LABOR Digests 092415

Makati Haberdashery v. NLRC

Labor Congress v. NLRC
PSTMSDWO v. PNCC Skyway
Sugue v. Triumph

Makati Haberdashery v. NLRC

Nov. 15, 1989; Fernan, C.J.
Prepared by Tobie Reynes
Facts
1.

2.

3.

4.

5.
6.

Private respondents have been working for the

HABERDASHERY as tailors, seamstresses,
sewers, basters, and plantsadoras. Except for
MARIA Angeles and LEONILA Serafina (who are
paid on a monthly basis), the RESPONDENTS
are paid on a piece-rate basis.
a. In addition to their piece-rate, they are
given a daily allowance of PHP3.00
provided they work before 9:30am
every day.
b. Their working hours are from or before
9:30am up to 6:00 or 7:00pm from
Monday to Saturday and, during peak
periods, even on Sundays and holidays.
[CASE #1] The SANDIGAN ng Manggagawang
Pilipino, respondents labor organization, filed a
complaint before the NLRC for underpayment
of basic wage and living allowance and nonpayment of overtime pay, holiday pay, service
incentive pay, 13th month pay, and benefits
under Wage Order Nos. 1 5.
During the pendency of CASE #1, private
respondents DIOSCORO Pelobello left with
SALVADOR Rivera (a salesman of the
HABERDASHERY) an open package discovered
to contain a jusi barong tagalog.
a. When DIOSCORO was confronted about
this, he replied that it was ordered by
CASIMIRO Zapata (also a worker) for
his customer.
b. CASIMIRO allegedly admitted to having
copied
the
design
of
the
HABERDASHERY. However, when again
questioned, DIOSCORO and CASIMIRO
denied ownership of the package and
the barong contained therein.
The HABERDASHERY issued a memo directing
DIOSCORO and CASIMIRO to explain why no
action should be taken against them for
accepting a job order which is prejudicial and in
direct competition with the business of the
company.
a. Neither
of
them
submitted
an
explanation and did not report for work
thereafter.
b. Hence, they were dismissed by the
HABERDASHERY.
[CASE #2] CASIMIRO and DIOSCORO filed a
complaint for illegal dismissal before the NLRC.
The LA ruled in favor of DIOSCORO and
CASIMIRO
in
CASE
#2
and
ordered
reinstatement with full backwages. As for CASE
#1, the claimes for violation of the minimum
wage law was dismissed for lack of merit.

7.

However it was found that the HABERDASHERY

violated the decrees on COLA, Service
Incentive Leave pay, and 13th month pay.
The NLRC affirmed but limited backwages of
DIOSCORO and CASIMIRO to only one year.

Issues/Held/Ratio
W/N there existed an employer-employee
relationship between the HABERDASHERY and
respondent WORKERS YES, there was.
1. The Court used the four-fold test but only
focused on the control test, ruling that the
most important requisite of control is
present.
a. The HABERDASHERY directs the
manner and quality of cutting,
sewing, and ironing.
b. A memorandum issued by the
HABERDASHERY
clearly
demonstrates the presence of
control.
i. The workers were to follow
instruction and orders from
their superiors.
ii. Before
accepting
job
orders, tailers must check
materials, job orders, due
dates, etc.
iii. All job orders must be
finished a day before the
due date.
iv. If there is any problem
regarding their superiors,
the workers were to report
them to the assistant
manager.
2. That they were regular employees is
further proven by the fact that they had to
report to work regularly and were paid an
additional allowance for early reporting.
W/N the WORKERS were entitled to the monetary
awards They are ENTITLED to minimum wage
(but not awarded), cost of living allowance, and
13th month pay, BUT NOT to service incentive
leave pay and holiday pay.
1. Minimum Wage
a. All employees paid by result shall
receive not less than the applicable
minimum wage rates for eight (8)
hours work a day, except where a
payment by result rate has been
established by the Secretary of Labor.1
b. Here, no payment by result rate has
been established.
c. However, the question as to whether
there is in fact an underpayment of
minimum wages has already been
resolved by the LA in the negative. For
failure of the WORKERS to appeal such
ruling, it has already attained finality.
2. Cost of Living Allowance
a. They
may
claim
COLA
as
a
consequence of their status as regular
employees.
1 Letter of Instruction No. 829, 2(g); Rules Implementing Pres. Dec. No. 1614;
Rules Implementing Pres. Dec. No. 1713, 3(f).
LABOR: Digests | 092415 | kb | 1

b.

3.

4.

5.

From the provision defining employees

entitled to COLA, it is said that such
pay is granted to [a]ll workers in the
private sector, regardless of their
position, designation or status, and
irrespective of the method by which
their wages are paid.
13th Month Pay
a. They are entitled to 13th month pay
under Sec. 3 of the Rules Implementing
P.D. No. 851.2
[Not entitled to] Service Incentive Leave
Pay
a. As piece-rate workers being paid a
fixed amount for performing work
irrespective of time consumed in the
performance thereof, they fall under
one of the exceptions stated in the
Omnibus Rules, Bk. III, Rule V, Sec.
1(d).
[Not entitled to] Holiday Pay
a. For the same reason as in #4 above,
the basis being Rule IV, Sec. 1(e).

W/N DIOSCORO and CASIMIRO were illegally

dismissed NO, they were not.
1. DIOSCORO and CASIMIRO have committed a
transgression against the HABERDASHERY (See
Facts.4).
2. When they were required to explain, they not
only failed to do so but also went on absence
without leave.
3. Even assuming that this did not constitute
abandonment, their blatant disregard of
HABERDASHERYs memorandum is clearly an
open defiance to the lawful orders of the latter
a justifiable ground for termination of
employment by the employer under Art. 283(a)
of the Labor Code.
Labor Congress v NLRC
GR No. 123938; May 21 1998; Davide Jr
Digest prepared by Mara Recto
FACTS

The 99 petitioners were rank and file

employees of Empire Food Products. They filed
a complaint for payment of money claims and
for violation of labor standard laws. They also
filed a petition for direct certification of Labor
Congress of the Philippines (LCP) as their
bargaining representative

The Labor Congress President Benigno Navarro

and Gonzalo Kehyeng and Evelyn Kehyeng in
behalf of Empire Food Products Inc. entered
into a Memorandum of Agreement:

Recognizing LCP as the sole and

exclusive
bargaining
agent
and
representative regarding wages, hours

2 The provision reads:Sec. 3. Employers covered. The Decree shall apply to

all employers except to:
e) Employers of those who are paid on purely commission, boundary,
or task basis, and those who are paid a fixed amount for performing a
specific work, irrespective of the time consumed in the performance
thereof, except where the workers are paid on a piece-rate basis in
which case the employer shall be covered by this issuance insofar as
such workers are concerned.

of work, and other terms and

conditions

Parties to the NLRC jointly and mutually

agree that the issues be resolved in the
CBA

Management of Empire Food Products

to adjust the wages within 15 days
from signing of this Agreement and
agree to register all employees with
SSS

Empire Food Products agrees to deduct

thru payroll deduction union dues and
other assessments upon submission by
LCP individual Check-Off Authorization
signed
by
the
union
members
indicating the amount to be deducted.
The amounts shall be remitted to the
LCP Treasurer within 3 or 5 days upon
deduction.

Parties to the NLRC case jointly and

mutually agree that the case be
provisionally withdrawn from the
calendar of the NLRC

Parties jointly and mutually agreed that

upon signing of the agreement, no
harassments, threats, interferences of
their respective rights, no vengeance
or revenge by each partner which
might disrupt operations of the
business

MOA shall govern the parties in the

exercise of their rights

Parties jointly and mutually agreed to

respect and comply with all terms and
conditions
Mediator Arbiter Cortez approved the MOA and
certified LCP as the sole and exclusive
bargaining agent
LCP President Navarro submitted a proposal for
collective bargaining
Petitioners filed a complaint in the NLRC
against Empire Food Products for unfair labor
practice by way of illegal lockout and/or
dismissal; union busting; violation of the MOA;
underpayment of wages and damages
LA absolved Empire Food Products of the
charges. LA directed the reinstatement of the
individual
complaints
ruling
that
the
respondents violated a cardinal rule that a
payroll and other papers evidencing hours of
work, payments, etc. shall always be
maintained and subjected to inspection and
visitation by personnel of the DOLE.

Respondents should not escape liability

for this technicality, hence, proper that
all individual complaints except those
who resigned and executed quitclaims
and releases should be reinstated
admonition to respondents that any
harassment, intimidation, coercion or
any form of threat as a result of this
reinstatement shall be dealt with
accordingly.
NLRC vacated LA decision and remanded the
case for further proceeding ruling that the LA
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overlooked testimonies of some of the

individual complainants
LA dismissed the complaint.

A charge of unfair labor practice

connotes a finding of prima facie
evidence of probability that a criminal
offense may have been committed so
as to warrant the filing of criminal
information.

The charge of illegal lockout has no leg

to stand on because the testimony of
respondent
through
their
guard
Orlando Cairo that the complainants
refused and failed to report for work,
hence guilty of abandoning their post
without permission. Due to failure to
report to work, the cheese curls ready
for repacking were all spoiled.

Complainants also failed to specify

what type of threats or intimidation
was committed

MOA could not be the basis of an

obligation within the ambit of NLRC
jurisdiction as it spoke of a resolutory
condition which could or could not
happend

Complaint of underpayment has no leg

to stand on as the complainants
admission that they are piece workers
or paid on pakiao basis (certain amount
for every thousand pieces of cheese
curls or other products repacked). The
only limitation for piece workers is that
they should receive compensation no
less than the minimum wage for an 8
hour work. Lazy workers earn less than
minimum wage.

No moral and exemplary damages as

there was no malice, bad faith or fraud
NLRC affirmed LA decision. MR denied
Petitioners filed special civil action for certiorari
under Rule 65

pursuant to Article 279 of the Labor Code, as amended

by R.A. No. 6715.
o As piece workers or packyao basis employees,
it does not mean that they are not entitled to
reinstatement.
o The work of processed food repackers is
necessary in the day to day operations of
Empire Food Products
o Burden of proving existence of just cause for
dismissing
an
employee,
such
as
abandonment, rests with the employer, a
burden that it failed to discharge in this case
o Employees are entitled to reinstatement with
full back wages pursuant to Art. 279 of the LC.
However, taking into account the number of
employees, the length of time lapsed from
dismissal, the resentment and enmity between
the parties, reinstatement would be impractical
and hardly promotive of the best interests of
the parties. Separation pay at the rate of 1
month for every year of service, with a fraction
of at least 6 months of service considered as 1
year is in order
W/N employees rights security of tenure and
constitutional right to due process was violated YES,
Section 2, Rule XIV, Book V of the Omnibus Rules
Implementing the LC requires a written notice from the
employer constituting the grounds for his dismissal. In
cases of abandonment, notice to be served at the
workers last known address
W/N petitioners are entitled to back wages Cannot be
fully settled, as piece rate workers, there is a need to
determine the varying degrees of production and days
worked of each worker which must be settled by the
NLRC

W/N employees abandoned work NO, 2 days after the

supposed abandonment of work, they filed a complaint
for illegal dismissal
o In finding that the employees abandoned work,
LA and NLRC relied on the sole testimony of
Security Guard Cairo. The failure to work for
one day, which resulted in the spoilage of
cheese curls does not amount to abandonment
of work.
o In several cases, it has been held that one
could not possibly abandon his work and
shortly thereafter vigorously pursue his
complaint for illegal dismissal
o In De Ysasi III v NLRC, SC held that it is the
clear, deliberate and unjustified refusal to
resume employment and not mere absence
that constitutes abandonment. The absence of
petitioner employees for one day on January
21, 1991 as testified [to] by Security Guard
Orlando Cairo did not constitute abandonment.

W/N petitioners are regular employees YES,

although they are piece-rate workers they are
regular employees and are entitled to other
benefits (holiday pay, premium pay, 13th month
pay, service incentive leave)
o 3 factors to conclude that although piece
rate
workers,
they
were
regular
employees
1. The nature of the task of
repacking snack food was
necessary and desirable in the
usual business of respondents
who were engaged in the
manufacture and selling of
such food products
2. Petitioners worked throughout
the year, their employment not
having been dependent on a
specific project or season
3. The length of time that the
petitioners worked for the
respondents.
o Thus, while the mode of compensation
was on a per piece basis, the status and
nature of their employment was that of a
regular employee

W/N employees are entitled to reinstatement YES,

they are entitled to reinstatement with full back wages

W/N NLRC abused its discretion when it deprived

petitioners of their constitutional right to self-

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organization, security of tenure, protection to labor,

just and humane conditions of work and due process
NO, evidence does not support this claim
HELD: Petition GRANTED. NLRC and LA decision set
aside.
1. Declaring
employees
illegally
dismissed,
entitled to full back wages, and other
privileges, and separation pay in lieu of
reinstatement at the rate of one months salary
for every year of service with a fraction of six
months of service considered as one year;
2. Remanding the case to the NLRC for
determination of the back wages and other
benefits and separation pay; and
3. Directing NLRC to resolve the issued within 60
days from receipt of decision
PNCC Skyway Traffic Management and Security
Division Workers Organization (PSTMSDWO) v.
PNCC Skyway Corp.
G.R. No. 171231; February 17, 2010; Peralta, J.
Digest prepared by Carlo Roman
I.
-

Facts
Petitioner UNION and respondent PNCC
Skyway Corp. (MANAGEMENT) entered
into a CBA (Collective Bargaining Agreement)
incorporating the terms and conditions of their
agreement, including vacation leave and
expenses for security license provisions.
Pertinent provisions of the CBA:

ARTICLE VIII: VACATION LEAVE AND

SICK LEAVE
Sec. 1. Vacation Leave.
a. Regular Employees covered by the
bargaining
unit
who
have
completed at least one [1] year of
continuous service shall be entitled
to
vacation
leave
with pay
depending on the length of service
as follows:
1-9 years of service - 15 working days
10-15 years of service - 16 working days
16-20 years of service - 17 working days
21-25 years of service - 18 working days
26 and above years of service - 19 working days.
b.

The company shall schedule

the
vacation
leave
of
employees during the year taking
into consideration the request of
preference of the employees.
c. Any unused vacation leave
shall be converted to cash and
shall be paid to the employees on
the first week of December each
year."

ARTICLE XXI, Sec. 6: All covered

employees must possess a valid
Security Guard License issued by the
Chief of the PNP or his duly authorized
representative.
On December 29, 2003, a Memorandum by
MANAGEMENTs head of Traffic Management

and Security Dept. (TMSD) published the

scheduled vacation leave of its TMSD
personnel for the year 2004.
On January 9, 2004, another Memorandum was
issued, stating that employees must take a
vacation with pay (17 days, 15 days Scheduled
Vacation Leave With Pay [SVL] plus 2-day-off)
as a chance to spend time with their families
and
perform
other
personal
activities.
Swapping of SVL schedule is allowed upon
written request to be evaluated by the
company.

UNION objected to the implementation

of the said Memorandum, insisting that
UNION members have the right to
schedule their vacation leave on their
own. It alleged that the unilateral
scheduling
was
done
to
avoid
monetization of their vacation leave in
December 2004. It also demanded that
expenses for the required in-service
training of their security guards be
shouldered by MANAGEMENT.

MANAGEMENT did not accede to the

UNIONs demands, standing firm on its
decision to schedule the vacation leave
of UNIONs members.
UNION elevated the matter to the DOLE-NCMB
for preventive mediation. The parties failed to
settle the issue amicably, so the issue was
submitted to the Voluntary Arbitrator (VA).

VA: ruled for the UNION; scheduling of

vacation leaves to be left to the
employees, while MANAGEMENT shall
convert the leaves compelled to be
used to cash. MANAGEMENT ordered to
pay the expenses of in-service training.
On October 22, 2004, MANAGEMENT filed
Petition for Certiorari with Prayer for TRO and
Writ of Preliminary Injunction with the CA.

The CA annulled the VA decision,

stating that since the provisions of the
CBA were clear, the VA had no
authority to interpret the same beyond
what was expressly written.
Hence, this Petition for Review on Certiorari
filed by the UNION.

II.
1.
2.

Issues
LABOR ISSUE: W/N MANAGEMENT has the
sole discretion to schedule the vacation
leave of UNION members. YES.
W/N MANAGEMENT is liable for the inservice training of the security guards.
YES.

III.
Ratio
1. YES, MANAGEMENT has sole discretion to
schedule the vacation leave of UNION
members.
Where the language of a contract is plain and
unambiguous,
its
meaning
should
be
determined without reference to extrinsic facts
or aids. The intention of the parties must be
gathered from that language, and from that
language alone.
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In the case at bar, the contested

provision of the CBA is clear and
unequivocal. Article VIII, Section 1(b) of
the CBA categorically provides that the
scheduling
of
vacation
leave shall be under the option of
the
employer.
The
preference
requested by the employees is not
controlling because respondent retains
its power and prerogative to consider
or to ignore said request.

The
word
shall
connotes
an
imperative
command.
The
only
concession given under the subject
clause was that the company should
take into consideration the preferences
of the employees in scheduling the
vacations; but certainly, the concession
never diminished the positive right of
management to schedule the vacation
leaves in accordance with what had
been agreed and stipulated upon in the
CBA.

The literal meaning of the stipulation

shall prevail; the CBA must be strictly
adhered to and respected its ends are
to be achieved, being the law between
the parties. As stated in Faculty
Association of Mapua Institute of
Technology v. CA, the CBA during its
lifetime binds all parties. The parties
cannot be allowed to change the terms
they agreed upon on the ground that
the same are not favorable to them.
Indeed, the multitude or scarcity of personnel
manning the tollways should not rest upon the
option of the employees, as the public using
the skyway system should be assured of its
safety, security and convenience.
Although the preferred vacation leave schedule
of petitioner's members should be given
priority, they cannot demand, as a matter of
right, that their request be automatically
granted by the respondent. If the petitioners
were given the exclusive right to schedule
their vacation leave then said right
should have been incorporated in the
CBA.
In the grant of vacation leave privileges to an
employee, the employer is given the leeway to
impose conditions on the entitlement to and
commutation of the same, as the grant
of vacation leave is not a standard of law,
but a prerogative of management; being a
mere concession, it is well within the power of
the employer to impose certain conditions on
the grant of vacation leaves, such as having
the option to schedule the same.

Along that line, since the grant of

vacation leave is a prerogative of the
employer, the latter can compel its
employees to exhaust all their vacation
leave credits. Of course, any vacation
leave credits left unscheduled by the
employer, or any scheduled vacation
leave that was not enjoyed by the
employee
upon
the
employer's

2.
-

directive, due to exigencies of the

service, must be converted to cash, as
provided in the CBA.

However, it is incorrect to award the

cash equivalent for vacation leaves
already used, as such would constitute
unjust enrichment. The VA was thus in
error for doing so.
The purpose of a vacation leave is to afford a
laborer a chance to get a much-needed rest to
replenish his worn-out energy and acquire a
new vitality to enable him to efficiently perform
his duties, and not merely to give him
additional salary and bounty.

Accordingly, the vacation leave

privilege was not intended to
serve as additional salary, but as a
non-monetary benefit. To give the
employees the option not to consume
it (with the aim of converting it into
cash at the end of the year) defeats
the very purpose of vacation
leave.
YES, MANAGEMENT is liable for the expenses of
in-service training.
According to Art. 1306 of the Civil Code, the
contracting parties may establish such
stipulations, clauses, terms and conditions as
they may deem convenient, provided they are
not contrary to law, morals, good customs,
public order, or public policy.
Moreover, the relations between labor and
capital are not merely contractual, labor
contracts being impressed with public interest
and must yield to the common good.
Since it is the primary responsibility of
operators of company security forces to
maintain and upgrade the standards of
efficiency,
discipline,
performance
and
competence of their personnel, it follows that
the expenses to be incurred therein shall be for
the personal account of the company.

Sugue v. Triumph International

G.R. No. 164804; 30 January 2009;
Castro, J.
Digest prepared by Ron San Juan

Leonardo-De

Facts:

Sugue was hired in May 1990 as Marketing

Services Manager; Valderrama was hired in April
1993 as Direct Sales Manager. In October 1999,
Triumphs top management began to notice a
sharp decline in the sales of the company.

In 2000, in a separate case, Sugue and Valderrama

filed a complaint with the NLRC against Triumph for
payment of money claims arising from allegedly
unpaid vacation and sick leave credits, birthday
leave and 14th month pay for the period 19992000 (the period of the said decline in sales).
Triumph charged as half-day to their vacation leave
credit their time attending the preliminary
conference of said case.

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Thereafter, the applications of both Sugue and

Valderrama for leave credits were subjected to
various conditions.
o Sugue complained that the conditions
imposed upon her by the company before
granting her leaves (e.g. medical certificate
in the case of her applications for sick
leave and the submission of the companys
marketing plan in the case of her
applications for vacation leave) constituted
harassment and discrimination making her
work unbearable and, thus, prompting her
to file a complaint with the NLRC for
constructive dismissal against Triumph
International.
o Valderramas case is similar to that of
Sugues.
The
cited
complaints
for
constructive dismissal was premised on
their argument that they were being
singled out by the company because of
their earlier filing of money claims before
the NLRC against the company.

Issue:
1. Whether or not the conditions imposed by the
company for the granting of leave credits
amounted to discrimination or harassment,
supporting the claim of constructive dismissal.
(NO)
2. Whether or not Triumph is justified in charging their
absence (due to attending the preliminary
conference in the NLRC) to their Vacation Leave
(YES)
Held:
1. The conditions set by the company do not amount
to discrimination. In the grant of vacation and sick
leave privileges to an employee, the employer is
given leeway to impose conditions on the

2.

entitlement to the same as the grant of vacation

and sick leave is not a standard of law, but a
prerogative of management. It is a mere
concession or act of grace of the employer and not
a matter of right on the part of the employee.
Thus, it is well within the power and authority of an
employer to deny an employees application for
leave and the same cannot be perceived as
discriminatory or harassment. Triumph did not act
with discrimination, insensibility or disdain towards
Sugue and Valderrama, which foreclosed any
choice on their part except to forego their
continued employment.
Triumph is justified in charging Sugue and
Valderramas half-day absence to their vacation
leave credits. It is fair and reasonable for Triumph
to do so considering that Sugue and Valderrama
did not perform work for one-half day on June 19,
2000.

The age-old rule governing the relation between labor

and capital or management and employee is that a
fair days wage for a fair days labor. 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,
dismissed or suspended. It is hardly fair or just for an
employee or laborer to fight or litigate against his
employer on the employers time.
In a case where a laborer absents himself from work
because of a strike or to attend a conference or
hearing in a case or incident between him and his
employer, he might seek reimbursement of his wages
from his union which had declared the strike or filed
the case in the industrial court. Or, in the present case,
he might have his absence from his work charged
against his vacation leave.

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