a= an' is not entitle' to e9tra compensation shoul' he =orA in e9cess of 0 hours a 'a6. An' this seems to be the con'ition of emplo6ment of the plaintiffs. A 'ri*er in the ta9i business of the 'efen'ant liAe the plaintiffs in one 'a6 coul' operate his ta9i cab ei5ht hours or less than ei5ht hours or in e9cess of 0 hours or e*en /. hours on Satur'a6s Sun'a6s an' holi'a6s =ith no limit or restriction other than his 'esire inclination an' state of health an' ph6sical en'urance. 2e coul' 'ri*e continuousl6 or intermittentl6 s6stematicall6 or haphaHar'l6 fast or slo= etc. 'epen'in5 upon his e9clusi*e =ish or inclination. One 'a6 =hen he feels stron5 acti*e an' enthusiastic he =orAs lon5 continuousl6 =ith 'ili5ence an' in'ustr6 an' maAes consi'erable 5ross returns an' recei*es as much as his /8 per cent commission. Another 'a6 =hen he feels 'espon'ent run 'o=n =eaA or laH6 an' =ants to rest bet=een trips an' =orAs for less number of hours his 5ross returns are less an' so is his commission. In other =or's his compensation for the 'a6 'epen's upon the result of his =orA =hich in turn 'epen's on the amount of in'ustr6 intelli5ence an' e9perience applie' to it rather than the perio' of time emplo6e'. In short he has no fi9e' salar6 or =a5es. In this =e a5ree =ith the learne' trial court presi'e' b6 !u'5e Ielicisimo Ocampo =hich maAes the follo=in5 fin'in5s an' obser*ations of this point.

. . . As alrea'6 state' their earnin5s =ere in the form of commission base' on the 5ross receipts of the 'a6. $heir participation in most cases 'epen'e' upon their o=n in'ustr6. So much so that the more hours the6 sta6e' on the roa' the 5reater the 5ross returns an' the hi5her their commissions. $he6 ha*e no fi9e' hours of labor. $he6 can retire at pleasure the6 not bein5 pai' a fi9e' salar6 on the hourl6 'ail6 =eeAl6 or monthl6 basis.

It results that the =orAin5 hours of the plaintiffs as ta9i 'ri*ers =ere entirel6 characteriHe' b6 its irre5ularit6 as 'istin5uishe' from the specific re5ular remuneration pre'icate' on specific an' re5ular hours of =orA of factories an' commercial emplo6ees.

In the case of the plaintiffs it is the result of their labor not the labor itself =hich 'etermines their commissions. $he6 =orAe' un'er no compulsion of turnin5 a fi9e' income for each 5i*en 'a6. . . ..

In an opinion 'ate' !une + +-D- ;Opinion No. ++C< mo'ifie' b6 Opinion No. // series +-.8 'ate' !une ++ +-.8 the Secretar6 of !ustice hel' that chauffeurs of the Manila (ello= $a9icab Co. =ho Oobser*e' in a loose =a6 certain =orAin5 hours 'ail6 O an' Othe time the6 report for =orA as =ell as the time the6 lea*e =orA =as left to their 'iscretion. O recei*in5 no fi9e' salar6 but onl6 /8 per cent of their 5ross earnin5s ma6 be consi'ere' as piece =orAers an' therefore not co*ere' b6 the pro*isions of the Ei5ht)2our "abor "a=.

$he Ea5e A'ministration Ser*ice of the Department of "abor in its Interpretati*e 3ulletin No. / 'ate' Ma6 /0 +-CD un'er OO*ertime Compensation O in section D thereof entitle' Co*era5e sa6s1

$he pro*isions of this bulletin on o*ertime compensation shall appl6 to all persons emplo6e' in an6 in'ustr6 or occupation =hether public or pri*ate =ith the e9ception of farm laborers non) a5ricultural laborers or emplo6ees =ho are pai' on piece =orA contract paAiao tasA or commission basis 'omestic ser*ants an' persons in the personal ser*ice of another an' members of the famil6 of the emplo6er =orAin5 for him.

Irom all this to us it is clear that the claim of the plaintiffs)appellants for o*ertime compensation un'er the Ei5ht)2our "abor "a= has no *ali' support.

As to the month pa6 ;mesa'a< un'er article D8/ of the Co'e of Commerce article //,8 of the ne= Ci*il Co'e ;Republic Act D07< appears to ha*e repeale' sai' Article D8/ =hen it repeale' the pro*isions of the Co'e of Commerce 5o*ernin5 A5enc6. $his repeal tooA place on Au5ust D8 +-C8 =hen the ne= Ci*il Co'e =ent into effect that is one 6ear after its publication in the Official GaHette. $he alle5e' termination of ser*ices of the plaintiffs b6 the 'efen'ant tooA place accor'in5 to the complaint on September . +-C8 that is to sa6 after the repeal of Article D8/ =hich the6 in*oAe. Moreo*er sai' Article D8/ of the Co'e of Commerce assumin5 that it =ere still in force speaAs of Osalar6 correspon'in5 to sai' month.O commonl6 Ano=n as Omesa'a.O If the plaintiffs herein ha' no fi9e' salar6 either b6 the 'a6 =eeA or month then computation of the monthNs salar6 pa6able =oul' be impossible. Article D8/ refers to emplo6ees recei*in5 a fi9e' salar6. Dr. Arturo M. $olentino in his booA entitle' OCommentaries an' !urispru'ence on the Commercial "a=s of the Philippines O Vol. + .th e'ition p. +78 sa6s that article D8/ is not applicable to emplo6ees =ithout fi9e' salar6. Ee >uote J

Emplo6ees not entitle' to in'emnit6. J $his article refers onl6 to those =ho are en5a5e' un'er salar6 basis an' not to those =ho onl6 recei*e compensation e>ui*alent to =hate*er ser*ice

the6 ma6 ren'er. ;+ Mala5arri5a D+. citin5 'ecision of Ar5entina Court of Appeals on Commercial Matters.<

In *ie= of the fore5oin5 the or'er appeale' from is hereb6 affirme' =ith costs a5ainst appellants.

Pablo 3en5Hon Pa'illa Re6es !u5o 3autista An5elo "abra'or Concepcion an' DioAno !!. concur. Paras C.!. concurs in the result.

$he "a=phil ProBect ) Arellano "a= Ioun'ation

la=phil

$o'a6 is Iri'a6 !ul6 87 /8+/

Republic of the Philippines S&PREME CO&R$ Manila

$2IRD DIVISION

G.R. No. +0,7-0

Au5ust - /8+8

RODO"IO !. SERRANO Petitioner *s. SEVERINO SAN$OS $RANSI$ an'Kor SEVERINO SAN$OS Respon'ents.

DECISION

CARPIO MORA"ES !.1

Petitioner Ro'olfo !. Serrano =as hire' on September /0 +--/ as bus con'uctor b6 respon'ent Se*erino Santos $ransit a bus compan6 o=ne' an' operate' b6 its co)respon'ent Se*erino Santos.

After +. 6ears of ser*ice or on !ul6 +. /887 petitioner applie' for optional retirement from the compan6 =hose representati*e a'*ise' him that he must first si5n the alrea'6 prepare' %uitclaim before his retirement pa6 coul' be release'. As petitionerFs re>uest to first 5o o*er the computation of his retirement pa6 =as 'enie' he si5ne' the %uitclaim on =hich he =rote O&.P.O ;un'er protest< after his si5nature in'icatin5 his protest to the amount of P,C /,,..C =hich he recei*e' compute' b6 the compan6 at +C 'a6s per 6ear of ser*ice.

Petitioner soon after file' a complaint+ before the "abor Arbiter alle5in5 that the compan6 erre' in its computation since un'er Republic Act No. ,7.+ other=ise Ano=n as the Retirement Pa6 "a= his retirement pa6 shoul' ha*e been compute' at //.C 'a6s per 6ear of ser*ice to inclu'e the cash e>ui*alent of the C)'a6 ser*ice incenti*e lea*e ;SI"< an' +K+/ of the +Dth month pa6 =hich the compan6 'i' not.

$he compan6 maintaine' ho=e*er that the %uitclaim si5ne' b6 petitioner barre' his claim an' in an6 e*ent its computation =as correct since petitioner =as not entitle' to the C)'a6 SI" an' pro)rate' +Dth month pa6 for as a bus con'uctor he =as pai' on commission basis. Respon'ents notin5 that the retirement 'ifferential pa6 amounte' to onl6 P+ .D+.+C e9plaine' that in the computation of petitionerFs retirement pa6 fi*e months =ere ina'*ertentl6 not inclu'e' because some in'e9 car's containin5 his recor's ha' been lost.

36 Decision/ of Iebruar6 +C /88, "abor Arbiter Cresencio Ramos !r. rule' in fa*or of petitioner a=ar'in5 him P++7 +DC..C as retirement pa6 'ifferential an' +8P of the total monetar6 a=ar' as attorne6Fs fees. In arri*in5 at such computation the "abor Arbiter ratiocinate'1

In the same "abor A'*isor6 on Retirement Pa6 "a= it =as liAe=ise 'ecisi*el6 ma'e clear that Othe la= e9pan'e' the concept of Oone)half month salar6O from the usual one)month salar6 'i*i'e' b6 t=oO to =it1

3. COMP&$A$ION OI RE$IREMEN$ PA(

A co*ere' emplo6ee =ho retires pursuant to RA ,7.+ shall be entitle' to retirement pa6 e>ui*alent to at least one)half ;+K+/< month salar6 for e*er6 6ear of ser*ice a fraction of at least si9 ;7< months bein5 consi'ere' as one =hole 6ear.

$he la= is e9plicit that Oone)half month salar6 shall mean fifteen ;+C< 'a6s plus one)t=elfth ;+K+/< of the +Dth month pa6 an' the cash e>ui*alent of not more than fi*e ;C< 'a6s ser*ice incenti*e lea*esO unless the parties pro*i'e for broa'er inclusions. E*i'entl6 the la= e9pan'e' the concept of Oone)half month salar6O from the usual one)month salar6 'i*i'e' b6 t=o.

$he retirement pa6 is e>ual to half)monthFs pa6 per 6ear of ser*ice. 3ut Ohalf)monthFs pa6O is Oe9pan'e'O because it means not Bust the salar6 for +C 'a6s but also one)t=elfth of the +Dth) month pa6 an' the cash *alue of fi*e)'a6 ser*ice incenti*e lea*e. $2IS IS $2E MINIM&M. $he retirement pa6 pacAa5e can be impro*e' upon b6 *oluntar6 compan6 polic6 or particular a5reement =ith the emplo6ee or throu5h a collecti*e bar5ainin5 a5reement.O ;$he "abor Co'e =ith Comments an' Cases C.A. AHcunea Vol. II pa5e ,7C Iifth E'ition /88.<.

$hus ha*in5 establishe' that //.C 'a6s pa6 per 6ear of ser*ice is the correct formula in arri*in5 at the complete retirement pa6 of complainant an' inasmuch as complainantFs 'ail6 earnin5 is base' on commission earne' in a 'a6 =hich *aries each 'a6 the ne9t critical issue that nee's 'iscernment is the 'etermination of =hat is a fair an' rational amount of 'ail6 earnin5 of complainant to be use' in the computation of his retirement pa6.

Ehile complainant en'ea*ore' to substantiate his claim that he earne' a*era5e 'ail6 commission of P,88.88 ho=e*er the 'ocuments he presente' are not complete simpl6 representati*e copies therefore unreliable. On the other haN' =hile respon'ents >uestion complainantFs use of P,88.88 ;'ail6 income< as basis in 'eterminin5 the latterFs correct retirement pa6 ho=e*er it 'oes not help their 'efense that the6 'i' not present a sin5le Con'uctorFs $rip Report to contra'ict the claim of complainant. Instea' respon'ents a''uce' a han'=ritten summar6 of complainantFs monthl6 income from +--D until !une /887. It must be note' also that complainant 'i' not contest the amounts state' on the summar6 of his monthl6 income as reporte' b6 respon'ents. Gi*en the abo*e consi'erations an' most importantl6 that complainant 'i' not 'ispute the fi5ures state' in that 'ocument =e fin' it lo5ical Bust an' e>uitable for both parties to rel6 on the summar6 of monthl6 income pro*i'e' b6 respon'ent thus =e a''e' complainantFs monthl6 income from !une /88C until !une /887 or the last t=el*e months an' =e arri*e' at P+0- C-+.D8< an' =e 'i*i'e' it b6 t=el*e ;+/< to arri*e at complainantFs a*era5e monthl6 earnin5 of P+C ,--./0. $hereafter the a*era5e monthl6 of P+C ,--./0 is 'i*i'e' b6 t=ent6)si9 ;/7< 'a6s the factor commonl6 use' in 'eterminin5 the re5ular =orAin5 'a6s in a month to arri*e at his a*era5e 'ail6 income of P78,.77. Iinall6 P78,.77 ;a*era5e 'ail6 income< 9 //.C 'a6s Q P+D 7,/.DC 9 +. ;len5th of ser*ice< Q P+-+ .+/.-8 ;COMP"E$E RE$IREMEN$ PA(<. 2o=e*er inasmuch as complainant alrea'6 recei*e' P,C /,,..C the retirement 'ifferential pa6 'ue him is P++7 +DC..C ;P+-+ .+/.-8 R P,C /,,..C<. ;un'erscorin5 partl6 in the ori5inal an' partl6 supplie'<

$he National "abor Relations Commission ;N"RC< to =hich respon'ents appeale' re*erse' the "abor ArbiterFs rulin5 an' 'ismisse' petitionerFs complaint b6 DecisionD 'ate' April /D /880. It ho=e*er or'ere' respon'ents to pa6 retirement 'ifferential in the amount of P/ D7C.DC.

Citin5 R S E $ransport Inc. *. "ata5 . the N"RC hel' that since petitioner =as pai' on purel6 commission basis he =as e9clu'e' from the co*era5e of the la=s on +Dth month pa6 an' SI" pa6 hence the +K+/ of the +Dth month pa6 an' the C)'a6 SI" shoul' not be factore' in the computation of his retirement pa6.

PetitionerFs motion for reconsi'eration ha*in5 been 'enie' b6 ResolutionC of !une /, /880 he appeale' to the Court of Appeals.

36 the assaile' Decision7 of Iebruar6 ++ /88- the appellate court affirme' the N"RCFs rulin5 it merel6 hol'in5 that it =as base' on substantial e*i'ence hence shoul' be respecte'.

PetitionerFs motion for reconsi'eration =as 'enie' hence the present petition for re*ie= on certiorari.

$he petition is meritorious.

Republic Act No. ,7.+ =hich =as enacte' on December - +--/ amen'e' Article /0, of the "abor Co'e b6 pro*i'in5 for retirement pa6 to >ualifie' pri*ate sector emplo6ees in the absence of an6 retirement plan in the establishment. $he pertinent pro*ision of sai' la= rea's1

Section +. Article /0, of Presi'ential Decree No. ../ as amen'e' other=ise Ano=n as the "abor Co'e of the Philippines is hereb6 amen'e' to rea' as follo=s1

9999

In the absence of a retirement plan or a5reement pro*i'in5 for retirement benefits of emplo6ees in the establishment an emplo6ee upon reachin5 the a5e of si9t6 ;78< 6ears or more but not be6on' si9t6)fi*e ;7C< 6ears =hich is hereb6 'eclare' the compulsor6 retirement a5e =ho has ser*e' at least fi*e ;C< 6ears in the sai' establishment ma6 retire an' shall be entitle' to retirement pa6 e>ui*alent to at least one)half ;+K/< month salar6 for e*er6 6ear of ser*ice a fraction of at least si9 ;7< months bein5 consi'ere' as one =hole 6ear.

&nless the parties pro*i'e for broa'er inclusions the term one)half ;+K/< month salar6 shall mean fifteen ;+C< 'a6s plus one)t=elfth ;+K+/< of the +Dth month pa6 an' the cash e>ui*alent of not more than fi*e ;C< 'a6s of ser*ice incenti*e lea*es.

Retail ser*ice an' a5ricultural establishments or operations emplo6in5 not more than ;+8< emplo6ees or =orAers are e9empte' from the co*era5e of this pro*ision.

9 9 9 9 ;emphasis an' un'erscorin5 supplie'<

Iurther the Implementin5 Rules of sai' la= pro*i'e1

R&"E II Retirement 3enefits

SEC$ION +.

General Statement on Co*era5e. J $his Rule shall appl6 to all emplo6ees in the pri*ate sector re5ar'less of their position 'esi5nation or status an' irrespecti*e of the metho' b6 =hich their =a5es are pai' e9cept to those specificall6 e9empte' un'er Section / hereof. As use' herein the term OActO shall refer to Republic Act No. ,7.+ =hich tooA effect on !anuar6 , +--D.

SEC$ION /

E9emptions. J $his Rule shall not appl6 to the follo=in5 emplo6ees1

/.+ Emplo6ees of the National Go*ernment an' its political sub'i*isions inclu'in5 Go*ernment) o=ne' an'Kor controlle' corporations if the6 are co*ere' b6 the Ci*il Ser*ice "a= an' its re5ulations.

/./ Domestic helpers an' persons in the personal ser*ice of another.

/.D Emplo6ees of retail ser*ice an' a5ricultural establishment or operations re5ularl6 emplo6in5 not more than ten ;+8< emplo6ees. As use' in this sub)sectionG

9999

SEC$ION C Retirement 3enefits.

C.+ In the absence of an applicable a5reement or retirement plan an emplo6ee =ho retires pursuant to the Act shall be entitle' to retirement pa6 e>ui*alent to at least one)half ;T< month salar6 for e*er6 6ear of ser*ice a fraction of at least si9 ;7< months bein5 consi'ere' as one =hole 6ear.

C./ Components of One)half ;T< Month Salar6. J Ior the purpose of 'eterminin5 the minimum retirement pa6 'ue an emplo6ee un'er this Rule the term Oone)half month salar6O shall inclu'e all of the follo=in51

;a< Iifteen ;+C< 'a6s salar6 of the emplo6ee base' on his latest salar6 rate. As use' herein the term Osalar6O inclu'es all remunerations pai' b6 an emplo6er to his emplo6ees for ser*ices ren'ere' 'urin5 normal =orAin5 'a6s an' hours =hether such pa6ments are fi9e' or ascertaine' on a time tasA piece of commission basis or other metho' of calculatin5 the same an' inclu'es the fair an' reasonable *alue as 'etermine' b6 the Secretar6 of "abor an' Emplo6ment of foo' lo'5in5 or other facilities customaril6 furnishe' b6 the emplo6er to his emplo6ees. $he term 'oes not inclu'e cost of li*in5 allo=ances profit)sharin5 pa6ments an' other monetar6 benefits =hich are not consi'ere' as part of or inte5rate' into the re5ular salar6 of the emplo6ees.

;b< $he cash e>ui*alent of not more than fi*e ;C< 'a6s of ser*ice incenti*e lea*eG

;c< One)t=elfth of the +Dth month pa6 'ue the emplo6ee.

;'< All other benefits that the emplo6er an' emplo6ee ma6 a5ree upon that shoul' be inclu'e' in the computation of the emplo6eeFs retirement pa6.

9 9 9 9 ;emphasis supplie'<

A'mitte'l6 petitioner =orAe' for +. 6ears for the bus compan6 =hich 'i' not a'opt an6 retirement scheme. E*en if petitioner as bus con'uctor =as pai' on commission basis then he falls =ithin the co*era5e of R.A. ,7.+ an' its implementin5 rules. As thus correctl6 rule' b6 the "abor Arbiter petitionerFs retirement pa6 shoul' inclu'e the cash e>ui*alent of the C)'a6 SI" an' +K+/ of the +Dth month pa6.

$he affirmance b6 the appellate court of the reliance b6 the N"RC on R S E $ransport Inc. is erroneous. In sai' case the Court hel' that a ta9i 'ri*er pai' accor'in5 to the Oboun'ar6 s6stemO is not entitle' to the +Dth month an' the SI" pa6 hence his retirement pa6 shoul' be compute' on the sole basis of his salar6.

Ior purposes ho=e*er of appl6in5 the la= on SI" as =ell as on retirement the Court notes that there is a 'ifference bet=een 'ri*ers pai' un'er the Oboun'ar6 s6stemO an' con'uctors =ho are pai' on commission basis.

In practice ta9i 'ri*ers 'o not recei*e fi9e' =a5es. $he6 retain onl6 those sums in e9cess of the Oboun'ar6O or fee the6 pa6 to the o=ners or operators of the *ehicles., Con'uctors on the other han' are pai' a certain percenta5e of the busF earnin5s for the 'a6.

It bears emphasis that un'er P.D. 0C+ or the SI" "a= the e9clusion from its co*era5e of =orAers =ho are pai' on a purel6 commission basis is onl6 =ith respect to fiel' personnel. $he more recent case of Auto 3us $ransport S6stems Inc. *. 3autista0 clarifies that an emplo6ee =ho is pai' on purel6 commission basis is entitle' to SI"1

A careful perusal of sai' pro*isions of la= =ill result in the conclusion that the 5rant of ser*ice incenti*e lea*e has been 'elimite' b6 the Implementin5 Rules an' Re5ulations of the "abor Co'e to appl6 onl6 to those emplo6ees not e9plicitl6 e9clu'e' b6 Section + of Rule V. Accor'in5 to the Implementin5 Rules Ser*ice Incenti*e "ea*e shall not appl6 to emplo6ees classifie' as Ofiel' personnel.O $he phrase Oother emplo6ees =hose performance is unsuper*ise' b6 the emplo6erO must not be un'erstoo' as a separate classification of emplo6ees to =hich ser*ice incenti*e lea*e shall not be 5rante'. Rather it ser*es as an amplification of the interpretation of the 'efinition of fiel' personnel un'er the "abor Co'e as those O=hose actual hours of =orA in the fiel' cannot be 'etermine' =ith reasonable certaint6.O

$he same is true =ith respect to the phrase Othose =ho are en5a5e' on tasA or contract basis purel6 commission basis.O Sai' phrase shoul' be relate' =ith Ofiel' personnel O appl6in5 the rule on eBus'em 5eneris that 5eneral an' unlimite' terms are restraine' an' limite' b6 the particular terms that the6 follo=. 2ence emplo6ees en5a5e' on tasA or contract basis or pai' on purel6 commission basis are not automaticall6 e9empte' from the 5rant of ser*ice incenti*e lea*e unless the6 fall un'er the classification of fiel' personnel.

9999

Accor'in5 to Article 0/ of the "abor Co'e Ofiel' personnelO shall refer to non)a5ricultural emplo6ees =ho re5ularl6 perform their 'uties a=a6 from the principal place of business or branch office of the emplo6er an' =hose actual hours of =orA in the fiel' cannot be 'etermine' =ith reasonable certaint6. $his 'efinition is further elaborate' in the 3ureau of EorAin5 Con'itions ;3EC< A'*isor6 Opinion to Philippine $echnical)Clerical Commercial Emplo6ees Association =hich states that1

As a 5eneral rule ?fiel' personnel@ are those =hose performance of their BobKser*ice is not super*ise' b6 the emplo6er or his representati*e the =orAplace bein5 a=a6 from the principal office an' =hose hours an' 'a6s of =orA cannot be 'etermine' =ith reasonable certaint6G hence the6 are pai' specific amount for ren'erin5 specific ser*ice or performin5 specific =orA. If re>uire' to be at specific places at specific times emplo6ees inclu'in5 'ri*ers cannot be sai' to be fiel' personnel 'espite the fact that the6 are performin5 =orA a=a6 from the principal office of the emplo6ee.

9 9 9 9 ;emphasis italics an' un'erscorin5 supplie'<

E2EREIORE the petition is GRAN$ED. $he Court of Appeals Decision of Iebruar6 ++ /88an' Resolution of April /0 /88- are REVERSED an' SE$ ASIDE an' the "abor ArbiterFs Decision 'ate' Iebruar6 +C /88, is REINS$A$ED.

SO ORDERED.

CONC2I$A CARPIO MORA"ES Associate !ustice

EE CONC&R1

AR$&RO D. 3RION Associate !ustice

"&CAS P. 3ERSAMIN Associate !ustice Associate !ustice MAR$IN S. VI""ARAMA !R. Associate !ustice RO3ER$O A. A3ADU

A$$ES$A$ION

I attest that the conclusions in the abo*e Decision ha' been reache' in consultation before the case =as assi5ne' to the =riter of the opinion of the CourtFs Di*ision.

CONC2I$A CARPIO MORA"ES Associate !ustice Chairperson

CER$IIICA$ION

Pursuant to Section +D Article VIII of the Constitution an' the Di*ision ChairpersonFs Attestation I certif6 that the conclusions in the abo*e 'ecision ha' been reache' in consultation before the case =as assi5ne' to the =riter of the opinion of the CourtFs Di*ision.

RENA$O C. CORONA Chief !ustice

Iootnotes

U Desi5nate' as A''itional Member per Special Or'er No. 0.D ;Ma6 +, /8+8< in *ie= of the *acanc6 occasione' b6 the retirement of Chief !ustice Re6nato S. Puno.

+ CA rollo p. D0.

/ I'. at -7)+8C. Penne' b6 "abor Arbiter Cresencio Ramos !r.

D I'. at /7)D.. Penne' b6 Presi'in5 Commissioner Raul $. A>uino an' concurre' in b6 Commissioners Victoriano R. Cala6ca6 an' An5elita A. Gacutan ;no= Associate !ustice of the Court of Appeals<

. G.R. No. +CC/+. Iebruar6 +D /88. 7-0 SCRA .//.

C CA rollo pp. DC)D,. Penne' b6 Presi'in5 Commissioner Raul $. A>uino an' concurre' in b6 Commissioners Victoriano R. Cala6ca6 an' An5elita A. Gacutan ;no= Associate !ustice of the Court of Appeals<

7 I'. at +-C)/8/. Penne' b6 Associate !ustice !ose C. Re6es !r. an' concurre' in b6 Associate !ustices An'res 3. Re6es !r. ;no= Presi'in5 !ustice< an' Norman'ie 3. PiHarro.

, !ar'in *. N"RC G.R. No. ++-/70 Iebruar6 /D /888 D/7 SCRA /-- D80.

0 G.R. No. +C7D7, Ma6 +7 /88C .C0 SCRA C,0 C0,)C00.

$he "a=phil ProBect ) Arellano "a= Ioun'ation

COMMONWEALTH ACT NO. 444

COMMONWEALTH ACT NO. 444 - EIGHT HOUR LABOR LAW

Section 1. The legal o!"ing #a$ %o! an$ &e!'on e(&lo$e# )$ anothe! 'hall )e o% not (o!e than eight ho*!' #ail$. When the o!" i' not contin*o*'+ the ti(e #*!ing hich the la)o!e! i' not o!"ing an# can lea,e hi' o!"ing &lace an# can !e't co(&letel$ 'hall not )e co*nte#. Section-. Thi' Act 'hall a&&l$ to all &e!'on' e(&lo$e# in an$ in#*'t!$ o! occ*&ation+ hethe! &*)lic o! &!i,ate+ ith the e.ce&tion o% %a!( la)o!e!'+ la)o!e!' ho &!e%e! to )e &ai# on &iece o!" )a'i'+ #o(e'tic 'e!,ant' an# &e!'on' in the &e!'onal 'e!,ice o% anothe! an# (e()e!' o% the %a(il$ o% the e(&lo$e! o!"ing %o! hi(. Section/. Wo!" (a$ )e &e!%o!(e# )e$on# eight ho*!' a #a$ in ca'e o% act*al o! i(&en#ing e(e!gencie' ca*'e# )$ 'e!io*' acci#ent'+ %i!e+ %loo#+ t$&hoon+ ea!th0*a"e+ e&i#e(ic+ o! othe! #i'a'te! o! cala(it$ in o!#e! to &!e,ent lo'' o% li%e an# &!o&e!t$ o! i((inent #ange! to &*)lic 'a%et$1 o! in ca'e o% *!gent o!" to )e &e!%o!(e# on the (achine+ e0*i&(ent+ o! in'tallation' in o!#e! to a,oi# a 'e!io*' lo'' hich the e(&lo$e! o*l# othe! i'e '*%%e!+ o! 'o(e othe! 2*'t ca*'e o% a 'i(ila! nat*!e1 )*t in all '*ch ca'e' the la)o!e!' an# e(&lo$ee' 'hall )e entitle# to !ecei,e co(&en'ation %o! the o,e!ti(e o!" &e!%o!(e# at the 'a(e !ate a' thei! !eg*la! age' o! 'ala!$+ &l*' at lea't t ent$-%i,e &e! cent*( a##itional. In ca'e o% national e(e!genc$ the Go,e!n(ent i' e(&o e!e# to e'ta)li'h !*le' an# !eg*lation' %o! the o&e!ation o% the &lant' an# %acto!ie' an# to #ete!(ine the age' to )e &ai# the la)o!e!'. Section4. No &e!'on+ %i!(+ o! co!&o!ation+ )*'ine'' e'ta)li'h(ent o! &lace o! cente! o% la)o! 'hall co(&el an e(&lo$ee o! la)o!e! to o!" #*!ing S*n#a$' an# legal holi#a$'+ *nle'' he i' &ai# an a##itional '*( o% at lea't t ent$-%i,e &e! cent*( o% hi' !eg*la! !e(*ne!ation3 4!o,i#e# ho e,e!+ That thi' &!ohi)ition 'hall not a&&l$ to &*)lic *tilitie' &e!%o!(ing 'o(e &*)lic 'e!,ice '*ch a' '*&&l$ing ga'+ elect!icit$+ &o e!+ ate!+ o! &!o,i#ing (ean' o% t!an'&o!tation o! co((*nication. Section5. E.e(&tion %!o( the &!o,i'ion' o% 'ection' t o+ an# th!ee he!eo% (a$ )e g!ante# )$ the Sec!eta!$ o% la)o! in the inte!e't o% the &*)lic+ o! i%+ in hi' o&inion+ '*ch e.e(&tion i' 2*'ti%ia)le eithe! )eca*'e the o!gani6ation o! nat*!e o% the o!" !e0*i!e' it+ o! )eca*'e o% lac" o! in'*%%icienc$ o% co(&etent la)o!e!' in a localit$ o! )eca*'e the !elie,ing o% la)o!e!' (*'t )e #one *n#e! ce!tain con#ition'+ o! )$ !ea'on o% an$ othe! e.ce&tional ci!c*('tance' o! con#ition' o% the o!" o! in#*'t!$ conce!ne#1 )*t hen '*ch e.e(&tion i' g!ante# e(&lo$ee' an# la)o!e!' ill )e &ai# at lea't t ent$-%i,e &e! cent*( in a##ition to thei! !eg*la! 'ala!ie' o! age' %o! the ti(e in e.ce'' o% eight ho*!'. Section7. An$ ag!ee(ent o! cont!act )et een the e(&lo$e! an# the la)o!e! o! e(&lo$ee cont!a!$ to the &!o,i'ion' o% thi' Act 'hall )e n*ll an# ,oi# a) initio.

Section8. An$ ,iolation o% thi' Act )$ the e(&lo$e! o! &e!'on ha,ing #i!ect cont!ol an# '*&e!,i'ion o,e! the o!" 'hall )e &*ni'he# )$ a %ine o% not (o!e than one tho*'an# &e'o'+ o! )$ i(&!i'on(ent %o! not (o!e than one $ea!+ o! )oth. Section9. Act' N*()e!e# :o!t$-one h*n#!e# an# t ent$-th!ee an# :o!t$-t o h*n#!e# an# %o!t$-t o o% the %o!(e! 4hili&&ine Legi'lat*!e a!e !e&eale#. Section;. Thi' Act 'hall ta"e e%%ect *&on it' a&&!o,al. APPROVED: June 3, 1939.

4RESI<ENTIAL <ECREE NO. 951

RULES AN< REGULATIONS IM4LEMENTING 4RESI<ENTIAL <ECREE NO. 951 B$ ,i!t*e o% the &o e!' ,e'te# in (e )$ la + the %ollo ing !*le' an# !eg*lation' i(&le(enting 4!e'i#ential <ec!ee No. 951 a!e he!e)$ i''*e# %o! the g*i#ance o% all conce!ne#. Section 1. Payment of 13th-month Pay. - All e(&lo$e!' co,e!e# )$4!e'i#ential <ec!ee No. 951+ he!eina%te! !e%e!!e# to a' the "Decree" + 'hall &a$ to all thei! e(&lo$ee' !ecei,ing a )a'ic 'ala!$ o% not (o!e than 41+=== a (onth a thi!teenth-(onth &a$ not late! than <ece()e! -4 o% e,e!$ $ea!. Sec. -. Definition of certain terms. - A' *'e# in thi' i''*ance3chan!o)le',i!t*alla li)!a!$ >a? " hirteenth-month !ay" 'hall (ean one t el%th >1@1-? o% the )a'ic 'ala!$ o% an e(&lo$ee ithin a calen#a! $ea!1

>)? ""asic sa#ary" 'hall incl*#e all !e(*ne!ation' o! ea!ning' &ai# )$ an e(&lo$e! to an e(&lo$ee %o! 'e!,ice' !en#e!e# )*t (a$ not incl*#e co't-o%-li,ing allo ance' g!ante# &*!'*ant to 4!e'i#ential <ec!ee No. 5-5 o! Lette! o% In't!*ction' No. 184+ &!o%it-'ha!ing &a$(ent'+ an# all allo ance' an# (oneta!$ )ene%it' hich a!e not con'i#e!e# o! integ!ate# a' &a!t o% the !eg*la! o! )a'ic 'ala!$ o% the e(&lo$ee at the ti(e o% the &!o(*lgation o% the <ec!ee on <ece()e! 17+ 1;85. Sec. /. Em!#oyers co$ere%. - The <ec!ee 'hall a&&l$ to all e(&lo$e!' e.ce&t to3chan!o)le',i!t*alla li)!a!$ >a? <i't!e''e# e(&lo$e!'+ '*ch a' >1? tho'e hich a!e c*!!entl$ inc*!!ing '*)'tantial lo''e' o! >-? in the ca'e o% non-&!o%it in'tit*tion' an# o!gani6ation'+ he!e thei! inco(e+ hethe! %!o( #onation'+ cont!i)*tion'+ g!ant' an# othe! ea!ning' %!o( an$ 'o*!ce+ ha' con'i'tentl$ #ecline# )$ (o!e than %o!t$ >4=A? &e!cent o% thei! no!(al inco(e %o! the la't t o >-? $ea!'+ '*)2ect to the &!o,i'ion o% Section 8 o% thi' i''*ance1 >)? The Go,e!n(ent an# an$ o% it' &olitical '*)#i,i'ion'+ incl*#ing go,e!n(ent-o ne# an# cont!olle# co!&o!ation'+ e.ce&t tho'e co!&o!ation' o&e!ating e''entiall$ a' &!i,ate '*)'i#ia!ie' o% the Go,e!n(ent1 >c? E(&lo$e!' al!ea#$ &a$ing thei! e(&lo$ee' 1/-(onth &a$ o! (o!e in a calen#a! $ea! o! it' e0*i,alent at the ti(e o% thi' i''*ance1 >#? E(&lo$e!' o% ho*'ehol# hel&e!' an# &e!'on' in the &e!'onal 'e!,ice o% anothe! in !elation to '*ch o!"e!'1 an# >e? E(&lo$e!' o% tho'e ho a!e &ai# on &*!el$ co((i''ion+ )o*n#a!$+ o! ta'" )a'i'+ an# tho'e ho a!e &ai# a %i.e# a(o*nt %o! &e!%o!(ing a '&eci%ic o!"+ i!!e'&ecti,e o% the ti(e con'*(e# in the &e!%o!(ance the!eo%+ e.ce&t he!e the o!"e!' a!e &ai# on &iece-!ate )a'i' in hich ca'e the e(&lo$e! 'hall )e co,e!e# )$ thi' i''*ance in'o%a! a' '*ch o!"e!' a!e conce!ne#. A' *'e# he!ein+ o!"e!' &ai# on &iece-!ate )a'i' 'hall !e%e! to tho'e ho a!e &ai# a 'tan#a!# a(o*nt %o! e,e!$ &iece o! *nit o% o!" &!o#*ce# that i' (o!e o! le'' !eg*la!l$ !e&licate#+ itho*t !ega!# to the ti(e '&ent in &!o#*cing the 'a(e. The te!( "its e&ui$a#ent" a' *'e# in &a!ag!a&h c? he!eo% 'hall incl*#e Ch!i't(a' )on*'+ (i#-$ea! )on*'+ &!o%it-'ha!ing &a$(ent' an# othe! ca'h )on*'e' a(o*nting to not le'' than 1@1-th o% the )a'ic 'ala!$ )*t 'hall not incl*#e ca'h an# 'toc" #i,i#en#'+ co't o% li,ing allo ance' an# all othe! allo ance' !eg*la!l$ en2o$e# )$ the e(&lo$ee+ a' ell a' non-(oneta!$ )ene%it'. Whe!e an e(&lo$e! &a$' le'' than 1@1-th o% the e(&lo$ee' )a'ic 'ala!$+ the e(&lo$e! 'hall &a$ the #i%%e!ence.