Beruflich Dokumente
Kultur Dokumente
Volume I
A compilation submitted to
ATTY. JEFFERSON MARQUEZ
University of San Carlos
School of Law and Governance
Cebu City
Prepared by:
Tanya Ibanez
JD2, EH407
TABLE OF CONTENTS
BASIC PRINCIPLES
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25.
HIRING OF EMPLOYEE
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28.
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30.
31.
32.
33.
PAYMENT OF WAGES
92.
93.
94.
95.
CONDITIONS OF EMPLOYMENT
96. SAN JUAN DE DIOS HOSPITAL VS. NLRC
97. SIMEDARBY VS. NLRC
98. PHIL. AIRLINES VS. NLRC
99. LINTON COMMERCIAL CO., INC., VS. HELLERA ET AL.
100.
BISIG MANGGAGAWA SA TRYCO VS. NLRC
MINIMUM LABOR STANDARD BENEFITS
BASIC PRINCIPLES
Singer Sewing Machine vs. NLRC
January 24, 1991, 193 SCRA 271
Facts:
Singer Machine Collectors Union-Baguio (SIMACUB), private respondent, filed a petition for direct certification
as the sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine Company (Singer).
Singer opposed the petition claiming that the collectors are not employees but are independent contractors
as evidenced by the Collection Agency Agreement (Agreement) between them. The Med-Arbiter granted the
petition. Aggrieved, Singer appealed to the Secretary of Labor. The Secretary of Labor affirmed the MedArbiters Decision and denied Singers motion for reconsideration, hence, this petition for certiorari to review
the order and resolution of the Secretary of Labor and Employment.
Singer alleges that the collectors are not employees but independent contractors. It supported its allegation
by stating the following stipulations in the Agreement: (a) a collector is designated as a collecting agent
who is to be considered at all times as an independent contractor and not employee of Singer, (b) collection
are to be made monthly or oftener, (c) an agent is paid a commission of 6% of all collections plus a bonus,
xxx , (g) his services shall be terminated in case of failure to satisfy the required performance required.
Private respondent, on the other hand, relied on other features of the same Agreement. Among which are
that an agent shall utilize only receipt forms authorized and issued by Singer; an agent has to submit and
deliver at least once a week or as often as required a report of all collections made using report forms
furnished by Singer; and the monthly collection quota, which quota they deemed as a control measure over
the means by which an agent is to perform his services. They also relied on Article 280 of the Labor Code
and on Section 8 Rule 8, Book III of the Omnibus Rules defining job-contracting.
Issue:
Whether or not collectors of Singer are employees and therefore are constitutionally granted the right to join
or form labor organization for purposes of collective bargaining.
Ruing:
No, collectors of Singer are not employees. Hence, they are not entitled to the constitutional right to join or
form labor organization for purposes of collective bargaining. The Supreme Court mainly applied the control
test where the existence of employer-employee relationship is determined by the following elements: (a)
selection and engagement of the employee, (b) payment of wages, (c) power of dismissal and (d) power to
control the employees conduct although the latter is the most important element.
In that regard, it was ruled that the element on the power to control the employees conduct the most
important element was absent. The forms, schedule of delivery and quota were controls used only for the
result of the job, if they were really controls. There were also other circumstances uncontroverted in the
pleadings that made the Supreme Court rule that they are independent contractors like: (1) collectors are not
required to observe office hours nor report everyday; (2) they do not have to devote their time exclusively
for Singer; (3) the manner and method of effecting collections are left to their discretion xxx (5) they are paid
strictly on commission basis. These circumstances negate that Singer had any control as to the manner by
which collectors perform collections.
Art. 280 is not instructive because it only deals with casual and regular employees while the provision in the
Omnibus Rules is only relevant in ascertaining whether the employer is solidarily liable with the contractor or
subcontractor.
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ABS-CBN vs Nazareno
G.R. No. 164156, September 26, 2006
Facts:
ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on
different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu
Broadcasting Station, with a monthly compensation of P4,000. They were issued ABS-CBN employees
identification cards and were required to work for a minimum of eight hours a day, including Sundays and
holidays. They were made to: a) Prepare, arrange airing of commercial broadcasting based on the daily
operations log and digicart of respondent ABS-CBN; b) Coordinate, arrange personalities for air interviews;
c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or incoming reports;
d) Facilitate, prepare and arrange airtime schedule for public service announcement and complaints;
e) Assist, anchor program interview, etc; and f) Record, log clerical reports, man based control radio.
Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to
be effective during the period from Dec 11, 1996 to Dec 11, 1999. However, since petitioner refused to
recognize PAs as part of the bargaining unit, respondents were not included to the CBA.
Due to a memorandum assigning PAs to non-drama programs, and that the DYAB studio operations would be
handled by the studio technician. There was a revision of the schedule and assignments and that respondent
Gerzon was assigned as the full-time PA of the TV News Department reporting directly to Leo Lastimosa.
On Oct 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status,
Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and
13th Month Pay with Damages against the petitioner before the NLRC.
Issue:
Whether or not the respondents are regular employees?
Ruling:
Respondents are considered regular employees of ABS-CBN and are entitled to the benefits granted to all
regular employees.
Where a person has rendered at least one year of service, regardless of the nature of the activity performed,
or where the work is continuous or intermittent, the employment is considered regular as long as the activity
exists. The reason being that a customary appointment is not indispensable before one may be formally
declared as having attained regular status. Article 280 of the Labor Code provides:
REGULAR AND CASUAL EMPLOYMENT.The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
Any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed
regular with respect to the activity performed and while such activity actually exists. The fact that
respondents received pre-agreed talent fees instead of salaries, that they did not observe the required
office hours, and that they were permitted to join other productions during their free time are not conclusive
of the nature of their employment. They are regular employees who perform several different duties under
the control and direction of ABS-CBN executives and supervisors.
There are two kinds of regular employees under the law: (1) those engaged to perform activities
which are necessary or desirable in the usual business or trade of the employer; and (2) those casual
employees who have rendered at least one year of service, whether continuous or broken, with respect
to the activities in which they are employed.
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Among the company regulations of Manulife are the different codes of. The fact that Tongko was obliged to
obey and comply with the codes of conduct was not disowned by respondents. Thus, with the company
regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be
established. Certainly, these requirements controlled the means and methods by which Tongko was to
achieve the company's goals. More importantly, Manulife's evidence establishes the fact that Tongko was
tasked to perform administrative duties that establishes his employment with Manulife.
Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain number of
agents, in addition to his other administrative functions, leads to no other conclusion that he was an
employee of Manulife.
Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the burden of proving
the validity of the termination of employment rests on the employer. Failure to discharge this evidential
burden would necessarily mean that the dismissal was not justified, and, therefore, illegal.
The Labor Code provides that an employer may terminate the services of an employee for just cause and this
must be supported by substantial evidence. The settled rule in administrative and quasi-judicial proceedings
is that proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal
of an employee, and not even a preponderance of evidence is necessary as substantial evidence is
considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as
a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise.
Here, Manulife failed to overcome such burden of proof. It must be reiterated that Manulife even failed to
identify the specific acts by which Tongko's employment was terminated much less support the same with
substantial evidence. To repeat, mere conjectures cannot work to deprive employees of their means of
livelihood. Thus, it must be concluded that Tongko was illegally dismissed.
Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its
employee is not entitled to such notices. Since we have ruled that Tongko is its employee, however, Manulife
clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal dismissal.
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Lirio vs Genovia
G.R. No. 169757, NOVEMBER 23, 2011
Facts:
On July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor
Ad Sonicmix Recording Studio for illegal dismissal, non-payment of commission and award of moral and
exemplary damages.
In his Position Paper, respondent Genovia alleged, among others, that on August 15, 2001, he was hired as
studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio (Celkor). He was employed
to manage and operate Celkor and to promote and sell the recording studio's services to music enthusiasts
and other prospective clients. He received a monthly salary of P7,000.00. They also agreed that he was
entitled to an additional commission of P100.00 per hour as recording technician whenever a client uses the
studio for recording, editing or any related work. He was made to report for work from Monday to Friday from
9:00 a.m. to 6 p.m. On Saturdays, he was required to work half-day only, but most of the time, he still
rendered eight hours of work or more. All the employees of petitioner, including respondent, rendered
overtime work almost every day, but petitioner never kept a daily time record to avoid paying the employees
overtime pay.
Respondent stated that a few days after he started working as a studio manager, petitioner approached him
and told him about his project to produce an album for his 15-year-old daughter, Celine Mei Lirio, a former
talent of ABS-CBN Star Records. Petitioner asked respondent to compose and arrange songs for Celine and
promised that he (Lirio) would draft a contract to assure respondent of his compensation for such services.
As agreed upon, the additional services that respondent would render included composing and arranging
musical scores only, while the technical aspect in producing the album, such as digital editing, mixing and
sound engineering would be performed by respondent in his capacity as studio manager for which he was
paid on a monthly basis. Petitioner instructed respondent that his work on the album as composer and
arranger would only be done during his spare time, since his other work as studio manager was the priority.
Respondent then started working on the album.
Respondent alleged that before the end of September 2001, he reminded petitioner about his compensation
as composer and arranger of the album. Petitioner verbally assured him that he would be duly compensated.
By mid-November 2001, respondent finally finished the compositions and musical arrangements of the songs
to be included in the album. Before the month ended, the lead and back-up vocals in the ten (10) songs were
finally recorded and completed. From December 2001 to January 2002, respondent, in his capacity as studio
manager, worked on digital editing, mixing and sound engineering of the vocal and instrumental audio files.
Thereafter, respondent was tasked by petitioner to prepare official correspondence, establish contacts and
negotiate with various radio stations, malls, publishers, record companies and manufacturers, record bars
and other outlets in preparation for the promotion of the said album. By early February 2002, the album was
in its manufacturing stage. ELECTROMAT, manufacturer of CDs and cassette tapes, was tapped to do the job.
The carrier single of the album, which respondent composed and arranged, was finally aired over the radio
on February 22, 2002.
On February 26, 2002, respondent again reminded petitioner about the contract on his compensation as
composer and arranger of the album. Petitioner told respondent that since he was practically a nobody and
had proven nothing yet in the music industry, respondent did not deserve a high compensation, and he
should be thankful that he was given a job to feed his family. Petitioner informed respondent that he was
entitled only to 20% of the net profit, and not of the gross sales of the album, and that the salaries he
received and would continue to receive as studio manager of Celkor would be deducted from the said 20%
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In this case, the documentary evidence presented by respondent to prove that he was an employee of
petitioner are as follows: (a) a document denominated as "payroll" (dated July 31, 2001 to March 15,
2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00
(P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding
deductions due to absences incurred by respondent; and (2) copies of petty cash vouchers, showing the
amounts he received and signed for in the payrolls.
The said documents showed that petitioner hired respondent as an employee and he was paid monthly
wages of P7, 000.00. Petitioner wielded the power to dismiss as respondent stated that he was verbally
dismissed by petitioner, and respondent, thereafter, filed an action for illegal dismissal against petitioner.
The power of control refers merely to the existence of the power. It is not essential for the employer to
actually supervise the performance of duties of the employee, as it is sufficient that the former has a right to
wield the power. Nevertheless, petitioner stated in his Position Paper that it was agreed that he would help
and teach respondent how to use the studio equipment. In such case, petitioner certainly had the power to
check on the progress and work of respondent.
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I am a CPA by profession but presently associated with, or employed by, Sobien Food Corporation
with the same business address as abovestated;
In the course of my association with, or employment by, Sobien Food Corporation (SFC, for short), I
have been entrusted by my employer to oversee and supervise collections on account of receivables
due SFC from its customers or clients; for instance, certain checks due and turned over by one of
SFC's customers is BCC Product Sales, Inc., operated or run by one Terrance L. Ty, (President and
General manager).
Petitioner counters, however, that the affidavit did not establish the absence of an employer-employee
relationship between him and respondents because it had been executed in March 1996, or after his
employment with respondents had been terminated on December 12, 1995; and that the affidavit referred to
his subsequent employment by SFC following the termination of his employment by BCC.
Issue:
The sole issue is whether or not an employer-employee relationship existed between petitioner and BCC.
Ruling:
In determining the presence or absence of an employer-employee relationship, the Court has consistently
looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment
of wages; (c) the power of dismissal; and (d) the employer's power to control the employee on the means
and methods by which the work is accomplished. The last element, the so-called control test, is the most
important element.
Petitioner presented no document setting forth the terms of his employment by BCC. The failure to present
such agreement on terms of employment may be understandable and expected if he was a common or
ordinary laborer who would not jeopardize his employment by demanding such document from the
employer, but may not square well with his actual status as a highly educated professional.
Petitioner's admission that he did not receive his salary for the three months of his employment by BCC, as
his complaint for illegal dismissal and non-payment of wages and the criminal case for estafa he later filed
against the respondents for non-payment of wages indicated, further raised grave doubts about his assertion
of employment by BCC. If the assertion was true, we are puzzled how he could have remained in BCC's
employ in that period of time despite not being paid the first salary of P20,000.00/month. Moreover, his
name did not appear in the payroll of BCC despite him having approved the payroll as comptroller.
Lastly, the confusion about the date of his alleged illegal dismissal provides another indicium of the
insincerity of petitioner's assertion of employment by BCC. In the petition for review on certiorari, he averred
that he had been barred from entering the premises of BCC on October 19, 1995, 27 and thus was illegally
dismissed. Yet, his complaint for illegal dismissal stated that he had been illegally dismissed on December
12, 1995 when respondents' security guards barred him from entering the premises of BCC, 28 causing him
to bring his complaint only on December 29, 1995, and after BCC had already filed the criminal complaint
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He could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00
pm, three to six times a week;
He could not choose the place of his performance;
The restaurants manager required him at certain times to perform only Tagalog songs or music, or
to wear barong Tagalog to conform to the Filipiniana motif; and
He was subjected to the rules on employees representation check and chits, a privilege granted to
other employees.
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He is a regular employee of Royale Homes since he is performing tasks that are necessary and
desirable to its business
The company gave him P1.2 million for the services he rendered to it
The executive officers of Royale Homes told him that they were wondering why he still had the gall
to come to office and sit at his table. The acts of the executive officers of Royale Homes amounted
to his dismissal from work without any valid or just cause and in gross disregard of the proper
procedure for dismissing employees.
Royale Homes Contention:
The appointment paper of Alcantara is clear that it engaged his services as an independent sales
contractor for a fixed term of one year only. He never received any salary, 13th month pay, overtime
pay or holiday pay from Royale Homes as he was paid purely on commission basis.
Royale Homes had no control on how Alcantara would accomplish his tasks and responsibilities as he
was free to solicit sales at any time and by any manner which he may deem appropriate and
necessary.
Issue:
Whether or not there exists employer-employee relationship between Alcantara and Royale Homes.
Ruling:
The juridical relationship of the parties based on their written contract. The contract, duly signed and not
disputed by the parties, conspicuously provides that "no employer-employee relationship exists between"
Royale Homes and Alcantara, as well as his sales agents. While the existence of employer-employee
relationship is a matter of law, the characterization made by the parties in their contract as to the nature of
their juridical relationship cannot be simply ignored.
The juridical relationship of the parties based on Control Test. In determining the existence of an employeremployee relationship, this Court has generally relied on the four-fold test, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's
power to control the employee with respect to the means and methods by which the work is to be
accomplished. Among the four, the most determinative factor in ascertaining the existence of employeremployee relationship is the "right of control test".
Not every form of control is indicative of employer-employee relationship. As long as the level of control does
not interfere with the means and methods of accomplishing the assigned tasks, the rules imposed by the
hiring party on the hired party do not amount to the labor law concept of control that is indicative of
employer-employee relationship.
In this case, the Court agrees with Royale Homes that the rules, regulations, code of ethics, and periodic
evaluation alluded to by Alcantara do not involve control over the means and methods by which he was to
perform his job. To the mind of this Court, these do not pertain to the means and methods of how Alcantara
was to perform and accomplish his task of soliciting sales.
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As the party claiming the existence of employer-employee relationship, it behoved upon Alcantara to prove
the elements thereof, particularly Royale Homes' power of control over the means and methods of
accomplishing the work. He, however, failed to discharge such burden.
On the other hand, this case is replete with instances that negate the element of control and the existence of
employer-employee relationship. Notably, Alcantara was not required to observe definite working hours.
Except for soliciting sales, Royale Homes did not assign other tasks to him. He had full control over the
means and methods of accomplishing his tasks as he can "solicit sales at any time and by any manner which
[he may] deem appropriate and necessary." He performed his tasks on his own account free from the control
and direction of Royale Homes in all matters connected therewith, except as to the results thereof.
Neither does the repeated hiring of Alcantara prove the existence of employer-employee relationship. The
continuous rehiring of Alcantara simply signifies the renewal of his contract with Royale Homes. Alcantara
was not prohibited from engaging in any other business as long as he does not sell projects of Royale Homes'
competitors.
Payment of Wages
The element of payment of wages is also absent in this case. As provided in the contract, Alcantara's
remunerations consist only of commission override of 0.5%, budget allocation, sales incentive and other
forms of company support. There is no proof that he received fixed monthly salary. No payslip or payroll was
ever presented and there is no proof that Royale Homes deducted from his supposed salary withholding tax
or that it registered him with the Social Security System, Philippine Health Insurance Corporation, or Pag-Ibig
Fund. All of these indicate an independent contractual relationship.
This Court is, therefore, convinced that Alcantara is not an employee of Royale Homes, but a mere
independent contractor.
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The Talents creation and performance of work in accordance with the ABS-CBNs professional
standards and compliance with its policies and guidelines covering intellectual property creators,
industry codes as well as the rules and regulations of the Kapisanan ng mga Broadcasters sa
Pilipinas (KBP) and other regulatory agencies;
b)
The Talents non-engagement in similar work for a person or entity directly or indirectly in
competition with or adverse to the interests of ABS-CBN and non-promotion of any product or
service without prior written consent;
c)
The results-oriented nature of the talents work which did not require them to observe normal or
fixed working hours. Subjected to contractors tax, petitioners remunerations were denominated as
Talent Fees which, as of last renewal, were admitted to be pegged per airing day at P273.35 for
Begino, P 302.92 for Del Valle, P 323.08 for Sumayao and P 315.39 for Llorin.
Petitioners claim for regularization, underpayment of overtime pay, holiday pay, 13th month pay and service
incentive leave pay. They also claim that their work is necessary in the business of ABS CBN. They further
allege that they were working under the direct supervision and control of ABSCBN.
Respondent argued that, although it occasionally engages in production and generates programs thru
various means, ABS-CBN is primarily engaged in the business of broadcasting television and radio content.
Not having the full manpower complement to produce its own program, the company had allegedly resorted
to engaging independent contractors like actors, directors, artists, anchormen, reporters, scriptwriters and
various production and technical staff, who offered their services in relation to a particular program.
Petioners filed a 2nd complaint for the same cause of action due to the fact that ABS CBN terminated their
services during the pendency of the first case.
Issues:
Whether or not petitioners may claim from ABS?
Whether or not there is an employer employee relationship?
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Ruling:
To determine the existence of said relation, case law has consistently applied the four-fold test, to wit: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employer's power to control the employee on the means and methods by which the work is
accomplished.23 Of these criteria, the so-called control test is generally regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship. Under this test,
an employer-employee relationship is said to exist where the person for whom the services are performed
reserves the right to control not only the end result but also the manner and means utilized to achieve the
same.
ART. 280. Regular and Casual Employment: The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That,
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 the activity in which he is employed and his
employment shall continue while such actually exists.
The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment
Forms and the terms and condition embodied therein, petitioners are regular employees of ABS-CBN. Time
and again, it has been ruled that the test to determine whether employment is regular or not is the
reasonable connection between the activity performed by the employee in relation to the business or trade
of the employer. As cameramen/editors and reporters, petitioners were undoubtedly performing functions
necessary and essential to ABS-CBNs business of broadcasting television and radio content. It matters little
that petitioners services were engaged for specified periods for TV Patrol Bicol and that they were paid
according to the budget allocated therefor. Aside from the fact that said program is a regular weekday fare
of the ABS-CBNs Regional Network Group in Naga City, the record shows that, from their initial engagement
in the aforesaid capacities, petitioners were continuously re-hired by respondents over the years. To the
mind of the Court, respondents repeated hiring of petitioners for its long-running news program positively
indicates that the latter were ABS-CBNs regular employees.
Also, the court finds that petitioners were under the direct control and supervision of the network. Thus, SC
ruled in favor of petitioners.
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HIRING OF EMPLOYEE
Ollendor vs Abrahanson
38 Phil 585
Facts:
An agreement was entered into by Ollendorff and Abrahamson whereby theformer agreed to employ
Abrahamson and the latter bound himself to work for him for a period of 2yrs with a salary of P50 per week.
Included in the agreement is a prohibition of Abrahamson from engaging in a similar or competitive business
to anywhere within the Philippine Islands for a period of five years. The duties performed by the defendant
were such to make it necessary for him to be generally knowledgeable of Ollendorffs business, moreover, he
had been engaged in similar work for several years even before his employment of the plaintiffs embroidery
business.
After some months from his departure for the US, Abrahamson returned to Manila and is now a manager of
the Philippine Underwear Co. This corporation, unlike Ollendorffs, does not maintain a factory in Phil. Islands
but send material and embroidery designs from New York to its local representative here who employs
Filipino needle workers to embroider the designs and make up the garments in their homes. The only
difference between plaintiff's business and that of the firm by which the defendant is employed, is the
method of doing the finishing work -- the manufacture of the embroidered material into finished garments.
Plaintiff commenced an action to prevent by injunction, any further breach of that part of defendant's
contract of employment by which he agreed that he would not "enter into or engage himself directly or
indirectly . . . in a similar or competitive business to that of (plaintiff) anywhere within the Philippine Islands
for a period of five years . . ." from the date of the agreement.
Issue:
Whether the part of the agreement restraining the defendant from engaging into similar business of the
plaintiff is void?
Ruling:
The contract was not void as constituting an unreasonable restraint of trade. The rule in this jurisdiction is
that the obligations created by contracts have the force of law between the contracting parties and must be
enforce in accordance with their tenor. (Civil Code, art 1091.) The only limitation upon the freedom of
contractual agreement is that the pacts established shall not be contrary to "law, morals or public order."
(Civil Code, Art. 1255.)
Following the rule in Mitchel vs. Reynolds, Court adopt the modern rule that the validity of restraints upon
trade or employment is to be determined by the intrinsinc reasonableness of restriction in each case, rather
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New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3rd
degree of relationship, already employed by the company.
In case of two of our employees (both singles [sic], one male and another female) developed a
friendly relationship during the course of their employment and then decided to get married, one of
them should resign to preserve the policy stated above.
Issue:
Whether or not the policy of the employer banning spouses from working in the same company violates the
rights of the employee under the Constitution and the Labor Code or is a valid exercise of management
prerogative?
Ruling:
Petitioners sole contention that "the company did not just want to have two or more of its employees related
between the third degree by affinity and/or consanguinity" is lame.
Article 136 of the Labor Code which provides:
It shall be unlawful for an employer to require as a condition of employment or continuation of employment
that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married a
woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage.
The requirement is that a company policy must be reasonable under the circumstances to qualify as a valid
exercise of management prerogative. It is significant to note that in the case at bar, respondents were hired
after they were found fit for the job, but were asked to resign when they married a co-employee. Petitioners
failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an
employee of the Repacking Section, could be detrimental to its business operations. e. The policy is premised
on the mere fear that employees married to each other will be less efficient. If we uphold the questioned rule
without valid justification, the employer can create policies based on an unproven presumption of a
perceived danger at the expense of an employees right to security of tenure.
The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate
effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it
is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a
legitimate business concern in imposing the questioned policy cannot prejudice the employees right to be
free from arbitrary discrimination based upon stereotypes of married persons working together in one
company.
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Mabeza vs NLRC
271 SCRA 670
Facts:
Petitioner Norma Mabeza contends that around the first week of May, 1991, she and her co-employees at the
Hotel Supreme in Baguio City were asked by the hotel's management to sign an instrument attesting to the
latter's compliance with minimum wage and other labor standard provisions of law.||| The instrument
provides among others
4. That we have no complaints against the management of the Hotel Supreme as we are
paid accordingly and that we are treated well.
5. That we are executing this affidavit voluntarily without any force or intimidation and for
the purpose of informing the authorities concerned and to dispute the alleged report of
the Labor Inspector of the Department of Labor and Employment conducted on the said
establishment on February 2, 1991.
As gleaned from the affidavit, the same was drawn by management for the sole purpose of refuting findings
of the Labor Inspector of DOLE (in an inspection of respondent's establishment on February 2, 1991)
apparently adverse to the private respondent.
After she refused to proceed to the City Prosecutor's Office on the same day the affidavit was submitted to
the Cordillera Regional Office of DOLE petitioner avers that she was ordered by the hotel management to
turn over the keys to her living quarters and to remove her belongings from the hotel premises.
Issue:
Whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor practice.
Ruling:
The pivotal question in any case where unfair labor practice on the part of the employer is alleged is whether
or not the employer has exerted pressure, in the form of restraint, interference or coercion, against his
employee's right to institute concerted action for better terms and conditions of employment. Without doubt,
the act of compelling employees to sign an instrument indicating that the employer observed labor
standards provisions of law when he might have not, together with the act of terminating or coercing those
who refuse to cooperate with the employer's scheme constitutes unfair labor practice. The first act clearly
preempts the right of the hotel's workers to seek better terms and conditions of employment through
concerted action.
For refusing to cooperate with the private respondent's scheme, petitioner was obviously held up as an
example to all of the hotel's employees, that they could only cause trouble to management at great personal
inconvenience. Implicit in the act of petitioner's termination and the subsequent filing of charges against her
was the warning that they would not only be deprived of their means of livelihood, but also possibly, their
personal liberty.
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Facts:
The RTWPB Region V issued Wage Order No. RB 05-03 which provided for a Cost of Living Allowance (COLA)
to workers in the private sector who had rendered service for at least three (3) months before its effectivity,
and for the same period thereafter, in the following categories: P17.50 in the cities of Naga and Legaspi;
P15.50 in the municipalities of Tabaco, Daraga, Pili and the city of Iriga; and P10.00 for all other areas in the
Bicol Region.
On November 1993, RTWPB Region VII issued Wage Order No. RB VII-03, which directed the integration of the
COLA mandated pursuant to Wage Order No. RO VII-02-A into the basic pay of all workers. It also established
an increase in the minimum wage rates for all workers and employees in the private sector as follows: by Ten
Pesos (P10.00) in the cities of Cebu, Mandaue and Lapulapu; Five Pesos (P5.00) in the municipalities of
Compostela, Liloan, Consolacion, Cordova, Talisay, Minglanilla, Naga and the cities of Davao, Toledo,
Dumaguete, Bais, Canlaon, and Tagbilaran. The bank granted a COLA of P17.50 to its employees at its Naga
Branch, the only branch covered by Wage Order No. RB 5-03, and integrated the P150.00 per month COLA
into the basic pay of its rank-and-file employees at its Cebu, Mabolo and P. del Rosario branches, the
branches covered by Wage Order No. RB VII-03.
On June 7, 1994, Prubankers Association wrote the petitioner requesting that the Labor Management
Committee be immediately convened to discuss and resolve the alleged wage distortion created in the salary
structure upon the implementation of the said wage orders. It demanded in the Labor Management
Committee meetings that the petitioner extend the application of the wage orders to its employees outside
Regions V and VII, claiming that the regional implementation of the said orders created a wage distortion in
the wage rates of petitioner's employees nationwide. As the grievance could not be settled in the said
meetings, the parties agreed to submit the matter to voluntary arbitration.
Issue:
Whether a wage distortion resulted from respondent's implementation of the Wage Orders.
Ruling:
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The hierarchy of positions was still preserved. The levels of different pay classes was not eliminated. The
statutory definition of wage distortion is found in Article 124 of the Labor Code, as amended by Republic Act
No. 6727, which reads: Standards/Criteria for Minimum Wage Fixing . . ."As used herein, a wage distortion
shall mean a situation where an increase in prescribed wage results in the elimination or severe contraction
of intentional quantitative differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills,
length of service, or other logical bases of differentiation."
Wage distortion involves four elements: (1) An existing hierarchy of positions with corresponding salary
rates; (2) A significant change in the salary rate of a lower pay class without a concomitant increase in the
salary rate of a higher one; (3)The elimination of the distinction between the two levels and (4) The existence
of the distortion in the same region of the country.
A disparity in wages between employees holding similar positions but in different regions does not constitute
wage distortion as contemplated by law. As stated, it is the hierarchy of positions and the disparity of their
corresponding wages and other emoluments that are sought to be preserved by the concept of wage
distortion.
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Millare vs NLRC
305 SCRA 501
Facts:
Petitioners numbering one hundred sixteen (116) occupied the positions of Technical Staff, Unit Manager,
Section Manager, Department Manager, Division Manager and Vice President in the mill site of respondent
Paper Industries Corporation of the Philippines (PICOP) in Bislig, Surigao del Sur.
In 1992 PICOP suffered a major financial setback allegedly brought about by the joint impact of restrictive
government regulations on logging and the economic crisis. To avert further losses, it undertook a
retrenchment program and terminated the services of petitioners.
Accordingly, petitioners received separation pay computed at the rate of one (1) month basic pay for every
year of service. Believing however that the allowances they allegedly regularly received on a monthly basis
during their employment should have been included in the computation thereof they lodged a complaint for
separation pay differentials.
PICOP grants the following allowances:
Staff allowance/managers allowance to those who live in rented houses near the mill site which
ceases whenever a vacancy occurs in the companys free housing facilities.
Transportation allowance in the form of advances for actual transportation expenses subject to
liquidation is given to key officers and managers who use their own vehicles in the performance of their
duties. This privilege is discontinued when the conditions no longer obtain.
Bislig allowance is given to managers and officers on account of the hostile environment prevailing
therein. Once the recipient is transferred elsewhere, the allowance ceases.
Applying Art. 97, par. (f), of the Labor Code which defines "wage," the Executive Labor Arbiter opined that
the subject allowances, being customarily furnished by respondent PICOP and regularly received by
petitioners, formed part of the latter's wages.
On appeal, the National Labor Relations Commission (NLRC) did not view in favor of the Executive Labor
Arbiter. On 7 October 1994 it set aside the assailed decision by decreeing that the allowances did not form
part of the salary base used in computing separation pay.
Issue:
Whether or not the allowances in question are considered facilities customarily furnished.
Ruling:
The Staff/Manager's allowance may fall under "lodging" but the transportation and Bislig allowances are not
embraced in "facilities" on the main consideration that they are granted as well as the Staff/Manager's
allowance for respondent PICOP's benefit and convenience, i.e., to insure that petitioners render quality
performance. In determining whether a privilege is a facility, the criterion is not so much its kind but its
purpose. That the assailed allowances were for the benefit and convenience of respondent company was
supported by the circumstance that they were not subjected to withholding tax.
In addition, the Secretary of Labor and Employment under Sec. 6, Rule VII, Book III, of the Rules
Implementing the Labor Code may from time to time fix in appropriate issuances the "fair and reasonable
value of board, lodging and other facilities customarily furnished by an employer to his employees."
Petitioners' allowances do not represent such fair and reasonable value as determined by the proper
authority simply because the Staff/Manager's allowance and transportation allowance were amounts given
by respondent company in lieu of actual provisions for housing and transportation needs whereas the Bislig
allowance was given in consideration of being assigned to the hostile environment then prevailing in Bislig.
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WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R.
SP No. 65171 and Resolution dated January 11, 2005 are REVERSED and SET ASIDE. The Decision of the
Voluntary Arbitrator is REINSTATED. No costs.
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Labor Arbiter rendered decision that Sadacs termination was illegal and entitled to reinstatement and
payment of full back wages. NLRC affirmed the decision upon appeal by the Bank. Sadac filed for execution
of judgment where it gave its computation which amounted to P 6.03 M representing his back wages and
the increases he should have received during the time he was illegally dismissed. The Bank opposed to
Sadacs computation. The Labor Arbiter favor Sadacs computation. NLRC, upon appeal by the bank,
reversed the decision. CA reversed the decision of NLRC. Hence, this petition.
Issue:
Whether or not the computation of back wages shall include the general increases.
Ruling:
To resolve the issue, the court revisits its pronouncements on the interpretation of the term back wages.
Back wages in general are granted on grounds of equity for earnings which a worker or employee has lost
due to his illegal dismissal. It is not private compensation or damages but is awarded in furtherance and
effectuation of the public objective of the Labor Code. Nor is it a redress of a private right but rather in the
nature of a command to the employer to make public reparation for dismissing an employee either due to
the formers unlawful act or bad faith.
In the case of Bustamante v. National Labor Relations Commission, It said that the Court deems it
appropriate to reconsider such earlier ruling on the computation of back wages by now holding that
conformably with the evident legislative intent as expressed in Rep. Act No. 6715, back wages to be
awarded to an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the
earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this
ruling is that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to
support himself and family, while full backwages have to be paid by the employer as part of the price or
penalty he has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in
Rep. Act No. 6715 is to give more benefits to workers than was previously given them. Thus, a closer
adherence to the legislative policy behind Rep. Act No. 6715 points to "full backwages" as meaning exactly
that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee
during the period of his illegal dismissal.
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Whether or not the respondent should be allowed to recover the differential due to the failure of the
petitioner to pay the minimum wage.
Whether or not value of the facilities that the private respondents enjoyed should be included in the
computation of the "wages" received by them
Ruling:
As a general rule, on payment of wages, a party who alleges payment as a defense has the burden of
proving it. Specifically with respect to labor cases, the burden of proving payment of monetary claims rests
on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and
other similar documents -- which will show that overtime, differentials, service incentive leave and other
claims of workers have been paid -- are not in the possession of the worker but in the custody and absolute
control of the employer.
In this case, petitioners, aside from bare allegations that private respondents received wages higher than the
prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their defense of
payment. Thus, petitioners utterly failed to discharge the onus probandi.
On whether the value of the facilities should be included in the computation of the "wages" received by
private respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an employer may provide
subsidized meals and snacks to his employees provided that the subsidy shall not be less that 30% of the fair
and reasonable value of such facilities. In such cases, the employer may deduct from the wages of the
employees not more than 70% of the value of the meals and snacks enjoyed by the latter, provided that
such deduction is with the written authorization of the employees concerned.
Moreover, before the value of facilities can be deducted from the employees' wages, the following requisites
must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade;
second, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and
finally, facilities must be charged at reasonable value. Mere availment is not sufficient to allow deductions
from employees' wages.
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These requirements, however, have not been met in this case. SLL failed to present any company policy or
guideline showing that provisions for meals and lodging were part of the employee's salaries. It also failed to
provide proof of the employees' written authorization, much less show how they arrived at their valuations.
At any rate, it is not even clear whether private respondents actually enjoyed said facilities.
In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and
over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the
laborers' basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food,
lodging, bonus or sick leave) given, but in the purpose for which it is given. In the case at bench, the items
provided were given freely by SLL for the purpose of maintaining the efficiency and health of its workers
while they were working at their respective projects.
For said reason, the cases of Agabon and Glaxo are inapplicable in this case. At any rate, these were cases of
dismissal with just and authorized causes. The present case involves the matter of the failure of the
petitioners to comply with the payment of the prescribed minimum wage.
The Court sustains the deletion of the award of differentials with respect to respondent Roldan Lopez. As
correctly pointed out by the CA, he did not work for the project in Antipolo.
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Fact:
Petitioner Ricardo E. Vergara, Jr. was an employee of respondent Coca-Cola Bottlers Philippines, Inc. from May
1968 until he retired on January 31, 2002 as a District Sales Supervisor (DSS) for Las Pias City, Metro
Manila.
As stipulated in respondent's existing Retirement Plan Rules and Regulations at the time, the Annual
Performance Incentive Pay of RSMs, DSSs, and SSSs shall be considered in the computation of retirement
benefits, as follows: Basic Monthly Salary + Monthly Average Performance Incentive (which is the total
performance incentive earned during the year immediately preceding 12 months) No. of Years in Service.
Claiming his entitlement to an additional PhP474,600.00 as Sales Management Incentives (SMI) and to the
amount of PhP496,016.67 which respondent allegedly deducted illegally, representing the unpaid accounts
of two dealers within his jurisdiction, petitioner filed a complaint before the NLRC on June 11, 2002 for the
payment of his "Full Retirement Benefits, Merit Increase, Commission/Incentives, Length of Service, Actual,
Moral and Exemplary Damages, and Attorney's Fees."
(Apparently, Petitioner argued that the granting of SMI to all retired DSSs regardless of whether or not they
qualify to the same had ripened into company practice. The only two pieces of evidence that he stubbornly
presented throughout the entirety of this case are the sworn statements of Renato C. Hidalgo (Hidalgo) and
Ramon V. Velazquez (Velasquez), former DSSs of respondent who retired in 2000 and 1998, respectively.
They claimed that the SMI was included in their retirement package even if they did not meet the sales and
collection qualifiers. Therefore, the failure of employer to grant him his SMI is a violation on the principle of
non-diminution of benefits.)
Issue:
Whether or not the granting of SMI to all retired DSSs regardless of whether or not they qualify to the same
had ripened into company practice
Ruling:
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the grant or benefit is founded on a policy or has ripened into a practice over a long period of time;
2.
3.
the practice is not due to error in the construction or application of a doubtful or difficult question of
law; and
4.
To be considered as a regular company practice, the employee must prove by substantial evidence that the
giving of the benefit is done over a long period of time, and that it has been made consistently and
deliberately. Jurisprudence has not laid down any hard-and-fast rule as to the length of time that company
practice should have been exercised in order to constitute voluntary employer practice. The common
denominator in previously decided cases appears to be the regularity and deliberateness of the grant of
benefits over a significant period of time. It requires an indubitable showing that the employer agreed to
continue giving the benefit knowing fully well that the employees are not covered by any provision of the law
or agreement requiring payment thereof. In sum, the benefit must be characterized by regularity, voluntary
and deliberate intent of the employer to grant the benefit over a considerable period of time.
Upon review of the entire case records, We find no substantial evidence to prove that the grant
of SMI to all retired DSSs regardless of whether or not they qualify to the same had ripened into
company practice.
The granting of the SMI in the retirement package of Velazquez was an isolated incident and could hardly be
classified as a company practice that may be considered an enforceable obligation. To repeat, the
principle against diminution of benefits is applicable only if the grant or benefit is founded on an
express policy or has ripened into a practice over a long period of time which is consistent and
deliberate; it presupposes that a company practice, policy and tradition favorable to the
employees has been clearly established; and that the payments made by the company pursuant
to it have ripened into benefits enjoyed by them. Certainly, a practice or custom is, as a general rule,
not a source of a legally demandable or enforceable right. Company practice, just like any other fact, habits,
customs, usage or patterns of conduct, must be proven by the offering party who must allege and establish
specific, repetitive conduct that might constitute evidence of habit or company practice.
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Facts:
Under the employ of each bottling plant of Coca-Cola are bottling operators. In the case of the plant in Cebu
City, there are 20 bottling operators who work for its Bottling Line 1 while there are 12-14 bottling operators
who man its Bottling Line 2. All of them are male and they are members of herein respondent Royal Plant
Workers Union (ROPWU).
In 1974, the bottling operators of then Bottling Line 2 were provided with chairs upon their request. In 1988,
the bottling operators of then Bottling Line 1 followed suit and asked to be provided also with chairs. Their
request was likewise granted. Sometime in September 2008, the chairs provided for the operators were
removed pursuant to a national directive of petitioner. This directive is in line with the "I Operate, I Maintain, I
Clean" program of petitioner for bottling operators, wherein every bottling operator is given the responsibility
to keep the machinery and equipment assigned to him clean and safe. The program reinforces the task of
bottling operators to constantly move about in the performance of their duties and responsibilities.
With this task of moving constantly to check on the machinery and equipment assigned to him, a bottling
operator does not need a chair anymore, hence, petitioners directive to remove them. Furthermore, CCBPI
rationalized that the removal of the chairs is implemented so that the bottling operators will avoid sleeping,
thus, prevent injuries to their persons. As bottling operators are working with machines which consist of
moving parts, it is imperative that they should not fall asleep as to do so would expose them to hazards and
injuries. In addition, sleeping will hamper the efficient flow of operations as the bottling operators would be
unable to perform their duties competently.
Issue:
Whether or not the removal of the bottling operators chairs was a valid exercise of management
prerogative. ---YES
Ruling:
According to the Union, such removal constitutes a violation of the 1) Occupational Health and Safety
Standards which provide that every worker is entitled to be provided by the employer with appropriate seats,
among others; 2) policy of the State to assure the right of workers to a just and humane condition of work as
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The Court has held that management is free to regulate, according to its own discretion and judgment, all
aspects of employment, including hiring, work assignments, working methods, time, place, and manner of
work, processes to be followed, supervision of workers, working regulations, transfer of employees, work
supervision, lay-off of workers, and discipline, dismissal and recall of workers. The exercise of management
prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights
of labor.10
In the present controversy, it cannot be denied that CCBPI removed the operators chairs pursuant to a
national directive and in line with its "I Operate, I Maintain, I Clean" program, launched to enable the Union
to perform their duties and responsibilities more efficiently. The chairs were not removed indiscriminately.
They were carefully studied with due regard to the welfare of the members of the Union. The removal of the
chairs was compensated by: a) a reduction of the operating hours of the bottling operators from a two-andone-half (2 )-hour rotation period to a one-and-a-half (1 ) hour rotation period; and b) an increase of the
break period from 15 to 30 minutes between rotations.
Apparently, the decision to remove the chairs was done with good intentions as CCBPI wanted to avoid
instances of operators sleeping on the job while in the performance of their duties and responsibilities and
because of the fact that the chairs were not necessary considering that the operators constantly move about
while working. In short, the removal of the chairs was designed to increase work efficiency. Hence, CCBPIs
exercise of its management prerogative was made in good faith without doing any harm to the workers
rights.
The rights of the Union under any labor law were not violated. There is no law that requires employers to
provide chairs for bottling operators. There was no violation either of the Health, Safety and Social Welfare
Benefit provisions under Book IV of the Labor Code of the Philippines. As shown in the foregoing, the removal
of the chairs was compensated by the reduction of the working hours and increase in the rest period. The
directive did not expose the bottling operators to safety and health hazards.
The Union should not complain too much about standing and moving about for one and one-half (1 ) hours
because studies show that sitting in workplaces for a long time is hazardous to ones health. The CBA
between the Union and CCBPI contains no provision whatsoever requiring the management to provide chairs
for the operators in the production/manufacturing line while performing their duties and responsibilities.
The Court completely agrees with the CA ruling that the removal of the chairs did not violate the general
principles of justice and fair play because the bottling operators working time was considerably reduced
from two and a half (2 ) hours to just one and a half (1 ) hours and the break period, when they could sit
down, was increased to 30 minutes between rotations. The bottling operators new work schedule is certainly
advantageous to them because it greatly increases their rest period and significantly decreases their working
time. A break time of thirty (30) minutes after working for only one and a half (1 ) hours is a just and fair
work schedule.
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Such benefits or privileges form part of the employees wage, salary or compensation making them
enforceable obligations.
This Court has already decided several cases regarding the non-diminution rule where the benefits or
privileges involved in those cases mainly concern monetary considerations or privileges with monetary
equivalents. Without a doubt, equating the provision of chairs to the bottling operators is something within
the ambit of "benefits'' in the context of Article 100 of the Labor Code is unduly stretching the coverage of
the law. The interpretations of Article 100 of the Labor Code do not show even with the slightest hint that
such provision of chairs for the bottling operators may be sheltered under its mantle.
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National Wages and Productivity Commission et al., vs The Alliance of Progressive Labor et al.
G.R. No. 150326, March 12, 2014
Facts:
On June 9, 1989, Republic Act No. 6727 was enacted into law. In order to rationalize wages throughout the
Philippines, Republic Act No. 6727 created the NWPC and the RTWPBs of the different regions.
Article 121 of the Labor Code, as amended by Section 3 of Republic Act No. 6727, empowered the NWPC to
formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise,
industry and national levels; to prescribe rules and guidelines for the determination of appropriate minimum
wage and productivity measures at the regional, provincial or industry levels; and to review regional wage
levels set by the RTWPBs to determine whether the levels were in accordance with the prescribed guidelines
and national development plans, among others.
On the other hand, Article 122(b) of the Labor Code, also amended by Section 3 of Republic Act No. 6727,
tasked the RTWPBs to determine and fix minimum wage rates applicable in their region, provinces or
industries therein; and to issue the corresponding wage orders, subject to the guidelines issued by the
NWPC.
Consequently, the RTWPBNCR issued Wage Order No. NCR07 on October 14, 1999 imposing an increase of
P25.50/day on the wages of all private sector workers and employees in the NCR and pegging the minimum
wage rate in the NCR at P223.50/day. 6 However, Section 2 and Section 9 of Wage Order No. NCR07
exempted certain sectors and industries from its coverage
Section 2. The adjustment in this Order does not cover the following:
A. [W]orkers in the following sectors which were granted corresponding wage increases on
January 1, 1999 as prescribed by Wage Order No. NCR06:
a.1. Agriculture workers
Plantation
P12.00
Nonplantation
P18.50
a.2. Cottage/handicraft industry
P16.00
P12.00
P12.00
P19.00
Distressed establishments as defined in the NPWC Guidelines No. 01, series of 1996;
2.
Exporters including indirect exporters with at least 50% export sales and with forward
contracts with their foreign buyers/principals entered into on or twelve (12) months before
the date of publication of this Order may be exempt during the lifetime of said contract but
not to exceed twelve (12) months from the effectivity of this Order.
Feeling aggrieved by their noncoverage by the wage adjustment, the Alliance of Progressive Labor (APL)
and the Tunay na Nagkakaisang Manggagawa sa Royal (TNMR) filed an appeal with the NWPC assailing
Section 2(A) and Section 9(2) of Wage Order No. NCR07. They contended that neither the NWPC nor the
RTWPBNCR had the authority to expand the noncoverage and exemptible categories under the wage order;
hence, the assailed sections of the wage order should be voided.
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Distressed establishments
New business enterprises (NBEs)
Retail/Service establishments employing not more than ten (10) workers
Establishments adversely affected by natural calamities
Under the guidelines, the RTWPBs could issue exemptions from the application of the wage orders as long as
the exemptions complied with the rules of the NWPC. In its rules, the NWPC enumerated four exemptible
establishments, but the list was not exclusive. The RTWPBs had the authority to include in the wage
orders establishments that belonged to, or to exclude from the four enumerated exemptible categories.
If the exemption was outside of the four exemptible categories, like here, the exemptible category should be:
(1) in accord with the rationale for exemption; (2) reviewed/approved by the NWPC; and (3) upon review, the
RTWPB issuing the wage order must submit a strong and justifiable reason or reasons for the inclusion of
such category. It is the compliance with the second requisite that is at issue here.
The NWPC, in arriving at its decision, weighed the arguments of the parties and ruled that the RTWPBNCR
had substantial and justifiable reasons in exempting the sectors and establishments enumerated in Section
2(A) and Section 9(2) based on the public hearings and consultations, meetings, socialeconomic data and
informations gathered prior to the issuance of Wage Order No. NCR07. The very fact that the validity of
the assailed sections of Wage Order No. NCR07 had been already passed upon and upheld by
the NWPC meant that the NWPC had already given the wage order its necessary legal
imprimatur. Accordingly, the requisite approval or review was complied with.
The RTWPBs are the thinking group of men and women guided by statutory standards and bound by the
rules and guidelines prescribed by the NWPC. In the nature of their functions, the RTWPBs investigate and
study all the pertinent facts to ascertain the conditions in their respective regions. Hence, they are logically
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He is one of 25 butchers in Yiels Hog Dealer and David exercised control over him since David: sets
the work day, reporting time and hogs to be chopped as well as how to do the work, paid Macasios
salary and approved and disapproved latters request for leave
That he only has 10 employees and hired Macasio on task basis and therefore not entitled to
overtime pay, holiday, pay and 13th month pay as per the Labor Code IRR.
MAcasio starts his work at 10pm and ends at 2 am and receives a fixed amount of PHP700 per
engagement regardless of the number of hours worked
Macasio disputed Davids allegation contending that he had a Certificate of employment with David
and Macasio reported to work every day. But David denies Macasio was his employee since he hired
him on task basis and the certificate was only given as per request of Macasio for overseas
employment purposes
Labor Arbiter: Ruled that Macasio is hired on task basis and not entitled to overtime, holiday, SIL or 13th
month pay
NLRC: affirmed labor arbiter since Macasio did not observe an 8 hour work schedule and was paid a fixed
amount regardless of result
CA: partly granted Macasios appeal and reversed NLRC and LA since Macasio, even if on task basis, is only
excluded from the benefits if he is a field personnel as per the ruling in Serrano.
Issue:
Whether Macasio is hired on pakyaw basis and not entitled to the coverage of holiday, SIL and 13th month
pay.
Ruling:
Partially granted Davids petition
Macasio is indeed Davids employee even if it be proven that he is hired on a task basis since the latter does
not negate employer-employee relationship. Even as per the presentation of the facts, Macasio is indeed
Davids employee since the 4 elements of an employer-employee relationship is present
Macasio is engaged on task basis since time is not considered in his work, only the results. Also, Macasio is
entitled to SIL and holiday pay since the general rule as per provisions and Serrano, is that an employee on
task basis is entitled to holiday and SIL if he does not fall within the classification of field personal (Article 94
and 95)
Field personnel and other employees whose performance is unsupervised by the employer including those
who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount
for performing work irrespective of the time consumed in the performance thereof
Macasio is NOT entitled to since PD 851 section (e) expressly states that employers of employees hired on
task basis are exempted
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Hon. Secretary of Labor vs. Panay Veterans Security and Investigation Agency,
G.R. No. 167708, August 22, 2008
Facts:
Petitioners Edgardo M. Agapay and Samillano A. Alonso, Jr. were hired by respondent Panay Veterans
Security and Investigation Agency, Inc. as security guards sometime in 1988. They were stationed at the
plant site of Food Industries, Inc. (FII) in Sta. Rosa, Laguna until FII terminated its contract with respondent
security agency on July 6, 2000. They were not given new assignments and their benefits (including 13th
month pay, overtime pay and holiday pay as well as wage differentials due to underpayment of wages) were
withheld by respondent security agency. This prompted them to file a complaint for violation of labor
standards in the regional office of the Department of Labor and Employment in the National Capital Region
(DOLE-NCR).
A labor inspector acted on the complaint, Manuel M. Cayabyab. He conducted an inspection on October 3,
2000. His assessment is that the respondents should comply with the labor standards through payment or
question in it to the DOLE-NCR within 5 days.
Respondents neither paid the claims of petitioners Agapay and Alonso, Jr. nor questioned the labor
employment officers findings. Thus, in his May 10, 2001 order, the Regional Director of the DOLE-NCR
adopted the findings and computation of Cayabyab as to the unpaid benefits due to petitioners Agapay and
Alonso, Jr.
Respondents moved for reconsideration but the DOLE-NCR Regional Director denied it. Undeterred,
respondents filed an appeal (with motion to reduce cash or surety bond) to the Secretary of Labor and
Employment. In his July 9, 2002 order, the Secretary of Labor and Employment found that respondents failed
to perfect their appeal since they did not post a cash or surety bond equivalent to the monetary award. Thus,
the appeal was dismissed and the DOLE-NCR Regional Directors May 10, 2001 order was declared final and
executory. The Secretary of Labor and Employment denied reconsideration.
Respondents elevated the case to the CA, at first the CA dismissed their appeal and upheld the DOLEs
decision. But the CA granted their reconsideration and modified DOLEs decision, Invoking the case of Star
Angel Handicraft v. National Labor Relations Commission.
Thus, the case was appealed by the petitioner in supreme court.
Issue:
Whether or not the CA was right in granting the appeal.
Ruling:
No, the employers motion to reduce the appeal the bond was no in accordance with the art. 128 of Labor
code, the last paragraph of the said provision provides:an order issued by the duly authorized
representative of the Secretary of Labor and Employment under this Article may be appealed to the latter. In
case said order involves a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Secretary of Labor and Employment in the amount equivalent to the monetary award in the
order appealed from
Clearly the respondents did not post bail, when they appealed the case at the DOLE-NCR. The CAs amended
decision also contradicted the spirit that animates all labor laws, the promotion of social justice and the
protection of workers. The posting of a cash or surety bond to perfect an appeal of an order involving a
monetary award has a two-fold purpose: (1) to assure the employee that, if he finally prevails in the case,
the monetary award will be given to him upon dismissal of the employers appeal and (2) to discourage the
employer from using the appeal to delay or evade payment of his obligations to the employee.[17] The CA
disregarded these pro-labor objectives when it treated respondents failure to post the required bond with
undue leniency. The CA should have resolved any doubt in the implementation and interpretation of the
Labor Code and its implementing rules in favor of labor.
Moreover, Star Angel Handicraft permitted the filing of a motion for reduction of the appeal bond because
the Court recognized the NLRCs existing practice at that time to allow the reduction of the appeal bond
upon motion of appellant and on meritorious grounds. In fact, the practice was subsequently
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National Mines and Allied Workers Union vs. Marcopper Mining Corp.,
G.R. No. 174641, Nov. 11, 2008
Facts:
DENR ordered the indefinite suspension of MARCOPPER's operations for causing damage to the environment
of the Province of Marinduque by spilling the company's mine waste or tailings from an old underground
impounding area into the Boac River, in violation of its ECC. NAMAWU was the exclusive bargaining
representative of the rank-and-file workers of MARCOPPER. It filed a complaint with the NLRC against
MARCOPPER for nonpayment of wages, separation pay, damages, and attorney's fees.
NAMAWU claimed that due to the indefinite suspension of MARCOPPER's operations, its members were not
paid the wages due them for six months. It further claimed that its members are also entitled to be paid their
separation pay pursuant to their collective bargaining agreement with MARCOPPER and under existing
implementing rules of the Labor Code. There had been an illegal strike which occurred.
Issue:
Whether or not it is necessary that MARCOPPER file an appeal bond
RULING:
In the context of the NLRC appeal bond that is directly at issue, MARCOPPER had every reason to claim in its
April 10, 2000 appeal to the NLRC that it should be excused from filing an appeal bond with respect to the
NAMAWU members who were no longer company employees. The CA decision decreeing the termination of
employment of those involved in the illegal strike case had already been issued at that time. We
subsequently ruled on the same issue during the time the environmental incident case was pending before
the NLRC.
Thus, when the NLRC dismissed MARCOPPER's appeal for failure to file the requisite appeal bond
corresponding to the 615 NAMAWU members, the termination of employment of these NAMAWU members
was already a settled matter that the NLRC was in no position to disregard. In this light, the CA was correct in
reversing the dismissal of MARCOPPER's appeal for failure to file an appeal bond. Pursued to its logical end,
the CA conclusions should lead to the dismissal of NAMAWU's complaint with respect to its 615 previously
dismissed members.
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Phil Hoteliers Inc., vs National Union of Workers in Hotel Restaurant & Allied Industries
(2009) G.R. 181972
Facts:
Wage Order No. 9, approved by the Regional Tripartite Wages and Productivity Board (RTWPB) of the National
Capital Region (NCR), took effect on 5 November 2001. It grants P30.00 ECOLA to particular employees and
workers of all private sectors, identified as follows in Section 1 thereof:
Section 1. Upon the effectivity of this Wage Order, all private sector workers and employees in the
National Capital Region receiving daily wage rates of TWO HUNDRED FIFTY PESOS (P250.00) up to
TWO HUNDRED NINETY PESOS (P290.00) shall receive an emergency cost of living allowance in the
amount of THIRTY PESOS (P30.00) per day payable in two tranches as follows:
Amount of ECOLA
P15.00
P15.00
Effectivity
5 November 2001
1 February 2002
On 20 March 2002, respondent National Union of Workers in Hotel, Restaurant and Allied Industries-Dusit
Hotel Nikko Chapter (Union), through its President, Reynaldo C. Rasing (Rasing), sent a letter 4 to Director
Alex Maraan (Dir. Maraan) of the Department of Labor and Employment-National Capital Region (DOLE-NCR),
reporting the non-compliance of Dusit Hotel with WO No. 9, while there was an on-going compulsory
arbitration before the National Labor Relations Commission (NLRC) due to a bargaining deadlock between the
Union and Dusit Hotel; and requesting immediate assistance on this matter. On 24 May 2002, Rasing sent
Dir. Maraan another letter following-up his previous request for assistance.
Acting on Rasing's letters, the DOLE-NCR sent Labor Standards Officer Estrellita Natividad (LSO Natividad) to
conduct an inspection of Dusit Hotel premises on 24 April 2002. In the first Inspection, the report showed
that Dusit Hotel is exempt from complying with WO no. 9. Due to the Second request for inspection, DOLE
representative conducted another round of inspection and the Labor Standards Officer noted the following in
her inspection report:
Non-presentation of records/payrolls
Based on submitted payrolls & list of union members by NUWHRAIN-DUSIT HOTEL NIKKO Chapter,
there are one hundred forty-four (144) affected in the implementation of Wage Order No. NCR-09->
ECOLA covering the periods from Nov. 5/01 to present.
Accordingly, the DOLE-NCR issued a Notice of Inspection Result directing Dusit Hotel to effect restitution
and/or correction of the noted violations within five days from receipt of the Notice, and to submit any
question on the findings of the labor inspector within the same period, otherwise, an order of compliance
would be issued. The Notice of Inspection Result was duly received by Dusit Hotel Assistant Personnel
Manager Rogelio Santos.
In the meantime, the NLRC rendered a Decision 9 dated 9 October 2002 in NLRC-NCR-CC No. 000215-02
the compulsory arbitration involving the Collective Bargaining Agreement (CBA) deadlock between Dusit
Hotel and the Union granting the hotel employees the following wage increases, in accord with the CBA:
Effective January 1, 2001 - P500.00/month
Effective January 1, 2002 - P550.00/month
Effective January 1, 2003 - P600.00/month
On 22 October 2002, based on the results of the second inspection of Dusit Hotel premises, DOLE-NCR,
through Dir. Maraan, issued the Order 10 directing Dusit Hotel to pay 144 of its employees the total amount
of P1,218,240.00, corresponding to their unpaid ECOLA under WO No. 9; plus, the penalty of double
indemnity, pursuant to Section 12 of Republic Act No. 6727, 11 as amended by Republic Act No. 8188.
Dusit Hotel filed a Motion for Reconsideration 13 of the DOLE-NCR Order dated 22 October 2002, arguing
that the NLRC Decision dated 9 October 2002, resolving the bargaining deadlock between Dusit Hotel and
the Union, and awarding salary increases under the CBA to hotel employees retroactive to 1 January 2001,
already rendered the DOLE-NCR Order moot and academic. With the increase in the salaries of the hotel
employees ordered by the NLRC Decision of 9 October 2002, along with the hotel employees' share in the
service charges, the 144 hotel employees, covered by the DOLE-NCR Order of 22 October 2002, would
already be receiving salaries beyond the coverage of WO No.
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Facts:
The petitioner engaged the services of Lancer to provide reliever services to its business, which involves the
manufacture and sale of commercial and industrial corrugated boxes. According to petitioner, the
respondents were engaged for four (4) months from February to June 1998 and their tasks included loading,
unloading and segregation of corrugated boxes.
Thereafter, respondents filed complaint against the petitioner and President, Cesar Luz (Luz), for
underpayment of wages, non-payment of premium pay for worked rest, overtime pay and non-payment of
salary. Upon receipt Department of Labor and Employment (DOLE) conducted an inspection of the
petitioners premises and found several violations, to wit:
Due to the petitioners failure to appear in the summary investigations conducted by the DOLE, an Order was
issued on June 18, 2003 finding in favor of the respondents and adopting the computation of the claims
submitted. Petitioner and Luz were ordered, among others, to pay respondents their total claims in the
amount of Eight Hundred Forty Thousand Four Hundred Sixty-Three Pesos and 38/100 (P 840,463.38).
Petitioner filed a motion for reconsideration on the ground that respondents are not its employees but of
Lancer and that they pay Lancer in lump sum for the services rendered. The DOLE, however, denied its
motion because petitioner failed to support its claim that the respondents are not its employees, and even
assuming that they were employed by Lancer, the petitioner still cannot escape liability as Section 13 of the
Department Order No. 10, Series of 1997, makes a principal jointly and severally liable with the contractor to
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Their appeal to the Secretary of DOLE was dismissed thus, l petitioner and Luz filed a petition
for certiorari with the Court of Appeals (CA).
On November 17, 2006, the CA affirmed the Secretary of DOLEs orders, with the modification in that Luz was
absolved of any personal liability under the award.
Hence, this petition for review under Rule 45 of the Rules of Court.
Issue:
Whether or not DOLE has authority to determine the existence of an employer-employee relationship?
Whether Superior Packaging Corporation may be held solidarily liable with Lancer Staffing & Services
Network, Inc. (Lancer) for respondents unpaid money claims?
Ruling:
The DOLE clearly acted within its authority when it determined the existence of an employer-employee
relationship between the petitioner and respondents as it falls within the purview of its visitorial and
enforcement power under Article 128(b) of the Labor Code. The determination of the existence of an
employer-employee relationship by the DOLE must be respected.
With regard to the contention that there is no evidence to support the finding that the respondents rendered
overtime work and that they worked on their rest day, the resolution of this argument requires a review of
the factual findings and the evidence presented, Court said that it is not a trier of facts and it applies with
greater force in labor cases. Hence, where the factual findings of the labor tribunals or agencies conform to,
and are affirmed by, the CA, the same are accorded respect and finality, and are binding to Supreme Court.
It was the consistent conclusion of the DOLE and the CA that Lancer was not an independent contractor but
was engaged in "labor-only contracting"; hence, the petitioner was considered an indirect employer of
respondents and liable to the latter for their unpaid money claims.
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At the time of the respondents employment in 1998, the applicable regulation was DOLE Department Order
No. 10, Series of 1997. Under said Department Order, labor-only contracting was defined as follows:
Sec. 9. Labor-only contracting. (a) Any person who undertakes to supply workers to an employer shall be
deemed to be engaged in labor-only contracting where such person:
(1) Does not have substantial capital or investment in the form of tools, equipment, machineries,
work premises and other materials; and
(2) The workers recruited and placed by such persons are performing activities which are directly
related to the principal business or operations of the employer in which workers are habitually
employed.
Labor-only contracting is prohibited and the person acting as contractor shall be considered merely as an
agent or intermediary of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
According to the CA, the totality of the facts and surrounding circumstances of this case point to such
conclusion that Lancer was, indeed, a labor-only contractor. Aside from these is the undisputed fact that the
petitioner failed to produce any written service contract that might serve as proof of its alleged agreement
with Lancer.
Finally, a finding that a contractor is a "labor-only" contractor is equivalent to declaring that there is an
employer-employee relationship between the principal and the employees of the supposed contractor, and
the "labor only" contractor is considered as a mere agent of the principal, the real employer. The former
becomes solidarily liable for all the rightful claims of the employees.
Petitioner therefore, being the principal employer and Lancer, being the labor-only contractor, are solidarily
liable for respondents unpaid money claims.
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Facts:
Petitioner Honda and Respondent union forged a Collective Bargaining Agreement which averred that Honda
shall maintain the present practice in the implementation of the 13 th and 14th month pay. Such CBA is
effective until 2000. In the later part of 1998, the parties started re-negotiations.
However, when the talk between the parties did not go well, respondent union filed a Notice to Strike on the
ground of bargaining deadlock. Honda then filed a notice of Lockout in which the DOLE ordered the party to
cease and desist from committing acts.
The union filed a second Notice of Strike on ground of unfair labor, in which they went into pocketing of the
premises of Honda. DOLE then assumed jurisdiction and subjected the issue to the NLRC for compulsory
arbitration for which the employees were ordered to return to work.
The management of Honda, on 22 Nov. 1999, then issued a memorandum announcing its new computation
of the 13th and 14th month pay to be granted to employees whereby the 31-day strike shall be considered
unworked days for purposes of computing said benefits.
Thus, the union opposed the pro-rated computation of the bonuses and the matter was brought before the
Grievance Machinery. The Labor Arbiter ordered Honda to compute each provision in full month basic pay. Ca
affirmed the decision of the labor arbiter.
Issue:
Whether or not the pro-rated computation of the 13 th month pay and the other bonuses in question is valid
and lawful
Ruling:
Such pro-rated computation is invalid.
It is well noted that the CBA refers to the negotiated contract between a legitimate labor organization and
the employer. It is the law between the parties and compliance therewith is mandated by express policy of
the law.
Honda did not adduce evidence to show that the 13 th month, 14th month and financial assistance benefits
were previously subject to pro-rating. Thus, such was an implicit acceptance that prior to the strike, a full
month basic pay computation was the present practice intended to be maintained in the CBA.
Lastly, to allow pro-ration of the 13 th month pay is to undermine the wisdom behind the law and the mandate
that the workingmans welfare should be the primordial and paramount consideration. DENIED.
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Manila Jockeys Club Employees Labor Union vs. Manila Jockey Club
G.R. No. 167601, March 7, 2007
Facts:
Manila Jockey Club, Inc., a corporation with a legislative franchise to conduct, operate and maintain horse
races, entered into a Collective Bargaining Agreement (CBA) with Manila Jockey Club Employees Labor UnionPTGWO. Under Section 1 Article IV of their CBA, the parties agreed to a 7-hour work schedule from 9:00 a.m.
to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday. All work performed in
excess of seven (7) hours work schedule and on days not included within the work week shall be considered
overtime and paid as such with exception to those monthly compensation which includes work performed
during Saturday, Sunday, and Holiday when races are held at the Club. The CBA likewise reserved in
management prerogatives including the determination of the work schedule. An inter-office memorandum
was later issued declaring that the hours of work of regular monthly-paid employees shall be from 1:00 p.m.
to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The memorandum, however,
sustained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.
Before the voluntary arbitrators of the National Conciliation and Mediation Board, petitioners questioned the
memorandum as violative of the prohibition against non-diminution of wages and benefits guaranteed the
CBA which specified the work schedule of respondent's employees to be from 9:00 a.m. to 5:00 p.m. They
claimed that as a result of the memorandum, the employees are precluded from rendering their usual
overtime work from 5:00 p.m. to 9:00 p.m.
Issue:
Whether or not the change in the work schedule violated Article 100 of the Labor Code on the non-diminution
of wages and benefits guaranteed under the parties CBA.
Ruling:
No. It was evident that the change in work schedule was justified, it being a management prerogative.
Respondent, as employer, cited the change in the program of horse races as reason for the adjustment of the
employees work schedule. It rationalized that when the CBA was signed, the horse races started at 10:00
a.m. When the races were moved to 2:00 p.m., there was no other choice for management but to change the
employees' work schedule as there was no work to be done in the morning. It is true that Section 1, Article IV
of the CBA provides for a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00
p.m. from Mondays to Saturdays. However, Section 2, Article XI expressly reserves on respondent the
prerogative to change existing methods or facilities to change the schedules of work.
Moreover, Manila Jockey Club was not obliged to allow all its employees to render overtime work every day
for the whole year, but only those employees whose services were needed after their regular working hours
and only upon the instructions of management. The overtime pay was not given to each employee
consistently, deliberately and unconditionally, but as a compensation for additional services rendered. Thus,
overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code on prohibition
against elimination or diminution of benefits.
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Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU
G.R. No. 170734, May 14, 2008, citing Davao Fruits vs. Asso. Labor Union, 225 SCRA 562 and Sevilla Trading
vs. AVA Tomas Services, G.R. No. 152456, April 28, 2004
Facts:
Petitioner is a company engaged in the manufacture of metal products, whereas respondent is the labor
union of petitioner's rank and file employees. Sometime in December 2003, petitioner paid the 13th month
pay, bonus, and leave encashment of three union members in amounts proportional to the service they
actually rendered in a year, which is less than a full twelve (12) months. Respondent protested the prorated
scheme, claiming that on several occasions petitioner did not prorate the payment of the same benefits to
seven (7) employees who had not served for the full 12 months. According to respondent, the prorated
payment violates the rule against diminution of benefits under Article 100 of the Labor Code. Thus, they filed
a complaint before the National Conciliation and Mediation Board (NCMB). The parties submitted the case for
voluntary arbitration.
The voluntary arbitrator, Apron M. Mangabat, ruled in favor of petitioner and found that the giving of the
contested benefits in full, irrespective of the actual service rendered within one year has not ripened into a
practice. He also interpreted the phrase "for each year of service" found in the pertinent CBA provisions to
mean that an employee must have rendered one year of service in order to be entitled to the full benefits
provided in the CBA.
Respondent filed a Petition for Review before the Court of Appeals. The appellate court found that petitioner
had an existing voluntary practice of paying the aforesaid benefits in full to its employees; thereby rejecting
the claim that petitioner erred in paying full benefits to its seven employees. The appellate court noted that
aside from the affidavit of petitioner's officer, it has not presented any evidence in support of its position that
it has no voluntary practice of granting the contested benefits in full and without regard to the service
actually rendered within the year.
Issues:
1.
2.
Whether or not the petitioners should grant 13th month pay, bonus and leave encashment in full
regardless of actual service rendered.
Whether or not the prorated payment of the said benefits constitutes diminution of benefits under
Article 100 of the Labor Code.
Ruling:
On the first issue, according to petitioner, there is a one-year cutoff in the entitlement to the benefits
provided in the CBA, which is evident from the wording of its pertinent provisions as well as of the existing
law. There is no doubt that in order to be entitled to the full monetization of sixteen (16) days of vacation and
sick leave, one must have rendered at least one year of service. The clear wording of the provisions does not
allow any other interpretation. Anent the 13th month pay and bonus, the CBA provisions did not give any
meaning different from that given by the law, thus it should be computed at 1/12 of the total compensation,
which an employee receives for the whole calendar year. The bonus is also equivalent to the amount of the
13th month pay given, or in proportion to the actual service rendered by an employee within the year.
On the second issue, it is a settled rule that any benefit and supplement being enjoyed by employees cannot
be reduced, diminished, discontinued or eliminated by the employer. The principle of non-diminution of
benefits is founded on the Constitutional mandate to "protect the rights of workers and promote their
welfare," and "to afford labor full protection." Said mandate in turn is the basis of Article 4 of the Labor Code
which states that "all doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations shall be rendered in favor of labor."
In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely, voluntarily
and consistently granting full benefits to its employees regardless of the length of service rendered.
Petitioner claims that its full payment of benefits regardless of the length of service to the company does not
constitute voluntary employer practice. It points out that the payments had been erroneously made and they
occurred in isolated cases in the years 1992, 1993, 1994, 1999, 2002 and 2003. According to petitioner, it
was only in 2003 that the accounting department discovered the error. Petitioner further argues that for a
grant of a benefit to be considered a practice, it should have been practiced over a long period of time and
must be shown to be consistent, deliberate and intentional, which is not what happened in this case.
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Genesis Transport Service Inc et al., vs. Unyon ng Malayang Manggagawa ng Genesis Transport
et al.
GR No. 182114, April 5, 2010
Facts:
Respondent Juan Taroy was hired by petitioner Genesis Transport as driver on commission basis at 9% of the
gross revenue per trip. He, after due notice and hearing, terminated from employment after an accident on
April 20, 2002 where he was deemed to have been driving recklessly. He then filed a complaint for illegal
dismissal and payment of service incentive leave pay, claiming that he was singled out for termination
because of his union activities, other drivers who had met accidents not having been dismissed from
employment. He later amended his complaint to implead his co-respondent union and add as grounds unfair
labor practice and reimbursement of illegal deductions on tollgate fees, and payment of service incentive
leave pay.
Upon appeal, with respect to Taroys claim for refund, the Labor Arbiter ruled in his favor for if, as contended
by Genesis Transport, tollgate fees form part of overhead expense, why were not expenses for fuel and
maintenance also charged to overhead expense. The Labor Arbiter thus concluded that it would appear that
the tollgate fees are deducted from the gross revenues and not from the salaries of drivers and conductors,
but certainly the deduction thereof diminishes the take home pay of the employees.
Issue:
Whether the tollgate fee deductions which resulted to an underpayment given to Taroy is illegal?
Ruling:
The deduction is considered illegal.
The amounts representing tollgate fees were deducted from gross revenues and not directly from Taroys
commissions, the labor tribunal and the appellate court correctly held that the withholding of those amounts
reduced the amount from which Taroys 9% commission would be computed. Such a computation not only
marks a change in the method of payment of wages, resulting in a diminution of Taroys wages in violation of
Article 113 vis--vis Article 100 of the Labor Code, as amended. It need not be underlined that without
Taroys written consent or authorization, the deduction is considered illegal.
Besides, the invocation of the rule on company practice is generally used with respect to the grant of
additional benefits to employees, not on issues involving diminution of benefits.
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Whether or not Nia Jewelry Manufacturing of Metal Arts, Inc. may impose the policy for their
goldsmiths requiring them to post cash bonds or deposits; and
Whether or not there is constructive dismissal.
Ruling:
1) NO, the Nia Jewelry may not impose the policy. Articles 113 and 114 of the Labor Code are clear as to
what are the exceptions to the general prohibition against requiring deposits and effecting deductions from
the employees' salaries.
ART. 113. Wage Deduction No employer, in his own behalf or in behalf of any person, shall make
any deduction from the wages of his employees, except:
a)
b)
c)
In cases where the worker is insured with his consent by the employer, and the deduction is
to recompense the employer for the amount paid by him as premium on the insurance;
For union dues, in cases where the right of the worker or his union to check-off has been
recognized by the employer or authorized in writing by the individual worker concerned; and
In cases where the employer is authorized by law or regulations issued by the Secretary of
Labor.
Article 114.Deposits for loss or damage No employer shall require his worker to make deposits
from which deductions shall be made for the reimbursement of loss of or damage to tools, materials,
or equipment supplied by the employer, except when the employer is engaged in such trades,
occupations or business where the practice of making deposits is a recognized one, or is necessary
or desirable as determined by the Secretary of Labor in appropriate rules and regulations.
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The petitioners should first establish that the making of deductions from the salaries is authorized by law, or
regulations issued by the Secretary of Labor. The petitioners failed to prove that their imposition of the new
policy upon the goldsmiths under Nia Jewelry's employ falls under the exceptions specified in Articles 113
and 114 of the Labor Code.
2) There is NO constructive dismissal. Constructive dismissal occurs when there is cessation of work because
continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee. The petitioners did not whimsically or arbitrarily impose the policy to post cash
bonds or make deductions from the workers' salaries. As attested to by the respondents' fellow goldsmiths in
their Joint Affidavit, the workers were convened and informed of the reason behind the implementation of the
new policy. Instead of airing their concerns, the respondents just promptly stopped reporting for work.
Locsin II vs. Mekeni Food Corp.
GR No. 192105, December 9, 2013
Facts:
Petitioner Antonio Locsin II was the Regional Sales Manager of respondent Mekeni Food Corporation. He was
hired on February 2004 to oversee the NCR and Luzon operation. In addition to his compensation and benefit
package, a car was offered to him under which one-half of the cost of the vehicle is to be paid by the
company and the other half to be deducted from petitioner's salary. The car valued at 280,000 which Locsin
paid through salary deductions of 5,000 per month.
On February 2006, Locsin resigned. A total of 112,500.00 had already been deducted from his monthly salary
and applied as part of his share in the car plan. Upon resignation, petitioner made personal and written
follow-ups regarding his unpaid salaries, commissions, benefits, and offer to purchase his service vehicle.
Mekeni replied that the company car plan benefit applied only to employees who have been with the
company for five years; for this reason, the balance that petitioner should pay on his service vehicle stood at
P116,380.00 if he opts to purchase the same.
On May 3, 2007, petitioner filed against Mekeni and/or its President, Prudencio S. Garcia, a Complaint for the
recovery of monetary claims consisting of unpaid salaries, commissions, sick/vacation leave benefits, and
recovery of monthly salary deductions which were earmarked for his cost-sharing in the car plan.
Issue:
Whether or not petitioner is entitled to a refund of all the amounts applied to the cost of the service vehicle
under the car plan.
Ruling:
Any benefit or privilege enjoyed by petitioner from using the service vehicle was merely incidental and
insignificant, because for the most part the vehicle was under Mekeni's control and supervision. Free and
complete disposal is given to the petitioner only after the vehicle's cost is covered or paid in full. Until then,
the vehicle remains at the beck and call of Mekeni. Given the vast territory petitioner had to cover to be able
to perform his work effectively and generate business for his employer, the service vehicle was an absolute
necessity, or else Mekeni's business would suffer adversely. Thus, it is clear that while petitioner was paying
for half of the vehicle's value, Mekeni was reaping the full benefits from the use thereof.
Under Article 22 of the Civil Code, every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter without just or legal
ground, shall return the same to him." Article 2142 of the same Code likewise clarifies that there are certain
lawful, voluntary and unilateral acts which give rise to the juridical relation of quasi-contract, to the end that
no one shall be unjustly enriched or benefited at the expense of another. In the absence of specific terms
and conditions governing the car plan arrangement between the petitioner and Mekeni, a quasi-contractual
relation was created between them. Consequently, Mekeni may not enrich itself by charging petitioner for
the use of its vehicle which is otherwise absolutely necessary to the full and effective promotion of its
business. It may not, under the claim that petitioner's payments constitute rents for the use of the company
vehicle, refuse to refund what petitioner had paid, for the reasons that the car plan did not carry such a
condition; the subject vehicle is an old car that is substantially, if not fully, depreciated; the car plan
arrangement benefited Mekeni for the most part; and any personal benefit obtained by petitioner from using
the vehicle was merely incidental.
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Conversely, petitioner cannot recover the monetary value of Mekeni's counterpart contribution to the cost of
the vehicle; that is not property or money that belongs to him, nor was it intended to be given to him in lieu
of the car plan. Mekeni's share of the vehicle's cost was not part of petitioner's compensation package. The
vehicle is an asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by failing to refund
petitioner's payments, so should petitioner not be awarded the value of Mekeni's counterpart contribution to
the car plan, as this would unjustly enrich him at Mekeni's expense.
Thus, Mekeni Food Corporation should refund petitioner Antonio Locsin II's payments under the car plan
agreement amounting only to the extent of the contribution Locsin made, totalling to the amount of
P112,500.00.
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Ruling:
ULP were committed by petitioners against respondents.
Petitioners are being accused of violations of paragraphs (a), (c), and (e) of Article 257 (formerly Article 248)
of the Labor Code,13 to wit:
Article 257. Unfair labor practices of employers.It shall be unlawful for an employer to commit any
of the following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
xxxx
(c) To contract out services or functions being performed by union members when such will interfere
with, restrain, or coerce employees in the exercise of their right to self-organization;
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment
in order to encourage or discourage membership in any labor organization. x x x
The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its employees, to the
exclusion of union members, before the scheduled certification election; 2) the active campaign by the sales
officer of petitioners against the union prevailing as a bargaining agent during the field trip; 3) escorting its
employees after the field trip to the polling center; 4) the continuous hiring of subcontractors performing
respondents functions; 5) assigning union members to the Cabangan site to work as grass cutters; and 6)
the enforcement of work on a rotational basis for union members, taken together, reasonably support an
inference that, indeed, such were all orchestrated to restrict respondents free exercise of their right to selforganization.
The Court is of the considered view those petitioners undisputed actions prior and immediately before the
scheduled certification election, while seemingly innocuous, unduly meddled in the affairs of its employees in
selecting their exclusive bargaining representative.
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Bluer Than Blue Joint Ventures Co., vs. Esteban, GR No. 192582, April 7, 2014,
Citing 2011 Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo
Facts:
The respondent was employed as a sales clerk and assigned at the petitioners boutique. Her primary tasks
were attending to all customer needs, ensuring efficient inventory, coordinating orders from clients,
cashiering and reporting to the accounting department. The petitioner learned that some of their employees
had access to their POS system with the use of a universal password given to them by a certain Elmer Flores,
who in turn learned of the password from the respondent. The petitioner then conducted an investigation and
asked the petitioner to explain why she should not be disciplinarily dealt with. During the investigation the
respondent was placed under preventive suspension.
After investigation the petitioner terminated the respondent on the grounds of loss of trust or confidence.
This respondent was given her final wage and benefits less the inventory variance incurred by the store. This
urged the respondent to file a complaint for illegal dismissal, illegal suspension, holiday pay, rest day and
separation pay. The labor arbiter ruled in her favour awarding her backwages. The petitioner appealed the
decision in the NLRC and the decision was reversed. However, upon the respondents petition for certiorari in
the court of appeals the decision was reinstated. Hence, this petition.
Issue:
Whether the negative sales variance could be validly deducted from the respondents wage?
Ruling:
No, it cannot be deducted in this case.
Article 113 of the Labor Code provides that no employer, in his own behalf or in behalf of any person, shall
make any deduction from the wages of his employees, except in cases where the employer is authorized by
law or regulations issued by the Secretary of Labor and Employment, among others. The Omnibus Rules
Implementing the Labor Code, meanwhile, provides:
SECTION 14. Deduction for loss or damage. Where the employer is engaged in a trade, occupation
or business where the practice of making deductions or requiring deposits is recognized to answer
for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer
to the employee, the employer may make wage deductions or require the employees to make
deposits from which deductions shall be made, subject to the following conditions:
a)
b)
c)
d)
That the employee concerned is clearly shown to be responsible for the loss or damage;
That the employee is given reasonable opportunity to show cause why deduction should not
be made;
That the amount of such deduction is fair and reasonable and shall not exceed the actual
loss or damage; and
That the deduction from the wages of the employee does not exceed 20 percent of the
employee's wages in a week.
In this case, the petitioner failed to sufficiently establish that Esteban was responsible for the negative
variance it had in its sales for the year 2005 to 2006 and that Esteban was given the opportunity to show
cause the deduction from her last salary should not be made.
Furthermore, the court ruled, in Nina Jewelry Marketing of Metal Arts, Inc. v. Montecillo, that:
[T]he petitioners should first establish that the making of deductions from the salaries is authorized
by law, or regulations issued by the Secretary of Labor. Further, the posting of cash bonds should be
proven as a recognized practice in the jewelry manufacturing business, or alternatively, the
petitioners should seek for the determination by the Secretary of Labor through the issuance of
appropriate rules and regulations that the policy the former seeks to implement is necessary or
desirable in the conduct of business. The petitioners failed in this respect. It bears stressing that
without proofs that requiring deposits and effecting deductions are recognized practices, or without
securing the Secretary of Labor's determination of the necessity or desirability of the same, the
imposition of new policies relative to deductions and deposits can be made subject to abuse by the
employers. This is not what the law intends.
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PAYMENT OF WAGES
Congson vs. NLRC
G.R. No. 114250; April 5, 1995
Facts:
Dominico C. Congson is the registered owner of Southern Fishing Industry. Respondents were hired as piecerate employees uniformly paid at a rate of P1.00 per tuna weighing thirty (30) to eighty (80) kilos per
movement. They work for 7 days a week. Due to alleged scarcity of tuna, Congson notified his proposal to
reduce the rate-per-tuna movement. When they reported the following day, they found out that they were
already replaced with new set of workers. They wanted to have a dialogue with the management, but they
waited in vain. Thus, they filed a case before NLRC for underpayment of wages (violation of the minimum
wage law) and non-payment of overtime pay, 13th month pay, holiday pay, rest day pay, and five (5)-day
service incentive leave pay; and for constructive dismissal.
Petitioner conceded that his payment of wages falls below the minimum wage law. He averred that NLRC
should have considered as forming a substantial part of private respondents' total wages the cash value of
the tuna liver and intestines private respondents were entitled to retrieve. He argued that the combined
value of the cash wage and monetary value of the tuna liver and intestines clearly exceeded the minimum
wage fixed by law.
Both the Labor Arbiter and the NLRC ruled in favor of the respondents.
Issue:
Whether or not the form of payment by Congson is valid pursuant to Article 102 of the Labor Code.
Ruling:
Petitioner's practice of paying the private respondents the minimum wage by means of legal tender
combined with tuna liver and intestines runs counter to the above cited provision of the Labor Code. The fact
that said method of paying the minimum wage was not only agreed upon by both parties in the employment
agreement but even expressly requested by private respondents, does not shield petitioner. Article 102 of
the Labor Code is clear. Wages shall be paid only by means of legal tender. The only instance when an
employer is permitted to pay wages informs other than legal tender, that is, by checks or money order, is
when the circumstances prescribed in the second paragraph of Article 102 are present.
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CONDITIONS OF EMPLOYMENT
San Juan De Dios Hospital vs. NLRC
282 SCRA 316 [1997]
Facts:
Petitioners, the rank-and-file employee-union officers and members of San Juan De Dios Hospital Employees
Association, sent a letter requesting for the expeditious implementation and payment by respondent, San
Juan De Dios Hospital, of the '40-hours/5-day workweek' with compensable weekly two (2) days off provided
for by Policy Instruction No. 54 issued by the Secretary of Labor. Said policy instruction purports to
implement R.A. No. 5901, otherwise known as An Act Prescribing Forty Hours A Week of Labor For
Government and Private Hospitals Or Clinic Personnel. Respondent hospital failed to give a favorable
response; thus, petitioners filed a complaint regarding their claims for statutory benefits under the abovecited law and policy issuance. However, the Labor Arbiter and, subsequently, NLRC dismissed the complaint.
Hence, this petition ascribing grave abuse of discretion on the part of NLRC in concluding that Policy
Instructions No. 54 proceeds from a wrong interpretation of R.A. 5901 and Article 83 of the Labor Code.
Issue:
Whether or not Policy Instruction No. 54, entitling a full weekly wage of 7 days upon completion of 40-hour/5day workweek, is valid based on existing labor laws.
Ruling:
Policy Instruction No. 54 is void, it being inconsistent with and repugnant to the provision of Article 83 of the
Labor Code, as well as to R.A. No. 5901.
A perusal of R. A. No. 5901 reveals nothing therein that gives two days off with pay for health personnel who
complete a 40-hour work or 5-day workweek. In fact, the Explanatory Note of House Bill No. 16630 (later
passed into law as Republic Act No. 5901) explicitly states that the bill's sole purpose is to shorten the
working hours of health personnel and not to dole out a two days off with pay. Petitioners' position is also
negated by the very rules and regulations promulgated by the Bureau of Labor Standards which implement
Republic Act No. 5901. Section 15 of aforementioned implementing rules grants specific rate of additional
compensation for work performed on Sunday or for work performed in excess of forty hours a week. Policy
Instruction No. 54 unduly extended the statute.
Article 83 merely provides: (1) the regular office hour of eight hours a day, five days per week for health
personnel, and (2) where the exigencies of service require that health personnel work for six days or fortyeight hours then such health personnel shall be entitled to an additional compensation of at least thirty
percent of their regular wage for work on the sixth day. There is nothing in the law that supports then
Secretary of Labor and petitioners assertion. The Secretary of Labor exceeded his authority by including a
two days off with pay in contravention of the clear mandate of the statute. Administrative interpretation of
the law is at best merely advisory, and the Court will not hesitate to strike down an administrative
interpretation that deviates from the provision of the statute.
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Ruling:
1.
In his original complaint, petitioner stated that the nature of his work is "supervisory-engineering." Similarly,
in his own petition and in other pleadings submitted to this Court, petitioner confirmed that his job was to
supervise the laborers in the construction project. Hence, although petitioner cannot strictly be classified as
a managerial employee under Art. 82 of the Labor Code, and sec. 2(b), Rule I, Book III of the Omnibus Rules
Implementing the Labor Code, nonetheless he is still not entitled to payment of the aforestated benefits
because he falls squarely under another exempt category"officers or members of a managerial staff" as
defined under sec. 2(c) of the abovementioned implementing rules.
That petitioner was paid overtime benefits does not automatically and necessarily denote that petitioner is
entitled to such benefits. Art. 82 of the Labor Code specifically delineates who are entitled to the overtime
premiums and service incentive leave pay provided under Art. 87, 93, 94 and 95 of the Labor Code and the
exemptions thereto. As previously determined, petitioner falls under the exemptions and therefore has no
legal claim to the said benefits. It is well and good that petitioner was compensated for his overtime
services. However, this does not translate into a right on the part of petitioner to demand additional payment
when, under the law, petitioner is clearly exempted therefrom.
2.
NO, HE IS NOT.
The applicable provision is Article 280 of the Labor Code which defines the term "project employee," thus:
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(4)
The primary duty consists of the performance of work directly related to management policies of
the employer;
Customarily and regularly exercise discretion and independent judgment;
Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of
the management of the establishment in which he is employed or subdivision thereof; or (ii)
execute under general supervision work along specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute under general supervision special assignments
and tasks; and
Who do not devote more than 20 percent of their hours worked in a workweek to activities which
are not directly and closely related to the performance of the work described in paragraphs (1), (2),
and (3) above."
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