LABOR

STANDARDS
SUBMITTED BY
MICHEL LOUISE BAJOGUTIERREZ

Manila Terminal Company, Inc., vs. The Court of Industrial Relations and
Manila Terminal Relief and Mutual Aid Association. 91 Pil 625. July 16,
1952.
FACTS OF THE CASE:
The Manila Terminal Company, Inc. herein referred as the petitioner, undertook the
arrastre service in some of the piers in Manila's Port Area at the request and under the
control of the United States Army. Thirty men were jired as watchmen on twelve-hour
shifts at a compensation of P3 per day for the day shift and P6 per day for the night
shift. After a few months, their salaries having been raised to P4 per day for the day
shift and P6.25 per day for the nightshift. Private respondents sent a letter to the
Department of Labor, requesting that the matter of overtime pay be investigated, but
nothing was done by the Department. Later on, the petitioner instituted the system of
strict eight-hour shifts.
The Association filed an amended petition with the Court of Industrial Relations
praying, among others, that the petitioner be ordered to pay its watchmen or police
force overtime pay from the commencement of their employment. Customs
Administrative Order No. 81 and Executive Order No. 228 of the President of the
Philippines was issued, stipulating that the entire police force of the petitioner will be
consolidated with the Manila Harvor Police of the Customs Patrol Service, a
Government agency under the exclusive control of the Commissioner of Customs and
the Secretary of Finance The Manila Terminal Relief and Mutual Aid Association will
hereafter be referred to as the Association.
Judge Yanson of the CIR ordered that the demands of the Association be dismissed
and the petitioner to pay the police force with its regular or base pay and other
additional compensation. With regards to the overtime service pay, said Court has no
jurisdiction since it affects the Bureau of Customs, an instrumentality of the State
which cannot be sued without the consent of the latter.Motions for Reconsideration by
the Petitioner and Private Respondent were filed but both were denied.
With respect to overtime compensation, Judge Lanting ruled that payments
for Sundays and legal holidays be made, that private respondents be paid at a
regular rate and the watchmen are not entitled to night differential pay for past
services.
ISSUE:
1. Whether or not the CIR has no jurisdiction to render a money judgment
involving the obligation in arrears.
2. Whether or not the agreement under which its police force were paid
certain specific wages for twelve-hour shifts, included overtime compensation.
3. Whether or not the Association is barred from recovery by estoppel and laches.

4. Whether or not the the nullity or invalidity of the employment contract

precludes any recovery by the Association.
5. Whether or not Commonwealth Act No. 4444 does not authorize recovery of
back overtime pay.

RULING:.

1. No. The CIR acquired jurisdiction over the matter. The contention that the Court of
Industrial Relations has no jurisdiction to award a money judgment was already
overruled by this Court in G.R. No. L-4337, Detective & protective Bureau, Inc. vs.
Court of Industrial Relations and United Employees Welfare Association, 90 Phil.,
665, in this wise: "It is also argued that the respondent court has no jurisdiction to
award overtime pay, which is money judgment. We believe that under Commonwealth
Act No. 103 the Court is empowered to make the order for the purpose of settling
disputes between the employer and employee.
2. No. The Contract did not include overtime compensation. Nevertheless, with
the case of Detective & Protective Bureau, Inc. vs. Court of Industrial Relations
and United Employees Welfare Association, supra, it has been held that the law
gives the employees the right to compensation. The Association cannot be said to
have impliedly waived the right to overtime compensation, for the obvious reason
that they could not have expressly waived it.

3. No. The Association cannot be barred from recovery by estoppel and laches.

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

4. No. The argument that the nullity or invalidity of the employment contract

precludes recovery by the Association of any overtime pay is also untenable. The
argument, based on the supposition that the parties are in pari delicto, was in
effect turned down in Gotamo Lumber Co. vs. Court of Industrial Relations,* 47 Off.
Gaz., 3421, wherein we ruled: "The petitioner maintains that as the overtime work
had been performed without a permit from the Department of Labor, no extra
compensation should be authorized. Several decisions of this court are involved.
But those decisions were based on the reasoning that as both the laborer and
employer were duty bound to secure the permit from the Department of Labor,
both were in pari delicto. However the present law in effect imposed that duty
upon the employer (C.A. No. 444). Such employer may not therefore be heard to
plead his own neglect as exemption or defense.
Based on the Fair Labor Standards of the United States which provides that any
employer who violates the provisions of Section 206 and 207 of the said Title shall
be liable to the employee or employees affected in the amount of their unpaid
minimum wages or their unpaid overtime compensation as the case may be--
provision not incorporated in the Commonwealth Acct No. 444, our Eight Hour
Labor Law. We cannot agree to the proposition, because sections 3 and 5 of
Commonwealth Act 444 expressly provides for the payment of extra
compensation in cases where overtime services are required, with the result that
the employees or laborers are entitled to collect such extra compensation for past
overtime work. To hold otherwise would be to allow an employer to violate the law
by simply, as in this case, failing to provide for and pay overtime compensation.

Asia Pacific Chartering (Phil.), Inc., vs. Maria Linda R. Faloran. 393 SCRA 454.
December 4, 2002.
FACTS OF THE CASE:

Petitioner Asia Pacific Chartering (Phils) Inc. was, until 1996, the general sales
agent (GSA) of the Scandinavian Airline System (SAS), an off-line international
airline company with license to do business in the Philippines. As GSA, petitioner
sold passenger and cargo spaces for airlines operated by SAS.
Respondent Maria Linda R. Farolan was on December 16, 1992 hired as Sales
Manager of petitioner for its passenger and cargo GSA operations for SAS. Leslie
Murray, the then Sales Manager of petitioner, talked to respondent into accepting the
position after verbally briefing her on the nature of the position. Soon after, the
Respondent participated in a number of meetings and seminars, all geared towards
improving her marketing and sales skills. Pon instruction of Bondoc, she made a
report about SAS, which showed that there was a deliberate drop in the sales revenue
of the company. Bob Zozobrado, a high ranking officer was then asked to investigate
on the matter. Thereafter, Zozobrado informally took over some of the responsibilities
of the respondent without retaining her position and deducting her salary. Petitioner
claimed that respondent did not adopt any sales strategy to aid the sales revenue of

SAS. Jespersen, the General Manager of SAS in another country assessed and was
convinced that the respondent was not fit for the position. A letter of termination was
sent by Jaspersen to herein respondent stating that her services have been terminated
due to lack of confidence in her Managerial and Marketing capabilities. Thus spawned
the filing of illegal dismissal by the Respondent whereby the Labor Arbiter rendered a
decision confirming that the respondent was dismissed without just cause and hereby
orders that the Petitioner shall pay the corresponding pay for damages. The NLRC
reversed the decision upon appeal. The Court of Appeals however upheld the Labor
Arbiters decision via Certiorari filed by herein respondent.
ISSUE: Whether or not the Respondent was illegally dismissed.
RULING:
Yes. Respondent as illegally dismissed. A statement of the requisites for a valid
dismissal of an employee is thus in order, to wit: (a) the employee must be afforded
due process, i.e., he must be given opportunity to be heard and to defend himself; and
(b) dismissal must be for a valid cause as provided in Article 282 of the Labor Code
or any of the authorized causes under Article 283 and 284 of the same Code.
As regards the first requisite, the following substantiated findings of the Labor
Arbiter, which were adopted by the Court of Appeals, reflect respondents deprivation
of due process:
Complainant, not having been given a justifiable ground, refused to resign.
Thereafter, she was finally terminated, without being afforded the opportunity to be
heard and to present evidence in her defense. She was never given a written notice
stating the particular acts or omission constituting the grounds for her dismissal as
required by law.
As regards the second requisite, the rule is settled that in termination cases, the
employer bears the onus of proving that the dismissal is for just cause failing which
the dismissal is not justified and the employee is entitled to reinstatement.
Petitioner claims that respondent failed to live up to managements expectation in
light of her failure to adopt sales and marketing strategies to increase sales revenues
of SAS. However, there is no showing that respondent represented herself as
possessed of the highest degree of skill and care known in the trade. And it is not
disputed that respondent was approached by petitioners then Sales Manager Murray,
and offered the position of Sales Manager. She thus could not just be
unceremoniously discharged for loss of confidence arising from alleged
incompetency.
While an employee may be dismissed because of inefficiency, neglect or carelessness,
the law implies a situation or undertaking by an employee in entering into a contract
of employment that he is competent to perform the work undertaken and is possessed
of the requisite skill and knowledge to enable him to do so, and that he will do the
work of the employer in a careful manner. If he is not qualified to do the work which
he undertakes, if he is incompetent, unskillful or inefficient, or if he executes his work

in a negligent manner or is otherwise guilty of neglect of duty, he may lawfully be

discharged before the expiration of his term of employ

Charlito Penaranda vs. Baganga Plywood Corporation vs. Hudson Chua.

489 SCRA 94. 2006.
FACTS OF THE CASE:
In 1999, Baganga Plywood Corporation hired Charlito Penaranda as a
Foreman/Boiler Head/Shift Engineer. He was tasked to take charge of the
operations and maintenance of its steam plant boiler. When the Company shut
down due to some repairs and maintenance, the Petitioner insisted that he be
given separation benefits. When the company reopened, the Petitioner did not
reapply. Instead, he filed a complaint due alleging that he was illegally dismissed
and that he was not paid his overtime pay, premium pay for working holidays
and ight shift differentials. Chua, the General Manager of the company alleged
that the petitioner is a managerial employee and he is not entitled to overtime
pay and If he rendered services beyond the normal hours of work, there was no
order for him to do so. The Labor Arbiter ruled that there was no illegal dismissal
and that the Petitioner was still an employee of the company thus the complaint is
premature. It added that he waas entitled to overtime pay and premium pays.
The NLRC ruled that the petitioner is a managerial employee and as such, he is
not entitled to overtime and premium pay as stated under the Labor Code.
ISSUE: Whether or not the Petitioner is a regular employee entitled to monetary
benefits.
RULING:
No. Penaranda is not a managerial employee or a regular employee but a
managerial staff which takes him out of the coverage of the labor standards.
Under the implementing Rules and regulations of the Labor Code, managerial
staffs are those that perform the following: 1. the primary duty consists of the
performance of work directly related to management policies of the employer. 2.
Customarily and regularly exercises discretion and independent judgment.
3. Regularly and directly assists 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 4. who do not devote more than 200 percent of their hours worked in a
workweek to activities which are not directly and closely related to the work
described in paragraphs 1, 2 and 3 above.
The Petitioners duties and responsibilities conform to the definition of a member
of a managerial staff under the Implementing Rules. Further, in his position paper,
he admitted tthat he was a supervisor, and as such, he is deemed a member of
the managerial staff.