G.R. No.

L-4148 July 16, 1952

MANILA TERMINAL COMPANY, INC., petitioner,

vs.
THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND
MUTUAL AID ASSOCIATION, respondents.

Perkins, Ponce Enrile and Contreras for petitioner.

Antonio V. Raquiza, Honesto Ricobal and Perfecto E. Llacarfor respondent Association.
Mariano R. Padilla for respondent Court of Industrial Relations.

PARAS, C. J.:

On September 1, 1945, the Manila Terminal Company, Inc. hereinafter to be referred as

to 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. The petitioner hired
some thirty men 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. On February 1, 1946, the petitioner
began the postwar operation of the arrastre service at the present at the request and
under the control of the Bureau of Customs, by virtue of a contract entered into with the
Philippine Government. The watchmen of the petitioner continued in the service with a
number of substitutions and additions, their salaries having been raised during the
month of February to P4 per day for the day shift and P6.25 per day for the nightshift. On
March 28, 1947, Dominador Jimenez, a member of the Manila Terminal Relief and Mutual
Aid Association, sent a letter to the Department of Labor, requesting that the matter of
overtime pay be investigated, but nothing was done by the Department. On April 29,
1947, Victorino Magno Cruz and five other employees, also member of the Manila Transit
Mutual Aid Association, filed a 5-point demand with the Department of Labor, including
overtime pay, but the Department again filed to do anything about the matter. On May
27, 1947, the petitioner instituted the system of strict eight-hour shifts. On June 19,
1947, the Manila Port Terminal Police Association, not registered in accordance with the
provisions of Commonwealth Act No. 213, filed a petition with the Court of Industrial
Relations. On July 16, 1947, the Manila Terminal Relief and Mutual Aid Association was
organized for the first time, having been granted certificate No. 375 by the Department
of Labor. On July 28, 1947, Manila Terminal Relief and Mutual Aid 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. On May 9, 1949, by virtue of Customs
Administrative Order No. 81 and Executive Order No. 228 of the President of the
Philippines, the entire police force of the petitioner was 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 V. Jimenez Yanson of the Court of Industrial Relations in his decision of April 1,
1950, as amended on April 18, 1950, while dismissing other demands of the Association
for lack of jurisdiction, ordered the petitioner to pay to its police force

(a) Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as
additional overtime compensation for the period from September 1, 1945 to May 24,
1947;

(b) Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00
a.m. during the same period:

(c) Additional compensation of 50 per cent for work performed on Sundays and legal
holidays during the same period;

(d) Additional compensation of 50 per cent for work performed on Sundays and legal
holidays from May 24, 1947 to May 9, 1949; and

(e) Additional compensation of 25 per cent for work performed at night from May 29,
1947 to May 9, 1949.
With reference to the pay for overtime service after the watchmen had been integrated
into the Manila Harbor Police, Judge Yanson ruled that the court has no jurisdiction
because it affects the Bureau of Customs, an instrumentality of the Government having
no independent personality and which cannot be sued without the consent of the State.
(Metran vs. Paredes, 45. Off. Gaz., 2835.)

The petitioner find a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Judge Yanson, concurred in
by Judge Jose S. Bautista, promulgated on July 13, 1950, a resolution denying both
motions for reconsideration. Presiding Judge Arsenio C. Roldan, in a separate opinion
concurred in by Judge Modesto Castillo, agreed with the decision of Judge Yanson of April
1, 1950, as to the dismissal of other demands of the Association, but dissented
therefrom as to the granting of overtime pay. In a separate decisive opinion, Judge Juan
S. Lanting concurred in the dismissal of other demands of the Association. With respect
to overtime compensation, Judge Lanting ruled:

1. The decision under review should be affirmed in so far it grants compensation for
overtime on regular days (not Sunday and legal holidays)during the period from the date
of entrance to duty to May 24, 1947, such compensation to consists of the amount
corresponding to the four hours' overtime at the regular rate and an additional amount of
25 per cent thereof.

2. As to the compensation for work on Sundays and legal holidays, the petitioner should
pay to its watchmen the compensation that corresponds to the overtime (in excess of 8
hours) at the regular rate only, that is, without any additional amount, thus modifying
the decision under review accordingly.

3. The watchmen are not entitled to night differential pay for past services, and therefore
the decision should be reversed with the respect thereto.

The petitioner has filed a present petition for certiorari. Its various contentions may be
briefly summed up in the following propositions: (1) The Court of Industrial Relations has
no jurisdiction to render a money judgment involving obligation in arrears. (2) The
agreement under which its police force were paid certain specific wages for twelve-hour
shifts, included overtime compensation. (3) The Association is barred from recovery by
estoppel and laches. (4) the nullity or invalidity of the employment contract precludes
any recovery by the Association. (5) Commonwealth Act No. 4444 does not authorize
recovery of back overtime pay.

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 1. As a matter of fact this Court
has confirmed an order of the Court of Industrial Relations requiring the Elks Club to pay
to its employees certain sum of money as overtime back wages from June 3, 1939 to
March 13, 1941. This, in spite the allegation of lack or excess of jurisdiction on the part of
said court. (45 Off. Gaz., 3829; 80 Phil. 272)"

The important point stressed by the petitioner is that the contract between it and the
Association upon the commencement of the employment of its watchman was to the
certain rates of pay, including overtime compensation namely, P3 per day for the day
shift and P6 per day for night shift beginning September 1, 1945, and P4 per day shift
and P6.25 per day for the night shift since February, 1946. The record does not bear out
these allegations. The petitioner has relied merely on the facts that its watchmen had
worked on twelve-hour shifts at specific wages per day and that no complaint was made
about the matter until, first on March 28, 1947 and, secondly, on April 29, 1947.

In times of acute unemployment, the people, urged by the instinct of self-preservation,

go from place to place and from office to office in search for any employment, regardless
of its terms and conditions, their main concern in the first place being admission to some
work. Specially for positions requiring no special qualifications, applicants would be good
as rejected if they ever try to be inquisitive about the hours of work or the amount of
salary, ever attempt to dictate their terms. The petitioner's watchmen must have
railroaded themselves into their employment, so to speak, happy in the thought that
they would then have an income on which to subsist. But, at the same time, they found
themselves required to work for twelve hours a day. True, there was agreement to work,
but can it fairly be supposed that they had the freedom to bargain in any way, much less
to insist in the observance of the Eight Hour Labor Law?

As was aptly said in Floyd vs. Du Bois Soap Co., 1942, 317 U. S. 596, 63 Sup. Ct. 159; 6
CCH Labor Cases, Par. 51, 147, "A contract of employment, which provides for a weekly
wage for a specified number of hours, sufficient to cover both the statutory minimum
wage and overtime compensation, if computed on the basis of the statutory minimum
wage, and which makes no provision for a fixed hourly rate or that the weekly wage
includes overtime compensation, does not meet the requirements of the Act."

Moreover, we note that after the petition had instituted the strict eight-hour shifts, no
reduction was made in the salaries which its watchmen received under the twelve hour
arrangement. Indeed, as admitted by the petitioner, "when the members or the
respondent union were placed on strict eight-hour shifts, the lowest salary of all the
members of the respondent union was P165 a month, or P5.50 daily, for both day and
night shifts." Although it may be argued that the salary for the night shift was somewhat
lessened, the fact that the rate for the day shift was increased in a sense tends to
militate against the contention that the salaries given during the twelve-hour shifts
included overtime compensation.

Petitioner's allegation that the association had acquiesced in the twelve-hour shifts for
more than 18 months, is not accurate, because the watchmen involved in this case did
not enter the service of the petitioner, at one time, on September 1, 1945. As Judge
Lanting found, "only one of them entered the service of the company on said date, very
few during the rest of said month, some during the rest of that year (1945) and in 1946,
and very many in 1947, 1948 and 1949."

The case at bar is quite on all fours with the case of Detective & Protective Bureau, Inc.
vs. Court of Industrial Relations and United Employees Welfare Association, supra, in
which the facts were as follows: "The record discloses that upon petition properly
submitted, said court made an investigation and found that the members of the United
Employees Welfare Association (hereafter called the Association) were in the employ of
the petitioner Detective and Protective Bureau, Inc. (herein called the Bureau) which is
engaged in the business of furnishing security guards to commercial and industrial
establishments, paying to said members monthly salaries out of what it received from
the establishments benefited by guard service. The employment called for daily tours of
duty for more than eight hours, in addition to work on Sundays and holidays.
Nonetheless the members performed their labors without receiving extra compensation."
The only difference is that, while in said case the employees concerned were paid
monthly salaries, in the case now before us the wages were computed daily. In the case
cited, we held the following:

It appears that the Bureau had been granting the members of the Association,
every month, "two days off" days in which they rendered no service, although they
received salary for the whole month. Said Bureau contended below that the pay
corresponding to said 2 day vacation corresponded to the wages for extra work.
The court rejected the contention, quite properly we believe, because in the
contract there was no agreement to that effect; and such agreement, if any, would
probably be contrary to the provisions of the Eight-Hour Law (Act No. 444, sec. 6)
and would be null and void ab initio.

It is argued here, in opposition to the payment, that until the commencement of

this litigation the members of the Association never claimed for overtime pay. That
may be true. Nevertheless the law gives them the right to extra compensation.
And they could not be held to have impliedly waived such extra compensation, for
the obvious reason that could not have expressly waived it.

The foregoing pronouncements are in point. 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."

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.

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

While counsel for the petitioner has cited authorities in support of the doctrine invoked,
there are also authorities pointed out in the opinion of Judge Lanting to the contrary.
Suffice it to say, in this connection, that we are inclined to rule adversely against
petitioner for the reasons already stated.

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.

The employee in rendering extra service at the request of his employer has a right
to assume that the latter has complied with the requirement of the law, and
therefore has obtained the required permission from the Department of Labor.

Moreover, the Eight-Hour Law, in providing that "any agreement or contract between the
employer and the laborer or employee contrary to the provisions of this Act shall be null
avoid ab initio," (Commonwealth Act No. 444, sec. 6), obviously intended said provision
for the benefit of the laborers or employees. The employer cannot, therefore, invoke any
violation of the act to exempt him from liability for extra compensation. This conclusion
is further supported by the fact that the law makes only the employer criminally liable for
any violation. It cannot be pretended that, for the employer to commit any violation of
the Eight-Hour Labor Law, the participation or acquiescence of the employee or laborer is
indispensable, because the latter in view of his need and desire to live, cannot be
considered as being on the same level with the employer when it comes to the question
of applying for and accepting an employment.

Petitioner also contends that Commonwealth Act No. 444 does not provide for recovery
of back overtime pay, and to support this contention it makes referrence to the Fair
Labor Standards Act of the United States which provides that "any employer who violates
the provisions of section 206 and section 207 of this 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," a provision not incorporated in
Commonwealth Act 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.

The point is stressed that the payment of the claim of the Association for overtime pay
covering a period of almost two years may lead to the financial ruin of the petitioner, to
the detriment of its employees themselves. It is significant, however, that not all the
petitioner's watchmen would receive back overtime pay for the whole period specified in
the appealed decision, since the record shows that the great majority of the watchmen
were admitted in 1946 and 1947, and even 1948 and 1949. At any rate, we are
constrained to sustain the claim of the Association as a matter of simple justice,
consistent with the spirit and purpose of the Eight-Hour Labor Law. The petitioner, in the
first place, was required to comply with the law and should therefore be made liable for
the consequences of its violation.

It is high time that all employers were warned that the public is interested in the strict
enforcement of the Eight-Hour Labor Law. This was designed not only to safeguard the
health and welfare of the laborer or employee, but in a way to minimize unemployment
by forcing employers, in cases where more than 8-hour operation is necessary, to utilize
different shifts of laborers or employees working only for eight hours each.

Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it
being understood that the petitioner's watchmen will be entitled to extra compensation
only from the dates they respectively entered the service of the petitioner, hereafter to
be duly determined by the Court of Industrial Relations. So ordered, without costs.

Feria, Pablo, Bengzon, Padilla, Tuason, Bautista Angelo, and Labrador, JJ., concur.

Footnotes
1
Cf. The Shell Co. vs. National Labor Union, 46 Off. Gaz. Supp. 1, p. 97; 81 Phil.,
135.

85 Phil. 291.

G.R. No. 159577 May 3, 2006

CHARLITO PEARANDA, Petitioner,

vs.
BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, Respondents.

DECISION

PANGANIBAN, CJ:

Managerial employees and members of the managerial staff are exempted from the
provisions of the Labor Code on labor standards. Since petitioner belongs to this class of
employees, he is not entitled to overtime pay and premium pay for working on rest days.

The Case

Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, assailing the
January 27, 20032 and July 4, 20033 Resolutions of the Court of Appeals (CA) in CA-GR SP
No. 74358. The earlier Resolution disposed as follows:

"WHEREFORE, premises considered, the instant petition is hereby DISMISSED."4

The latter Resolution denied reconsideration.

On the other hand, the Decision of the National Labor Relations Commission (NLRC)
challenged in the CA disposed as follows:

"WHEREFORE, premises considered, the decision of the Labor Arbiter below awarding
overtime pay and premium pay for rest day to complainant is hereby REVERSED and SET
ASIDE, and the complaint in the above-entitled case dismissed for lack of merit.5

The Facts

Sometime in June 1999, Petitioner Charlito Pearanda was hired as an employee of

Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance of
its steam plant boiler.6 In May 2001, Pearanda filed a Complaint for illegal dismissal with
money claims against BPC and its general manager, Hudson Chua, before the NLRC.7
After the parties failed to settle amicably, the labor arbiter8 directed the parties to file
their position papers and submit supporting documents. 9 Their respective allegations are
summarized by the labor arbiter as follows:

"[Pearanda] through counsel in his position paper alleges that he was employed by
respondent [Baganga] on March 15, 1999 with a monthly salary of P5,000.00 as
Foreman/Boiler Head/Shift Engineer until he was illegally terminated on December 19,
2000. Further, [he] alleges that his services [were] terminated without the benefit of due
process and valid grounds in accordance with law. Furthermore, he was not paid his
overtime pay, premium pay for working during holidays/rest days, night shift differentials
and finally claims for payment of damages and attorneys fees having been forced to
litigate the present complaint.

"Upon the other hand, respondent [BPC] is a domestic corporation duly organized and
existing under Philippine laws and is represented herein by its General Manager HUDSON
CHUA, [the] individual respondent. Respondents thru counsel allege that complainants
separation from service was done pursuant to Art. 283 of the Labor Code. The
respondent [BPC] was on temporary closure due to repair and general maintenance and
it applied for clearance with the Department of Labor and Employment, Regional Office
No. XI to shut down and to dismiss employees (par. 2 position paper). And due to the
insistence of herein complainant he was paid his separation benefits (Annexes C and D,
ibid). Consequently, when respondent [BPC] partially reopened in January 2001,
[Pearanda] failed to reapply. Hence, he was not terminated from employment much less
illegally. He opted to severe employment when he insisted payment of his separation
benefits. Furthermore, being a managerial employee he is not entitled to overtime pay
and if ever he rendered services beyond the normal hours of work, [there] was no office
order/or authorization for him to do so. Finally, respondents allege that the claim for
damages has no legal and factual basis and that the instant complaint must necessarily
fail for lack of merit."10

The labor arbiter ruled that there was no illegal dismissal and that petitioners Complaint
was premature because he was still employed by BPC. 11 The temporary closure of BPCs
plant did not terminate his employment, hence, he need not reapply when the plant
reopened.

According to the labor arbiter, petitioners money claims for illegal dismissal was also
weakened by his quitclaim and admission during the clarificatory conference that he
accepted separation benefits, sick and vacation leave conversions and thirteenth month
pay.12

Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay
for working on rest days, and attorneys fees in the total amount of P21,257.98.13

Ruling of the NLRC

Respondents filed an appeal to the NLRC, which deleted the award of overtime pay and
premium pay for working on rest days. According to the Commission, petitioner was not
entitled to these awards because he was a managerial employee.14

Ruling of the Court of Appeals

In its Resolution dated January 27, 2003, the CA dismissed Pearandas Petition for
Certiorari. The appellate court held that he failed to: 1) attach copies of the pleadings
submitted before the labor arbiter and NLRC; and 2) explain why the filing and service of
the Petition was not done by personal service.15

In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground
that petitioner still failed to submit the pleadings filed before the NLRC.16

Hence this Petition.17

The Issues

Petitioner states the issues in this wise:

"The [NLRC] committed grave abuse of discretion amounting to excess or lack of
jurisdiction when it entertained the APPEAL of the respondent[s] despite the lapse of the
mandatory period of TEN DAYS.1avvphil.net

"The [NLRC] committed grave abuse of discretion amounting to an excess or lack of

jurisdiction when it rendered the assailed RESOLUTIONS dated May 8, 2002 and AUGUST
16, 2002 REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL FINDINGS of the
[labor arbiter] with respect to the following:

"I. The finding of the [labor arbiter] that [Pearanda] is a regular, common
employee entitled to monetary benefits under Art. 82 [of the Labor Code].

"II. The finding that [Pearanda] is entitled to the payment of OVERTIME PAY and
OTHER MONETARY BENEFITS."18

The Courts Ruling

The Petition is not meritorious.

Preliminary Issue:

Resolution on the Merits

The CA dismissed Pearandas Petition on purely technical grounds, particularly with

regard to the failure to submit supporting documents.

In Atillo v. Bombay,19 the Court held that the crucial issue is whether the documents
accompanying the petition before the CA sufficiently supported the allegations therein.
Citing this case, Piglas-Kamao v. NLRC 20 stayed the dismissal of an appeal in the exercise
of its equity jurisdiction to order the adjudication on the merits.

The Petition filed with the CA shows a prima facie case. Petitioner attached his evidence
to challenge the finding that he was a managerial employee. 21 In his Motion for
Reconsideration, petitioner also submitted the pleadings before the labor arbiter in an
attempt to comply with the CA rules.22 Evidently, the CA could have ruled on the Petition
on the basis of these attachments. Petitioner should be deemed in substantial
compliance with the procedural requirements.

Under these extenuating circumstances, the Court does not hesitate to grant liberality in
favor of petitioner and to tackle his substantive arguments in the present case. Rules of
procedure must be adopted to help promote, not frustrate, substantial justice. 23 The
Court frowns upon the practice of dismissing cases purely on procedural
grounds.24 Considering that there was substantial compliance, 25 a liberal interpretation of
procedural rules in this labor case is more in keeping with the constitutional mandate to
secure social justice.26

First Issue:

Timeliness of Appeal

Under the Rules of Procedure of the NLRC, an appeal from the decision of the labor
arbiter should be filed within 10 days from receipt thereof.27

Petitioners claim that respondents filed their appeal beyond the required period is not
substantiated. In the pleadings before us, petitioner fails to indicate when respondents
received the Decision of the labor arbiter. Neither did the petitioner attach a copy of the
challenged appeal. Thus, this Court has no means to determine from the records when
the 10-day period commenced and terminated. Since petitioner utterly failed to support
his claim that respondents appeal was filed out of time, we need not belabor that point.
The parties alleging have the burden of substantiating their allegations. 28

Second Issue:

Nature of Employment
Petitioner claims that he was not a managerial employee, and therefore, entitled to the
award granted by the labor arbiter.

Article 82 of the Labor Code exempts managerial employees from the coverage of labor
standards. Labor standards provide the working conditions of employees, including
entitlement to overtime pay and premium pay for working on rest days. 29 Under this
provision, managerial employees are "those whose primary duty consists of the
management of the establishment in which they are employed or of a department or
subdivision."30

The Implementing Rules of the Labor Code state that managerial employees are those
who meet the following conditions:

"(1) Their primary duty consists of the management of the establishment in which
they are employed or of a department or subdivision thereof;

"(2) They customarily and regularly direct the work of two or more employees
therein;

"(3) They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to the hiring and firing and as to the
promotion or any other change of status of other employees are given particular
weight."31

The Court disagrees with the NLRCs finding that petitioner was a managerial employee.
However, petitioner was a member of the managerial staff, which also takes him out of
the coverage of labor standards. Like managerial employees, officers and members of
the managerial staff are not entitled to the provisions of law on labor standards. 32 The
Implementing Rules of the Labor Code define members of a managerial staff as those
with the following duties and responsibilities:

"(1) The primary duty consists of the performance of work directly related to
management policies of the employer;

"(2) Customarily and regularly exercise discretion and independent judgment;

"(3) (i) 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

"(4) 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."33

As shift engineer, petitioners duties and responsibilities were as follows:

"1. To supply the required and continuous steam to all consuming units at
minimum cost.

"2. To supervise, check and monitor manpower workmanship as well as operation

of boiler and accessories.

"3. To evaluate performance of machinery and manpower.

"4. To follow-up supply of waste and other materials for fuel.

"5. To train new employees for effective and safety while working.

"6. Recommend parts and supplies purchases.

"7. To recommend personnel actions such as: promotion, or disciplinary action.

 "8. To check water from the boiler, feedwater and softener, regenerate softener if
beyond hardness limit.

"9. Implement Chemical Dosing.

"10. Perform other task as required by the superior from time to time."34

The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner

was a member of the managerial staff. His duties and responsibilities conform to the
definition of a member of a managerial staff under the Implementing Rules.

Petitioner supervised the engineering section of the steam plant boiler. His work involved
overseeing the operation of the machines and the performance of the workers in the
engineering section. This work necessarily required the use of discretion and
independent judgment to ensure the proper functioning of the steam plant boiler. As
supervisor, petitioner is deemed a member of the managerial staff.35

Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he
stated that he was the foreman responsible for the operation of the boiler. 36 The term
foreman implies that he was the representative of management over the workers and
the operation of the department. 37 Petitioners evidence also showed that he was the
supervisor of the steam plant.38 His classification as supervisor is further evident from
the manner his salary was paid. He belonged to the 10% of respondents 354 employees
who were paid on a monthly basis; the others were paid only on a daily basis.39

On the basis of the foregoing, the Court finds no justification to award overtime pay and
premium pay for rest days to petitioner.

WHEREFORE, the Petition is DENIED. Costs against petitioner.

SO ORDERED.

ARTEMIO V. PANGANIBAN
Chief Justice
Chairman, First Division

WE CONCUR:

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice Asscociate Justice

ROMEO J. CALLEJO, SR. MINITA V. CHICO-NAZARIO

Associate Justice Asscociate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision were reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes
1
Rollo, pp. 4-11.
2
Id. at 64-65 & 298-299. Former Sixteenth Division. Penned by Justice Rodrigo V.
Cosico (Division chairperson), with the concurrence of Justices Rebecca de Guia-
Salvador and Regalado E. Maambong (members).
3
Id. at 51-52.
4
Id. at 65 & 299.
5
Id. at 34.
6
Petitioners Memorandum, p. 3; rollo, p. 266.
7
Id. at 2; id. at 265.
8
The labor arbiter assigned to the case was Arturo L. Gamolo.
9
Decision of the Labor Arbiter, p. 1; rollo, p. 21.
10
Id. at 2; id. at 22.
11
Id. at 3; id. at 23.
12
Id. at 4; id. at 24.
13
Id. at 5; id. at 25.
14
NLRC Resolution dated May 8, 2002, p. 2; rollo, p. 33.
15
Assailed CA Resolution dated January 27, 2003, pp. 1-2; rollo, pp. 298-299.
16
Assailed CA Resolution dated July 4, 2003, p. 1; id. at 51.
17
This Petition was deemed submitted for decision on June 29, 2005 upon this
Courts receipt of petitioners Memorandum, which he signed with the assistance of
Atty. Angela A. Librado. Respondents Memorandum, signed by Atty. Leo N.
Caubang, was received by this Court on May 26, 2005.
18
Petitioners Memorandum, pp. 5-6; rollo, pp. 268-269.
19
351 SCRA 361, February 7, 2001.
20
357 SCRA 640, May 9, 2001.
21
Petitioner attached his pay slips and job designation, and the companys
manpower schedule as Annexes "C," "D," and "E" (CA rollo, pp. 20-31).
22
Petitioner submitted the parties position papers before the labor arbiter and
their respective supporting documents (CA rollo, pp. 43-64).
23
Chua v. Absolute Management Corporation, 412 SCRA 547, October 16, 2003;
Pacific Life Assurance Corporation v. Sison, 359 Phil. 332, November 20, 1998;
Gregorio v. Court of Appeals, 72 SCRA 120, July 28, 1976.
24
Pacific Life Assurance Corporation v. Sison, id.; Empire Insurance Company v.
National Labor Relations Commission, 355 Phil. 694, August 14, 1998; People
Security Inc. v. National Labor Relations Commission, 226 SCRA 146, September 8,
1993; Tamargo v. Court of Appeals, 209 SCRA 518, June 3, 1992.
25
Chua v. Absolute Management Corporation, supra note 23; Cusi-Hernandez v.
Diaz, 336 SCRA 113, July 18, 2000.
26
Constitution Art. II, Sec. 18 and Art. XIII, Sec. 3. See Ablaza v. Court of Industrial
Relations, 126 SCRA 247, December 21, 1983.
27
New Rules of Procedure of the National Labor Relations Commission, Rule VI, Sec.
1.
28
Rules of Court, Rule 131, Sec. 1.
29
Labor standards is found in Book 3 of the Labor Code, entitled "Conditions of
Employment." Arts. 87 and 93 provide:
 "Arts. 87. Overtime work. Work may be performed beyond eight (8) hours a
day provided that the employee is paid for the overtime work, an additional
compensation equivalent to his regular wage plus at least twenty-five (25%)
per cent thereof. Work performed beyond eight hours on a holiday or rest day
shall be paid an additional compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least thirty percent thereof."

"Art. 93. Compensation for rest day, Sunday or holiday work. (a) Where an
employee is made or permitted to work on his scheduled rest day, he shall
be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation
for work performed on Sunday only when it is his established rest day.

(b) When the nature of the work of the employee is such that he has no
regular workdays and no regular rest days can be scheduled, he shall
be paid an additional compensation of at least thirty percent (30%) of
his regular wage for work performed on Sundays and holidays.

(c) Work performed on any special holiday shall be paid an additional

compensation of at least thirty percent (30%) of the regular wage of
the employee. Where such holiday work falls on the employees
scheduled rest day, he shall be entitled to an additional compensation
of at least fifty percent (50%) of his regular wage.

(d) Where the collective bargaining agreement or other applicable

employment contract stipulates the payment of a higher premium pay
than that prescribed under this Article, the employer shall pay such
higher rate."
30
The other definition of a managerial employee found in the Labor Code Art.
212(m) is in connection with labor relations or the right to engage in unionization.
Under this provision, a managerial employee is one "vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay off, recall, discharge, assign or discipline employees." C.
Azucena, Everyones Labor Code, 58 (2001 ed.).
31
Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(b).
32
Labor Code, Art. 82.
33
Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(c).
34
Job Description, submitted as petitioners Annex to his Memorandum; rollo, p.
312.
35
See Quebec v. National Labor Relations Commission, 361 Phil. 555, January 22,
1999; Salazar v. National Labor Relations Commission, 326 Phil. 288, April 17,
1996; National Sugar Refineries Corporation v. National Labor Relations
Commission, 220 SCRA 452, March 24, 1993.
36
Petitioners Position Paper, p. 1; rollo, p. 14.
37
Websters Third New International Dictionary, 889 (1976).
38
Servicing Schedule, submitted as petitioners Annex to his Memorandum; rollo p.
315.
39
Respondents Termination Report submitted to the Department of Labor and
Employment; rollo, pp. 49-61.

G.R. No. 156367 May 16, 2005

AUTO BUS TRANSPORT SYSTEMS, INC., petitioner,

vs.
ANTONIO BAUTISTA, respondent.
DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari assailing the Decision1 and Resolution2 of
the Court of Appeals affirming the Decision 3 of the National Labor Relations Commission
(NLRC). The NLRC ruling modified the Decision of the Labor Arbiter (finding respondent
entitled to the award of 13th month pay and service incentive leave pay) by deleting the
award of 13th month pay to respondent.

THE FACTS

Since 24 May 1995, respondent Antonio Bautista has been employed by petitioner Auto
Bus Transport Systems, Inc. (Autobus), as driver-conductor with travel routes Manila-
Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and Manila-Tabuk via Baguio.
Respondent was paid on commission basis, seven percent (7%) of the total gross income
per travel, on a twice a month basis.

On 03 January 2000, while respondent was driving Autobus No. 114 along Sta. Fe, Nueva
Vizcaya, the bus he was driving accidentally bumped the rear portion of Autobus No.
124, as the latter vehicle suddenly stopped at a sharp curve without giving any warning.

Respondent averred that the accident happened because he was compelled by the
management to go back to Roxas, Isabela, although he had not slept for almost twenty-
four (24) hours, as he had just arrived in Manila from Roxas, Isabela. Respondent further
alleged that he was not allowed to work until he fully paid the amount of P75,551.50,
representing thirty percent (30%) of the cost of repair of the damaged buses and that
despite respondents pleas for reconsideration, the same was ignored by management.
After a month, management sent him a letter of termination.

Thus, on 02 February 2000, respondent instituted a Complaint for Illegal Dismissal with
Money Claims for nonpayment of 13th month pay and service incentive leave pay against
Autobus.

Petitioner, on the other hand, maintained that respondents employment was replete
with offenses involving reckless imprudence, gross negligence, and dishonesty. To
support its claim, petitioner presented copies of letters, memos, irregularity reports, and
warrants of arrest pertaining to several incidents wherein respondent was involved.

Furthermore, petitioner avers that in the exercise of its management prerogative,

respondents employment was terminated only after the latter was provided with an
opportunity to explain his side regarding the accident on 03 January 2000.

On 29 September 2000, based on the pleadings and supporting evidence presented by

the parties, Labor Arbiter Monroe C. Tabingan promulgated a Decision, 4 the dispositive
portion of which reads:

WHEREFORE, all premises considered, it is hereby found that the complaint for
Illegal Dismissal has no leg to stand on. It is hereby ordered DISMISSED, as it is
hereby DISMISSED.

However, still based on the above-discussed premises, the respondent must pay to
the complainant the following:

a. his 13th month pay from the date of his hiring to the date of his dismissal,
presently computed at P78,117.87;

b. his service incentive leave pay for all the years he had been in service
with the respondent, presently computed at P13,788.05.

All other claims of both complainant and respondent are hereby dismissed for lack
of merit.5

Not satisfied with the decision of the Labor Arbiter, petitioner appealed the decision to
the NLRC which rendered its decision on 28 September 2001, the decretal portion of
which reads:
 [T]he Rules and Regulations Implementing Presidential Decree No. 851, particularly
Sec. 3 provides:

"Section 3. Employers covered. The Decree shall apply to all employers

except to:

xxx xxx xxx

e) employers of those who are paid on purely commission, boundary, or task

basis, performing a specific work, irrespective of the time consumed in the
performance thereof. xxx."

Records show that complainant, in his position paper, admitted that he was paid on
a commission basis.

In view of the foregoing, we deem it just and equitable to modify the assailed
Decision by deleting the award of 13th month pay to the complainant.

WHEREFORE, the Decision dated 29 September 2000 is MODIFIED by deleting the

award of 13th month pay. The other findings are AFFIRMED.6

In other words, the award of service incentive leave pay was maintained. Petitioner thus
sought a reconsideration of this aspect, which was subsequently denied in a Resolution
by the NLRC dated 31 October 2001.

Displeased with only the partial grant of its appeal to the NLRC, petitioner sought the
review of said decision with the Court of Appeals which was subsequently denied by the
appellate court in a Decision dated 06 May 2002, the dispositive portion of which reads:

WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit; and
the assailed Decision of respondent Commission in NLRC NCR CA No. 026584-2000
is hereby AFFIRMED in toto. No costs.7

Hence, the instant petition.

ISSUES

1. Whether or not respondent is entitled to service incentive leave;

2. Whether or not the three (3)-year prescriptive period provided under Article 291 of the
Labor Code, as amended, is applicable to respondents claim of service incentive leave
pay.

RULING OF THE COURT

The disposition of the first issue revolves around the proper interpretation of Article 95 of
the Labor Code vis--vis Section 1(D), Rule V, Book III of the Implementing Rules and
Regulations of the Labor Code which provides:

Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE

(a) Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay.

Book III, Rule V: SERVICE INCENTIVE LEAVE

SECTION 1. Coverage. This rule shall apply to all employees except:

(d) 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 in a fixed amount for
 performing work irrespective of the time consumed in the performance
thereof; . . .

A careful perusal of said provisions of law will result in the conclusion that the grant of
service incentive leave has been delimited by the Implementing Rules and Regulations of
the Labor Code to apply only to those employees not explicitly excluded by Section 1 of
Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to
employees classified as "field personnel." The phrase "other employees whose
performance is unsupervised by the employer" must not be understood as a separate
classification of employees to which service incentive leave shall not be granted. Rather,
it serves as an amplification of the interpretation of the definition of field personnel
under the Labor Code as those "whose actual hours of work in the field cannot be
determined with reasonable certainty."8

The same is true with respect to the phrase "those who are engaged on task or contract
basis, purely commission basis." Said phrase should be related with "field personnel,"
applying the rule on ejusdem generis that general and unlimited terms are restrained
and limited by the particular terms that they follow. 9 Hence, employees engaged on task
or contract basis or paid on purely commission basis are not automatically exempted
from the grant of service incentive leave, unless, they fall under the classification of field
personnel.

Therefore, petitioners contention that respondent is not entitled to the grant of service
incentive leave just because he was paid on purely commission basis is misplaced. What
must be ascertained in order to resolve the issue of propriety of the grant of service
incentive leave to respondent is whether or not he is a field personnel.

According to Article 82 of the Labor Code, "field personnel" shall refer to non-agricultural
employees who regularly perform their duties away from the principal place of business
or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. This definition is further elaborated in the Bureau
of Working Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical
Commercial Employees Association10 which states that:

As a general rule, [field personnel] are those whose performance of their

job/service is not supervised by the employer or his representative, the workplace
being away from the principal office and whose hours and days of work cannot be
determined with reasonable certainty; hence, they are paid specific amount for
rendering specific service or performing specific work. If required to be at specific
places at specific times, employees including drivers cannot be said to be field
personnel despite the fact that they are performing work away from the principal
office of the employee. [Emphasis ours]

To this discussion by the BWC, the petitioner differs and postulates that under said
advisory opinion, no employee would ever be considered a field personnel because every
employer, in one way or another, exercises control over his employees. Petitioner further
argues that the only criterion that should be considered is the nature of work of the
employee in that, if the employees job requires that he works away from the principal
office like that of a messenger or a bus driver, then he is inevitably a field personnel.

We are not persuaded. At this point, it is necessary to stress that the definition of a "field
personnel" is not merely concerned with the location where the employee regularly
performs his duties but also with the fact that the employees performance is
unsupervised by the employer. As discussed above, field personnel are those who
regularly perform their duties away from the principal place of business of the
employer and whose actual hours of work in the field cannot be determined with
reasonable certainty. Thus, in order to conclude whether an employee is a field
employee, it is also necessary to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer. In so doing, an inquiry must be
made as to whether or not the employees time and performance are constantly
supervised by the employer.

As observed by the Labor Arbiter and concurred in by the Court of Appeals:

It is of judicial notice that along the routes that are plied by these bus companies,
there are its inspectors assigned at strategic places who board the bus and inspect
 the passengers, the punched tickets, and the conductors reports. There is also the
mandatory once-a-week car barn or shop day, where the bus is regularly checked
as to its mechanical, electrical, and hydraulic aspects, whether or not there are
problems thereon as reported by the driver and/or conductor. They too, must be at
specific place as [sic] specified time, as they generally observe prompt departure
and arrival from their point of origin to their point of destination. In each and every
depot, there is always the Dispatcher whose function is precisely to see to it that
the bus and its crew leave the premises at specific times and arrive at the
estimated proper time. These, are present in the case at bar. The driver, the
complainant herein, was therefore under constant supervision while in the
performance of this work. He cannot be considered a field personnel.11

We agree in the above disquisition. Therefore, as correctly concluded by the appellate

court, respondent is not a field personnel but a regular employee who performs tasks
usually necessary and desirable to the usual trade of petitioners business. Accordingly,
respondent is entitled to the grant of service incentive leave.

The question now that must be addressed is up to what amount of service incentive
leave pay respondent is entitled to.

The response to this query inevitably leads us to the correlative issue of whether or not
the three (3)-year prescriptive period under Article 291 of the Labor Code is applicable to
respondents claim of service incentive leave pay.

Article 291 of the Labor Code states that all money claims arising from employer-
employee relationship shall be filed within three (3) years from the time the cause of
action accrued; otherwise, they shall be forever barred.

In the application of this section of the Labor Code, the pivotal question to be answered
is when does the cause of action for money claims accrue in order to determine the
reckoning date of the three-year prescriptive period.

It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in
favor of the plaintiff by whatever means and under whatever law it arises or is created;
(2) an obligation on the part of the named defendant to respect or not to violate such
right; and (3) an act or omission on the part of such defendant violative of the right of
the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff.12

To properly construe Article 291 of the Labor Code, it is essential to ascertain the time
when the third element of a cause of action transpired. Stated differently, in the
computation of the three-year prescriptive period, a determination must be made as to
the period when the act constituting a violation of the workers right to the benefits
being claimed was committed. For if the cause of action accrued more than three (3)
years before the filing of the money claim, said cause of action has already prescribed in
accordance with Article 291.13

Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is

established that the benefits being claimed have been withheld from the employee for a
period longer than three (3) years, the amount pertaining to the period beyond the
three-year prescriptive period is therefore barred by prescription. The amount that can
only be demanded by the aggrieved employee shall be limited to the amount of the
benefits withheld within three (3) years before the filing of the complaint.14

It is essential at this point, however, to recognize that the service incentive leave is a
curious animal in relation to other benefits granted by the law to every employee. In the
case of service incentive leave, the employee may choose to either use his leave credits
or commute it to its monetary equivalent if not exhausted at the end of the
year.15 Furthermore, if the employee entitled to service incentive leave does not use or
commute the same, he is entitled upon his resignation or separation from work to the
commutation of his accrued service incentive leave. As enunciated by the Court
in Fernandez v. NLRC:16

The clear policy of the Labor Code is to grant service incentive leave pay to
workers in all establishments, subject to a few exceptions. Section 2, Rule V, Book
III of the Implementing Rules and Regulations provides that "[e]very employee who
has rendered at least one year of service shall be entitled to a yearly service
 incentive leave of five days with pay." Service incentive leave is a right which
accrues to every employee who has served "within 12 months, whether continuous
or broken reckoned from the date the employee started working, including
authorized absences and paid regular holidays unless the working days in the
establishment as a matter of practice or policy, or that provided in the employment
contracts, is less than 12 months, in which case said period shall be considered as
one year." It is also "commutable to its money equivalent if not used or exhausted
at the end of the year." In other words, an employee who has served for one year
is entitled to it. He may use it as leave days or he may collect its monetary
value. To limit the award to three years, as the solicitor general recommends, is to
unduly restrict such right.17 [Italics supplied]

Correspondingly, it can be conscientiously deduced that the cause of action of an

entitled employee to claim his service incentive leave pay accrues from the moment the
employer refuses to remunerate its monetary equivalent if the employee did not make
use of said leave credits but instead chose to avail of its commutation. Accordingly, if the
employee wishes to accumulate his leave credits and opts for its commutation upon his
resignation or separation from employment, his cause of action to claim the whole
amount of his accumulated service incentive leave shall arise when the employer fails to
pay such amount at the time of his resignation or separation from employment.

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive
leave, we can conclude that the three (3)-year prescriptive period commences, not at the
end of the year when the employee becomes entitled to the commutation of his service
incentive leave, but from the time when the employer refuses to pay its monetary
equivalent after demand of commutation or upon termination of the employees
services, as the case may be.

The above construal of Art. 291, vis--vis the rules on service incentive leave, is in
keeping with the rudimentary principle that in the implementation and interpretation of
the provisions of the Labor Code and its implementing regulations, the workingmans
welfare should be the primordial and paramount consideration. 18 The policy is to extend
the applicability of the decree to a greater number of employees who can avail of the
benefits under the law, which is in consonance with the avowed policy of the State to
give maximum aid and protection to labor.19

In the case at bar, respondent had not made use of his service incentive leave nor
demanded for its commutation until his employment was terminated by petitioner.
Neither did petitioner compensate his accumulated service incentive leave pay at the
time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one
month from the time of his dismissal, that respondent demanded from his former
employer commutation of his accumulated leave credits. His cause of action to claim the
payment of his accumulated service incentive leave thus accrued from the time when his
employer dismissed him and failed to pay his accumulated leave credits.

Therefore, the prescriptive period with respect to his claim for service incentive leave
pay only commenced from the time the employer failed to compensate his accumulated
service incentive leave pay at the time of his dismissal. Since respondent had filed his
money claim after only one month from the time of his dismissal, necessarily, his money
claim was filed within the prescriptive period provided for by Article 291 of the Labor
Code.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed
Decision of the Court of Appeals in CA-G.R. SP. No. 68395 is hereby AFFIRMED. No Costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

Footnotes
1
CA-G.R. SP No. 68395, dated 06 May 2002, penned by Associate Justice Andres B.
Reyes, Jr. with Associate Justices Conrado M. Vasquez, Jr. and Mario L. Guaria, III,
concurring.
2
Dated 12 December 2002.
 3
NLRC NCR CA No. 026584-2000 (NLRC Case No. RAB CAR 02-0088-00), dated 28
September 2001.
4
NLRC Case No. RAB-CAR-02-0088-00.
5
Rollo, pp. 46-47.
6
Rollo, pp. 52-53.
7
CA Decision, p. 10; Rollo, p. 24.
8
See Mercidar Fishing Corporation v. NLRC, G.R. No. 112574, 08 October 1998, 297
SCRA440.
9
Cebu Institute of Technology v. Ople, G.R. No. L-58870, 18 December 1987, 156
SCRA 629, 672, citingVera v. Cuevas, G.R. No. L-33693, 31 May 1979, 90 SCRA 379.
10
06 April 1989; Rollo. p. 20.
11
Rollo, pp. 45-46.
12
Baliwag Transit, Inc. v. Ople, G.R. No. 57642, 16 March 1989, 171 SCRA 250,
citing Agric. Credit & Cooperative Financing Administration v. Alpha Ins. & Surety
Co., Inc., G.R. No. L-24566, 29 July 1968, 24 SCRA 151; Summit Guaranty and
Insurance Co., Inc. v. De Guzman, G.R. No. L-50997, 30 June 1987, 151 SCRA 389;
Tormon v. Cutanda, G.R. No. L-18785, 23 December 1963, 9 SCRA 698.
13
See De Guzman, et al. v. CA and Nasipit Lumber Co., G.R. No.132257, 12 October
1998, 297 SCRA 743.
14
See E. Ganzon, Inc. v. NLRC, G.R. No. 123769, 22 December 1999, 321 SCRA
434.
15
Fernandez v. NLRC, G.R. No. 105892, 28 January 1998, 349 Phil 65.
16
Ibid.
17
Ibid., pp. 94-95.
18
Abella v. NLRC, G.R. No. L-71813, 20 July 1987, 152 SCRA 140, citing Volkschel
Labor Union v. Bureau of Labor Relations, G.R. No. L-45824, 19 June 1985, 137
SCRA 43.
19
Sarmiento v. Employees Compensation Commission, G.R. No. L-68648, 24
September 1986, 144 SCRA 421, citing Cristobal v. Employees Compensation
Commission, G.R. No. L-49280, 26 February 1981, 103 SCRA 329; Acosta v.
Employees Compensation Commission, G.R. No. L-55464, 12 November 1981, 109
SCRA 209.

G.R. No. 123938 May 21, 1998

LABOR CONGRESS OF THE PHILIPPINES (LCP) for and in behalf of its members,
ANA MARIE OCAMPO, MARY INTAL, ANNABEL CARESO, MARLENE MELQIADES,
IRENE JACINTO, NANCY GARCIA, IMELDA SARMIENTO, LENITA VIRAY, GINA
JACINTO, ROSEMARIE DEL ROSARIO, CATHERINE ASPURNA, WINNIE PENA,
VIVIAN BAA, EMILY LAGMAN, LILIAN MARFIL, NANCY DERACO, JANET DERACO,
MELODY JACINTO, CAROLYN DIZON, IMELDA MANALOTO, NORY VIRAY, ELIZA
SALAZAR, GIGI MANALOTO, JOSEFINA BASILIO, MARY ANN MAYATI, ZENAIDA
GARCIA, MERLY CANLAS, ERLINDA MANALANG, ANGELINA QUIAMBAO, LANIE
GARCIA, ELVIRA PIEDRA, LOURDES PANLILIO, LUISA PANLILIO, LERIZA PANLILIO,
ALMA CASTRO, ALDA DAVID, MYRA T. OLALIA, MARIFE PINLAC, NENITA DE
GUZMAN, JULIE GACAD, EVELYN MANALO, NORA PATIO, JANETH CARREON,
ROWENA MENDOZA, ROWENA MANALO, LENY GARCIA, FELISISIMA PATIO,
SUSANA SALOMON, JOYDEE LANSANGAN, REMEDIOS AGUAS, JEANIE
LANSANGAN, ELIZABETH MERCADO, JOSELYN MANALESE, BERNADETH RALAR,
LOLITA ESPIRITU, AGNES SALAS, VIRGINIA MENDIOLA, GLENDA SALITA, JANETH
RALAR, ERLINDA BASILIO, CORA PATIO, ANTONIA CALMA, AGNES CARESO,
GEMMA BONUS, MARITESS OCAMPO, LIBERTY GELISANGA, JANETH MANARANG,
AMALIA DELA CRUZ, EVA CUEVAS, TERESA MANIAGO, ARCELY PEREZ, LOIDA BIE,
ROSITA CANLAS, ANALIZA ESGUERRA, LAILA MANIAGO, JOSIE MANABAT,
ROSARIO DIMATULAC, NYMPA TUAZON, DAIZY TUASON, ERLINDA NAVARRO,
EMILY MANARANG, EMELITA CAYANAN, MERCY CAYANAN, LUZVIMINDA
CAYANAN, ANABEL MANALO, SONIA DIZON, ERNA CANLAS, MARIAN BENEDICTA,
DOLORES DOLETIN, JULIE DAVID, GRACE VILLANUEVA, VIRGINIA MAGBAG,
CORAZON RILLION, PRECY MANALILI, ELENA RONOZ, IMELDA MENDOZA, EDNA
CANLAS and ANGELA CANLAS, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, EMPIRE FOOD PRODUCTS, its
Proprietor/President & Manager, MR. GONZALO KEHYENG and MRS. EVELYN
KEHYENG, respondents.

DAVIDE, JR., J.:

In this special civil action for certiorari under Rule 65, petitioners seek to reverse the 29
March 1995 resolution 1 of the National Labor Relations Commission (NLRC) in NLRC RAB
III Case No. 01-1964-91 which affirmed the Decision 2 of Labor Arbiter Ariel C. Santos
dismissing their complaint for utter lack of merit.

The antecedents of this case, as summarized by the Office of the Solicitor General in its
Manifestation and Motion in Lieu of Comment, 3 are as follows:

The 99 persons named as petitioners in this proceeding were rank-and-file

employees of respondent Empire Food Products, which hired them on various
dates (Paragraph 1, Annex "A" of Petition, Annex "B;" Page 2, Annex "F" of
Petition).

Petitioners filed against private respondents a complaint for payment of

money claim[s] and for violation of labor standard[s] laws (NLRC Case No.
RAB-111-10-1817-90). They also filed a petition for direct certification of
petitioner Labor Congress of the Philippines as their bargaining
representative (Case No. R0300-9010-RU-005).

On October 23, 1990, petitioners represented by LCP President Benigno B.

Navarro, Sr. and private respondents Gonzalo Kehyeng and Evelyn Kehyeng
in behalf of Empire Food Products, Inc. entered into a Memorandum of
Agreement which provided, among others, the following:

1. That in connection with the pending Petition for Direct Certification filed by
the Labor Congress with the DOLE, Management of the Empire Food Products
has no objection [to] the direct certification of the LCP Labor Congress and is
now recognizing the Labor Congress of the Philippines (LCP) and its Local
Chapter as the SOLE and EXCLUSIVE Bargaining Agent and Representative
for all rank and file employees of the Empire Food Products regarding
"WAGES, HOURS Of WORK, AND OTHER TERMS AND CONDITIONS OF
EMPLOYMENT;"

2. That with regards [sic] to NLRC CASE NO. RAB-III-10-1817-90 pending with
the NLRC parties jointly and mutually agreed that the issues thereof, shall be
discussed by the parties and resolve[d] during the negotiation of the
Collective Bargaining Agreement;

3. That Management of the Empire Food Products shall make the proper
adjustment of the Employees Wages within fifteen (15) days from the signing
of this Agreement and further agreed to register all the employees with the
SSS;

4. That Employer, Empire Food Products thru its Management agreed to

deduct thru payroll deduction UNION DUES and other Assessment[s] upon
submission by the LCP Labor Congress individual Check-Off Authorization[s]
signed by the Union Members indicating the amount to be deducted and
further agreed all deduction[s] made representing Union Dues and
Assessment[s] shall be remitted immediately to the LCP Labor Congress
Treasurer or authorized representative within three (3) or five (5) days upon
deductions [sic], Union dues not deducted during the period due, shall be
refunded or reimbursed by the Employer/Management.
Employer/Management further agreed to deduct Union dues from non-union
members the same amount deducted from union members without need of
individual Check-Off Authorizations [for] Agency Fee;

5. That in consideration [of] the foregoing covenant, parties jointly and

mutually agreed that NLRC CASE NO. RAB-III-10-1817-90 shall be considered
provisionally withdrawn from the Calendar of the National Labor Relations
Commission (NLRC), while the Petition for direct certification of the LCP Labor
Congress parties jointly move for the direct certification of the LCP Labor
Congress;

6. That parties jointly and mutually agreed that upon signing of this
Agreement, no Harassments [sic], Threats, Interferences [sic] of their
respective rights under the law, no Vengeance or Revenge by each partner
nor any act of ULP which might disrupt the operations of the business;

7. Parties jointly and mutually agreed that pending negotiations or

formalization of the propose[d] CBA, this Memorandum of Agreement shall
govern the parties in the exercise of their respective rights involving the
Management of the business and the terms and condition[s] of employment,
and whatever problems and grievances may arise by and between the
parties shall be resolved by them, thru the most cordial and good
harmonious relationship by communicating the other party in writing
indicating said grievances before taking any action to another forum or
government agencies;

8. That parties [to] this Memorandum of Agreement jointly and mutually

agreed to respect, abide and comply with all the terms and conditions hereof.
Further agreed that violation by the parties of any provision herein shall
constitute an act of ULP. (Annex "A" of Petition).

In an Order dated October 24, 1990, Mediator Arbiter Antonio Cortez

approved the memorandum of agreement and certified LCP "as the sole and
exclusive bargaining agent among the rank-and-file employee of Empire
Food Products for purposes of collective bargaining with respect to wages,
hours of work and other terms and conditions of employment" (Annex "B" of
Petition).

On November 9, 1990, petitioners through LCP President Navarro submitted

to private respondents a proposal for collective bargaining (Annex "C" of
Petition).

On January 23, 1991, petitioners filed a complaint docketed as NLRC Case

No. RAB-III-01-1964-91 against private respondents for:

a. Unfair Labor Practice by way of Illegal Lockout and/or Dismissal;

b. Union busting thru Harassments [sic], threats, and interfering with the
rights of employees to self-organization;

c. Violation of the Memorandum of Agreement dated October 23, 1990;

d. Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727,
such as Wages promulgated by the Regional Wage Board;

e. Actual, Moral and Exemplary Damages. (Annex "D" of Petition)

After the submission by the parties of their respective position papers and
presentation of testimonial evidence, Labor Arbiter Ariel C. Santos absolved
private respondents of the charges of unfair labor practice, union busting,
violation of the memorandum of agreement, underpayment of wages and
 denied petitioners' prayer for actual, moral and exemplary damages. Labor
Arbiter Santos, however, directed the reinstatement of the individual
complainants:

The undersigned Labor Arbiter is not oblivious to the fact that

respondents have violated a cardinal rule in every establishment
that a payroll and other papers evidencing hours of work,
payments, etc. shall always be maintained and subjected to
inspection and visitation by personnel of the Department of
Labor and Employment. As such penalty, respondents should not
escape liability for this technicality, hence, it is proper that all
individual complainants except those who resigned and executed
quitclaim[s] and releases prior to the filing of this
complaint should be reinstated to their former position[s] with
the admonition to respondents that any harassment,
intimidation, coercion or any form of threat as a result of this
immediately executory reinstatement shall be dealt with
accordingly.

SO ORDERED. (Annex "G" of petition)

On appeal, the National Labor Relations Commission vacated the Decision dated April 14,
1972 [sic] and remanded the case to the Labor Arbiter for further proceedings for the
following reasons:

The Labor Arbiter, through his decision, noted that ". . . complainant did not
present any single witness while respondent presented four (4) witnesses in
the persons of Gonzalo Kehyeng, Orlando Cairo, Evelyn Kehyeng and Elvira
Bulagan . . ." (p. 183, Records), that ". . . complainant before the National
Labor Relations Commission must prove with definiteness and clarity the
offense charged. . . ." (Record, p. 183); that ". . . complainant failed to specify
under what provision of the Labor Code particularly Art. 248 did respondents
violate so as to constitute unfair labor practice . . ." (Record, p. 183); that
"complainants failed to present any witness who may describe in what
manner respondents have committed unfair labor practice . . ." (Record, p.
185); that ". . . complainant LCP failed to present anyone of the so-called 99
complainants in order to testify who committed the threats and intimidation .
. ." (Record, p. 185).

Upon review of the minutes of the proceedings on record, however, it

appears that complainant presented witnesses, namely, BENIGNO NAVARRO,
JR. (28 February 1991, RECORD, p. 91; 8 March 1991, RECORD, p. 92, who
adopted its POSITION PAPER AND CONSOLIDATED AFFIDAVIT, as Exhibit "A"
and the annexes thereto as Exhibit "B", "B-1" to "B-9", inclusive. Minutes of
the proceedings on record show that complainant further presented other
witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD,
p. 93; LOURDES PANTILLO, MARIFE PINLAC, LENIE GARCIA (16 April 1991,
Record, p. 96, see back portion thereof ; 2 May 1991, Record, p. 102; 16 May
1991, Record, p. 103, 11 June 1991, Record, p. 105). Formal offer of
Documentary and Testimonial Evidence was made by complainant on June
24, 1991 (Record, p. 106-109)

The Labor Arbiter must have overlooked the testimonies of some of the
individual complainants which are now on record. Other individual
complainants should have been summoned with the end in view of receiving
their testimonies. The complainants should be afforded the time and
opportunity to fully substantiate their claims against the respondents.
Judgment should be rendered only based on the conflicting positions of the
parties. The Labor Arbiter is called upon to consider and pass upon the issues
of fact and law raised by the parties.

Toward this end, therefore, it is Our considered view [that] the case should
be remanded to the Labor Arbiter of origin for further proceedings. (Annex
"H" of Petition)
In a Decision dated July 27, 1994, Labor Arbiter Santos made the following
determination:

Complainants failed to present with definiteness and clarity the particular act
or acts constitutive of unfair labor practice.

It is to be borne in mind that a declaration of unfair labor practice connotes a

finding of prima facie evidence of probability that a criminal offense may
have been committed so as to warrant the filing of a criminal information
before the regular court. Hence, evidence which is more than a scintilla is
required in order to declare respondents/employers guilty of unfair labor
practice. Failing in this regard is fatal to the cause of complainants. Besides,
even the charge of illegal lockout has no leg to stand on because of the
testimony of respondents through their guard Orlando Cairo (TSN, July 31,
1991 hearing; p. 5-35) that on January 21, 1991, complainants refused and
failed to report for work, hence guilty of abandoning their post without
permission from respondents. As a result of complainants['] failure to report
for work, the cheese curls ready for repacking were all spoiled to the
prejudice of respondents. Under cross-examination, complainants failed to
rebut the authenticity of respondents' witness testimony.

As regards the issue of harassments [sic], threats and interference with the
rights of employees to self-organization which is actually an ingredient of
unfair labor practice, complainants failed to specify what type of threats or
intimidation was committed and who committed the same. What are the acts
or utterances constitutive of harassments [sic] being complained of? These
are the specifics which should have been proven with definiteness and clarity
by complainants who chose to rely heavily on its position paper through
generalizations to prove their case.

Insofar as violation of [the] Memorandum of Agreement dated October 23,

1990 is concerned, both parties agreed that:

2 That with regards [sic] to the NLRC Case No. RAB III-10-1817-
90 pending with the NLRC, parties jointly and mutually agreed
that the issues thereof shall be discussed by the parties and
resolve[d] during the negotiation of the CBA.

The aforequoted provision does not speak of [an] obligation on the part of
respondents but on a resolutory condition that may occur or may not
happen. This cannot be made the basis of an imposition of an obligation over
which the National Labor Relations Commission has exclusive jurisdiction
thereof.

Anent the charge that there was underpayment of wages, the evidence
points to the contrary. The enumeration of complainants' wages in their
consolidated Affidavits of merit and position paper which implies
underpayment has no leg to stand on in the light of the fact that
complainants' admission that they are piece workers or paid on
a pakiao [basis] i.e. a certain amount for every thousand pieces of cheese
curls or other products repacked. The only limitation for piece workers
or pakiao workers is that they should receive compensation no less than the
minimum wage for an eight (8) hour work [sic]. And compliance therewith
was satisfactorily explained by respondent Gonzalo Kehyeng in his testimony
(TSN, p. 12-30) during the July 31, 1991 hearing. On cross-examination,
complainants failed to rebut or deny Gonzalo Kehyeng's testimony that
complainants have been even receiving more than the minimum wage for an
average workers [sic]. Certainly, a lazy worker earns less than the minimum
wage but the same cannot be attributable to respondents but to the lazy
workers.

Finally, the claim for moral and exemplary damages has no leg to stand on
when no malice, bad faith or fraud was ever proven to have been
perpetuated by respondents.
 WHEREFORE, premises considered, the complaint is hereby DISMISSED for
utter lack of merit. (Annex "I" of Petition). 4

On appeal, the NLRC, in its Resolution dated 29 March 1995, 5 affirmed in toto the
decision of Labor Arbiter Santos. In so doing, the NLRC sustained the Labor Arbiter's
findings that: (a) there was a dearth of evidence to prove the existence of unfair labor
practice and union busting on the part of private respondents; (b) the agreement of 23
October 1990 could not be made the basis of an obligation within the ambit of the
NLRC's jurisdiction, as the provisions thereof, particularly Section 2, spoke of a resolutory
condition which could or could not happen; (c) the claims for underpayment of wages
were without basis as complainants were admittedly "pakiao" workers and paid on the
basis of their output subject to the lone limitation that the payment conformed to the
minimum wage rate for an eight-hour workday; and (d) petitioners were not underpaid.

Their motion for reconsideration having been denied by the NLRC in its Resolution of 31
October 1995, 6 petitioners filed the instant special civil action for certiorari raising the
following issues:

WHETHER OR NOT THE PUBLIC RESPONDENT NATIONAL LABOR RELATIONS

COMMISSION GRAVELY ABUSED ITS DISCRETION WHEN IT DISREGARDED OR
IGNORED NOT ONLY THE EVIDENCE FAVORABLE TO HEREIN PETITIONERS,
APPLICABLE JURISPRUDENCE BUT ALSO ITS OWN DECISIONS AND THAT OF
THIS HONORABLE HIGHEST TRIBUNAL WHICH [WAS] TANTAMOUNT NOT ONLY
TO THE DEPRIVATION OF PETITIONERS' RIGHT TO DUE PROCESS BUT WOULD
RESULT [IN] MANIFEST INJUSTICE.

II

WHETHER OR NOT THE PUBLIC RESPONDENT GRAVELY ABUSED ITS

DISCRETION WHEN IT DEPRIVED THE PETITIONERS OF THEIR
CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION, SECURITY OF TENURE,
PROTECTION TO LABOR, JUST AND HUMANE CONDITIONS OF WORK AND DUE
PROCESS.

III

WHETHER OR NOT THE PETITIONERS WERE ILLEGALLY EASED OUT [OF] OR

CONSTRUCTIVELY DISMISSED FROM THEIR ONLY MEANS OF LIVELIHOOD.

IV

WHETHER OR NOT PETITIONERS SHOULD BE REINSTATED FROM THE DATE

OF THEIR DISMISSAL UP TO THE TIME OF THEIR REINSTATEMENT, WITH
BACKWAGES, STATUTORY BENEFITS, DAMAGES AND ATTORNEY'S FEES. 7

We required respondents to file their respective Comments.

In their Manifestation and Comment, private respondents asserted that the petition was
filed out of time. As petitioners admitted in their Notice to File Petition for Review
on Certiorari that they received a copy of the resolution (denying their motion for
reconsideration) on 13 December 1995, they had only until 29 December 1995 to file the
petition. Having failed to do so, the NLRC thus already entered judgment in private
respondents' favor.

In their Reply, petitioners averred that Mr. Navarro, a non-lawyer who filed the notice to
file a petition for review on their behalf, mistook which reglementary period to apply.
Instead of using the "reasonable time" criterion for certiorari under Rule 65, he used the
15-day period for petitions for review on certiorari under Rule 45. They hastened to add
that such was a mere technicality which should not bar their petition from being decided
on the merits in furtherance of substantial justice, especially considering that
respondents neither denied nor contradicted the facts and issues raised in the petition.

In its Manifestation and Motion in Lieu of Comment, the Office of the Solicitor General
(OSG) sided with petitioners. It pointed out that the Labor Arbiter, in finding that
petitioners abandoned their jobs, relied solely on the testimony of Security Guard
Rolando Cairo that petitioners refused to work on 21 January 1991, resulting in the
spoilage of cheese curls ready for repacking. However, the OSG argued, this refusal to
report for work for a single day did not constitute abandonment, which pertains to a
clear, deliberate and unjustified refusal to resume employment, and not mere absence.
In fact, the OSG stressed, two days after allegedly abandoning their work, petitioners
filed a complaint for, inter alia, illegal lockout or illegal dismissal. Finally, the OSG
questioned the lack of explanation on the part of Labor Arbiter Santos as to why he
abandoned his original decision to reinstate petitioners.

In view of the stand of the OSG, we resolved to require the NLRC to file its own
Comment.

In its Comment, the NLRC invokes the general rule that factual findings of an
administrative agency bind a reviewing court and asserts that this case does not fall
under the exceptions. The NLRC further argues that grave abuse of discretion may not be
imputed to it, as it affirmed the factual findings and legal conclusions of the Labor Arbiter
only after carefully reviewing, weighing and evaluating the evidence in support thereof,
as well as the pertinent provisions of law and jurisprudence.

In their Reply, petitioners claim that the decisions of the NLRC and the Labor Arbiter were
not supported by substantial evidence; that abandonment was not proved; and that
much credit was given to self-serving statements of Gonzalo Kehyeng, owner of Empire
Foods, as to payment of just wages.

On 7 July 1997, we gave due course to the petition and required the parties to file their
respective memoranda. However, only petitioners and private respondents filed their
memoranda, with the NLRC merely adopting its Comment as its Memorandum.

We find for petitioners.

Invocation of the general rule that factual findings of the NLRC bind this Court is
unavailing under the circumstances. Initially, we are unable to discern any compelling
reason justifying the Labor Arbiter's volte face from his 14 April 1992 decision reinstating
petitioners to his diametrically opposed 27 July 1994 decision, when in both instances, he
had before him substantially the same evidence. Neither do we find the 29 March 1995
NLRC resolution to have sufficiently discussed the facts so as to comply with the
standard of substantial evidence. For one thing, the NLRC confessed its reluctance to
inquire into the veracity of the Labor Arbiter's factual findings, staunchly declaring that it
was "not about to substitute [its] judgment on matters that are within the province of the
trier of facts." Yet, in the 21 July 1992 NLRC resolution, 8 it chastised the Labor Arbiter for
his errors both in judgment and procedure; for which reason it remanded the records of
the case to the Labor Arbiter for compliance with the pronouncements therein.

What cannot escape from our attention is that the Labor Arbiter did not heed the
observations and pronouncements of the NLRC in its resolution of 21 July 1992, neither
did he understand the purpose of the remand of the records to him. In said resolution,
the NLRC summarized the grounds for the appeal to be:

1. that there is a prima facie evidence of abuse of discretion and acts of

gross incompetence committed by the Labor Arbiter in rendering the
decision.

2. that the Labor Arbiter in rendering the decision committed serious errors
in the findings of facts.

After which, the NLRC observed and found:

Complainant alleged that the Labor Arbiter disregarded the testimonies of

the 99 complainants who submitted their Consolidated Affidavit of Merit and
Position Paper which was adopted as direct testimonies during the hearing
and cross-examined by respondents' counsel.

The Labor Arbiter, through his decision, noted that ". . . complainant did not
present any single witness while respondent presented four (4) witnesses in
the persons of Gonzalo Kehyeng, Orlando Cairo, Evelyn Kehyeng and Elvira
Bulagan . . ." (Records, p. 183), that ". . . complainant before the National
Labor Relations Commission must prove with definiteness and clarity the
offense charged. . . ." (Record, p. 183; that ". . . complainant failed to specify
under what provision of the Labor Code particularly Art. 248 did respondents
violate so as to constitute unfair labor practice . . ." (Record, p. 183); that
"complainants failed to present any witness who may describe in what
manner respondents have committed unfair labor practice . . ." (Record, p.
185); that ". . . complainant a [sic] LCP failed to present anyone of the so
called 99 complainants in order to testify who committed the threats and
intimidation . . ." (Record, p.185).

Upon review of the minutes of the proceedings on record, however, it

appears that complainant presented witnesses, namely BENIGNO NAVARRO,
JR. (28 February 1991, RECORD, p. 91; 8 March 1991, RECORD, p. 92), who
adopted its POSITION PAPER AND CONSOLIDATED AFFIDAVIT as Exhibit A and
the annexes thereto as Exhibit B, B-1 to B-9, inclusive. Minutes of the
proceedings on record show that complainant further presented other
witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD, p. 93;
LOURDES PANTILLO, MARIFE PINLAC, LENI GARCIA (16 April 1991, Record, p.
96, see back portion thereof; 2 May 1991, Record, p. 102; 16 May 1991,
Record, p. 103; 11 June 1991, Record, p. 105). Formal offer of Documentary
and Testimonial Evidence was made by the complainant on June 24, 1991
(Record, p.106-109).

The Labor Arbiter must have overlooked the testimonies of some of the
individual complainants which are now on record. Other individual
complainants should have been summoned with the end in view of receiving
their testimonies. The complainants should [have been] afforded the time
and opportunity to fully substantiate their claims against the respondents.
Judgment should [have been] rendered only based on the conflicting
positions of the parties. The Labor Arbiter is called upon to consider and pass
upon the issues of fact and law raised by the parties.

Toward this end, therefore, it is Our considered view the case should be
remanded to the Labor Arbiter of origin for further proceedings.

Further, We take note that the decision does not contain a dispositive portion
or fallo. Such being the case, it may be well said that the decision does not
resolve the issues at hand. On another plane, there is no portion of the
decision which could be carried out by way of execution.

It may be argued that the last paragraph of the decision may be categorized
as the dispositive portion thereof:

xxx xxx xxx

The undersigned Labor Arbiter is not oblivious [to] the fact that
respondents have violated a cardinal rule in every establishment
that a payroll and other papers evidencing hour[s] of work,
payment, etc. shall always be maintained and subjected to
inspection and visitation by personnel of the Department of
Labor and Employment. As such penalty, respondents should not
escape liability for this technicality, hence, it is proper that all the
individual complainants except those who resigned and executed
quitclaim[s] and release[s] prior to the filing of this complaint
should be reinstated to their former position with the admonition
to respondents that any harassment, intimidation, coercion or
any form of threat as a result of this immediately executory
reinstatement shall be dealt with accordingly.

SO ORDERED.

It is Our considered view that even assuming arguendo that the respondents
failed to maintain their payroll and other papers evidencing hours of work,
payment etc., such circumstance, standing alone, does not warrant the
directive to reinstate complainants to their former positions. It is [a] well
 settled rule that there must be a finding of illegal dismissal before
reinstatement be mandated.

In this regard, the LABOR ARBITER is hereby directed to include in his

clarificatory decision, after receiving evidence, considering and resolving the
same, the requisite dispositive portion. 9

Apparently, the Labor Arbiter perceived that if not for petitioners, he would not have
fallen victim to this stinging rebuke at the hands of the NLRC. Thus does it appear to us
that the Labor Arbiter, in concluding in his 27 July 1994 Decision that petitioners
abandoned their work, was moved by, at worst, spite, or at best, lackadaisically glossed
over petitioner's evidence. On this score, we find the following observations of the OSG
most persuasive:

In finding that petitioner employees abandoned their work, the Labor Arbiter
and the NLRC relied on the testimony of Security Guard Rolando Cairo that
on January 21, 1991, petitioners refused to work. As a result of their failure to
work, the cheese curls ready for repacking on said date were spoiled.

The failure to work for one day, which resulted in the spoilage of cheese curls
does not amount to abandonment of work. In fact two (2) days after the
reported abandonment of work or on January 23, 1991, petitioners filed a
complaint for, among others, unfair labor practice, illegal lockout and/or
illegal dismissal. In several cases, this Honorable Court held that "one could
not possibly abandon his work and shortly thereafter vigorously pursue his
complaint for illegal dismissal (De Ysasi III v. NLRC, 231 SCRA 173; Ranara v.
NLRC, 212 SCRA 631; Dagupan Bus Co. v. NLRC, 191 SCRA 328; Atlas
Consolidated Mining and Development Corp. v. NLRC, 190 SCRA 505; Hua
Bee Shirt Factory v. NLRC, 186 SCRA 586; Mabaylan v. NLRC, 203 SCRA 570
and Flexo Manufacturing v. NLRC, 135 SCRA 145). In Atlas Consolidated,
supra, this Honorable Court explicitly stated:

It would be illogical for Caballo, to abandon his work and then

immediately file an action seeking for his reinstatement. We can
not believe that Caballo, who had worked for Atlas for two years
and ten months, would simply walk away from his job unmindful
of the consequence of his act. i.e. the forfeiture of his accrued
employment benefits. In opting to finally to [sic] contest the
legality of his dismissal instead of just claiming his separation
pay and other benefits, which he actually did but which proved to
be futile after all, ably supports his sincere intention to return to
work, thus negating Atlas' stand that he had abandoned his job.

In De Ysasi III v. NLRC (supra), this Honorable Court stressed that it is the
clear, deliberate and unjustified refusal to resume employment and not mere
absence that constitutes abandonment. The absence of petitioner employees
for one day on January 21, 1991 as testified [to] by Security Guard Orlando
Cairo did not constitute abandonment.

In his first decision, Labor Arbiter Santos expressly directed the

reinstatement of the petitioner employees and admonished the private
respondents that "any harassment, intimidation, coercion or any form of
threat as a result of this immediately executory reinstatement shall be dealt
with accordingly.

In his second decision, Labor Arbiter Santos did not state why he was
abandoning his previous decision directing the reinstatement of petitioner
employees.

By directing in his first decision the reinstatement of petitioner employees,

the Labor Arbiter impliedly held that they did not abandon their work but
were not allowed to work without just cause.

That petitioner employees are "pakyao" or piece workers does not imply that
they are not regular employees entitled to reinstatement. Private respondent
Empire Food Products, Inc. is a food and fruit processing company. In Tabas
 v. California Manufacturing Co., Inc. (169 SCRA 497), this Honorable Court
held that the work of merchandisers of processed food, who coordinate with
grocery stores and other outlets for the sale of the processed food is
necessary in the day-to-day operation[s] of the company. With more reason,
the work of processed food repackers is necessary in the day-to-day
operation[s] of respondent Empire Food Products. 10

It may likewise be stressed that the burden of proving the existence of just cause for
dismissing an employee, such as abandonment, rests on the employer, 11 a burden
private respondents failed to discharge.

Private respondents, moreover, in considering petitioners' employment to have been

terminated by abandonment, violated their rights to security of tenure and constitutional
right to due process in not even serving them with a written notice of such
termination. 12 Section 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor
Code provides:

Sec. 2. Notice of Dismissal Any employer who seeks to dismiss a worker

shall furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal. In cases of abandonment of work,
the notice shall be served at the worker's last known address.

Petitioners are therefore entitled to reinstatement with full back wages pursuant to
Article 279 of the Labor Code, as amended by R.A. No. 6715. Nevertheless, the records
disclose that taking into account the number of employees involved, the length of time
that has lapsed since their dismissal, and the perceptible resentment and enmity
between petitioners and private respondents which necessarily strained their
relationship, reinstatement would be impractical and hardly promotive of the best
interests of the parties. In lieu of reinstatement then, separation pay at the rate of one
month for every year of service, with
a fraction of at least six (6) months of service considered as one (1) year, is in order. 13

That being said, the amount of back wages to which each petitioner is entitled, however,
cannot be fully settled at this time. Petitioners, as piece-rate workers having been paid
by the piece, 14 there is need to determine the varying degrees of production and days
worked by each worker. Clearly, this issue is best left to the National Labor Relations
Commission.

As to the other benefits, namely, holiday pay, premium pay, 13th month pay and service
incentive leave which the labor arbiter failed to rule on but which petitioners prayed for
in their complaint, 15 we hold that petitioners are so entitled to these benefits. Three (3)
factors lead us to conclude that petitioners, although piece-rate workers, were regular
employees of private respondents. First, as to the nature of petitioners' tasks, their job of
repacking snack food was necessary or desirable in the usual business of private
respondents, who were engaged in the manufacture and selling of such food products;
second, petitioners worked for private respondents throughout the year, their
employment not having been dependent on a specific project or season; and third, the
length of time 16 that petitioners worked for private respondents. Thus, while petitioners'
mode of compensation was on a "per piece basis," the status and nature of their
employment was that of regular employees.

The Rules Implementing the Labor Code exclude certain employees from receiving
benefits such as nighttime pay, holiday pay, service incentive leave 17 and 13th month
pay, 18 inter alia, "field personnel and other employees whose time and 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." Plainly, petitioners
as piece-rate workers do not fall within this group. As mentioned earlier, not only did
petitioners labor under the control of private respondents as their employer, likewise did
petitioners toil throughout the year with the fulfillment of their quota as supposed basis
for compensation. Further, in Section 8 (b), Rule IV, Book III which we quote hereunder,
piece workers are specifically mentioned as being entitled to holiday pay.

Sec. 8. Holiday pay of certain employees.

 (b) Where a covered employee is paid by results or
output, such as payment on piece work, his holiday
pay shall not be less than his average daily earnings
for the last seven (7) actual working days preceding
the regular holiday: Provided, however, that in no
case shall the holiday pay be less than the applicable
statutory minimum wage rate.

In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law, in
view of the modifications to P.D. No. 851 19 by Memorandum Order No. 28, clearly
exclude the employer of piece rate workers from those exempted from paying 13th
month pay, to wit:

2. EXEMPTED EMPLOYERS

The following employers are still not covered by P.D. No. 851:

d. Employers of those who are paid on purely

commission, boundary or task basis, and those who
are paid a fixed amount for performing specific work,
irrespective of the time consumed in the
performance thereof, except where the workers are
paid on piece-rate basis in which case the employer
shall grant the required 13th month pay to such
workers. (emphasis supplied)

The Revised Guidelines as well as the Rules and Regulations identify those workers
who fall under the piece-rate category as those who are paid a standard amount
for every piece or unit of work produced that is more or less regularly replicated,
without regard to the time spent in producing the same. 20

As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I, Book
III of the Implementing Rules, workers who are paid by results including those who are
paid on piece-work, takay, pakiao, or task basis, if their output rates are in accordance
with the standards prescribed under Sec. 8, Rule VII, Book III, of these regulations, or
where such rates have been fixed by the Secretary of Labor in accordance with the
aforesaid section, are not entitled to receive overtime pay. Here, private respondents did
not allege adherence to the standards set forth in Sec. 8 nor with the rates prescribed by
the Secretary of Labor. As such, petitioners are beyond the ambit of exempted persons
and are therefore entitled to overtime pay. Once more, the National Labor Relations
Commission would be in a better position to determine the exact amounts owed
petitioners, if any.

As to the claim that private respondents violated petitioners' right to self-organization,

the evidence on record does not support this claim. Petitioners relied almost entirely on
documentary evidence which, per se, did not prove any wrongdoing on private
respondents' part. For example, petitioners presented their complaint 21 to prove the
violation of labor laws committed by private respondents. The complaint, however, is
merely "the pleading alleging the plaintiff's cause or causes of action." 22 Its contents are
merely allegations, the verity of which shall have to be proved during the trial. They
likewise offered their Consolidated Affidavit of Merit and Position Paper 23 which, like the
offer of their Complaint, was a tautological exercise, and did not help nor prove their
cause. In like manner, the petition for certification election 24 and the subsequent order
of certification 25 merely proved that petitioners sought and acquired the status of
bargaining agent for all rank-and-file employees. Finally, the existence of the
memorandum of agreement 26 offered to substantiate private respondents' non-
compliance therewith, did not prove either compliance or non-compliance, absent
evidence of concrete, overt acts in contravention of the provisions of the memorandum.

IN VIEW WHEREOF, the instant petition is hereby GRANTED. The Resolution of the
National Labor Relations Commission of 29 March 1995 and the Decision of the Labor
Arbiter of 27 July 1994 in NLRC Case No. RAB-III-01-1964-91 are hereby SET ASIDE, and
another is hereby rendered:

1. DECLARING petitioners to have been illegally dismissed by

private respondents, thus entitled to full back wages and other
 privileges, and separation pay in lieu of reinstatement at the rate
of one month's salary for every year of service with a fraction of
six months of service considered as one year;

2. REMANDING the records of this case to the National Labor

Relations Commission for its determination of the back wages
and other benefits and separation pay, taking into account the
foregoing observations; and

3. DIRECTING the National Labor Relations Commission to resolve

the referred issues within sixty (60) days from its receipt of a
copy of this decision and of the records of the case and to submit
to this Court a report of its compliance hereof within ten (10)
days from the rendition of its resolution.

Costs against private respondents.

SO ORDERED.

Davide, Jr., Bellosillo, Vitug, Panganiban and Quisumbing, JJ., concur.

Footnotes

1 Annex "J" of Petition. Per Commissioner Tanodra, J., with Presiding

Commissioner Javier, L., and Commissioner Bernardo, I., concurring; Rollo,
98-108.

2 Annex "I" of Petition, Rollo, 91-97.

3 Rollo, 137 et seq.

4 Rollo, 138-148.

5 Supra note 1.

6 Rollo, 109-110.

7 Id., 21-22.

8 Annex "H" of Petition, Id, 85-90. Per Commissioner Rayala, R.I., with
Commissioners Javier, L,. and Bernardo, I., concurring.

9 Rollo, 86-90.

10 Rollo, 150-153.

11 Lim v. NLRC, 259 SCRA 485, 497 [1996]; Metro Transit Organization, Inc.,
263 SCRA 3163, 321 [1996]; De la Cruz v. NLRC, 268 SCRA 458, 468 [1997].

12 See Tiu v. NLRC, 215 SCRA 540, 550-552 [1992]; Radio Communications
of the Phils. V. NLRC, 223 SCRA 656, 667-668 [1993].

13 Globe-Mackay Cable and Radio Corp. v. NLRC, 206 SCRA 701, 709-710
[1992]; Kathy-O Enterprises v. NLRC, G.R. No. 117610, 2 March 1998.

14 See Dy Keh Beng v. International Labor, 90 SCRA 161 [1979];

"Brotherhood" Unity Movement of the Phils. v. Zamora, 147 SCRA 49 (1987).

15 Rollo, 51.

16 RJL Mariner Fishing Corp. v. NLRC, 127 SCRA 454, 462 [1984].

17 Section 1 (e), Rule II, Sec. 1(e) Rule IV and Sec. 1(d), Rule V of Book II.

18 P.D. No. 851, as modified by Memorandum No. 28.

 19 Requiring All Employers To Pay Their Employees A [sic] 13TH-MONTH PAY.

20 This distinction was also used in Sec. 3(e) Rules and Regulations
Implementing P.D. 851.

21 Exhibit "C", OR, 42-43.

22 Section 3, Rule 6, Revised Rules of Court.

23 Exhibit "J", OR, 56-78.

24 Exhibit "D", Id, 44-45.

25 Exhibit "F", Id., 50.

26 Exhibit "E", Id., 46-49.

G.R. No. 132805 February 2, 1999

PHILIPPINE AIRLINES, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ROMULUS
PROTACIO and DR. HERMINIO A. FABROS, respondents.

PUNO, J.:

Petitioner Philippine Airlines, Inc. assails the decision of the National Labor Relations
Commission dismissing its appeal from the decision of Labor Arbiter Romulus S. Protacio
which declared the suspension of private respondent Dr. Herminio A. Fabros illegal and
ordered petitioner to pay private respondent the amount equivalent to all the benefits he
should have received during his period of suspension plus P500,000.00 moral damages.

The facts are as follow:

Private respondent was employed as flight surgeon at petitioner company. He was

assigned at the PAL Medical Clinic at Nichols and was on duty from 4:00 in the afternoon
until 12:00 midnight.

On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic to
have his dinner at his residence, which was about five-minute drive away. A few minutes
later, the clinic received an emergency call from the PAL Cargo Services. One of its
employees, Mr. Manuel Acosta, had suffered a heart attack. The nurse on duty, Mr.
Merlino Eusebio, called private respondent at home to inform him of the emergency. The
patient arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately rushed
him to the hospital. When private respondent reached the clinic at around 7:51 in the
evening, Mr. Eusebio had already left with the patient. Mr. Acosta died the following day.

Upon learning about the incident, PAL Medical Director Dr. Godofredo B. Banzon ordered
the Chief Flight Surgeon to conduct an investigation. The Chief Flight Surgeon, in turn,
required private respondent to explain why no disciplinary sanction should be taken
against him.

In his explanation, private respondent asserted that he was entitled to a thirty-minute

meal break; that he immediately left his residence upon being informed by Mr. Eusebio
about the emergency and he arrived at the clinic a few minutes later; that Mr. Eusebio
panicked and brought the patient to the hospital without waiting for him.

Finding private respondent's explanation unacceptable, the management charged

private respondent with abandonment of post while on duty. He was given ten days to
submit a written answer to the administrative charge.

In his answer, private respondent reiterated the assertions in his previous explanation.
He further denied that he abandoned his post on February 17, 1994. He said that he only
left the clinic to have his dinner at home. In fact, he returned to the clinic at 7:51 in the
evening upon being informed of the emergency.

After evaluating the charge as well as the answer of private respondent, petitioner
company decided to suspend private respondent for three months effective December
16, 1994.

Private respondent filed a complaint for illegal suspension against petitioner.

On July 16, 1996, Labor Arbiter Romulus A. Protasio rendered a decision 1 declaring the
suspension of private respondent illegal. It also ordered petitioner to pay private
respondent the amount equivalent to all the benefits he should have received during his
period of suspension plus P500,000.00 moral damages. The dispositive portion of the
decision reads:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered

declaring the suspension of complainant as illegal, and ordering the
respondents the restitution to the complainant of all employment benefits
equivalent to his period of suspension, and the payment to the complainant
of P500,000.00 by way of moral damages. 2

Petitioner appealed to the NLRC. The NLRC, however, dismissed the appeal after finding
that the decision of the Labor Arbiter is supported by the facts on record and the law on
the matter. 3 The NLRC likewise denied petitioner's motion for reconsideration. 4

Hence, this petition raising the following arguments:

1. The public respondents acted without or in excess of their jurisdiction and with
grave abuse of discretion in nullifying the 3-month suspension of private
respondent despite the fact that the private respondent has committed an offense
that warranted the imposition of disciplinary action.
2. The public respondents acted without or in excess of their jurisdiction and with
grave abuse of discretion in holding the petitioner liable for moral damages:

(a) Despite the fact that no formal hearing whatsoever was conducted for complainant to
substantiate his claim;

(b) Despite the absence of proof that the petitioner acted in bad faith in imposing the 3-
month suspension; and

(c) Despite the fact that the Labor Arbiter's award of moral damages is highly irregular,
considering that it was more than what the private respondent prayed for. 5

We find that public respondents did not err in nullifying the three-month suspension of
private respondent. They, however, erred in awarding moral damages to private
respondent.

First, as regards the legality of private respondent's suspension. The facts do not support
petitioner's allegation that private respondent abandoned his post on the evening of
February 17, 1994. Private respondent left the clinic that night only to have his dinner at
his house, which was only a few minutes' drive away from the clinic. His whereabouts
were known to the nurse on duty so that he could be easily reached in case of
emergency. Upon being informed of Mr. Acosta's condition, private respondent
immediately left his home and returned to the clinic. These facts belie petitioner's claim
of abandonment.

Petitioner argues that being a full-time employee, private respondent is obliged to stay in
the company premises for not less than eight (8) hours. Hence, he may not leave the
company premises during such time, even to take his meals.

We are not impressed.

Art. 83 and 85 of the Labor Code read:

Art. 83. Normal hours of work. The normal hours of work of any employee
shall not exceed eight (8) hours a day.
 Health personnel in cities and municipalities with a population of at least one
million (1,000,000) or in hospitals and clinics with a bed capacity of at least
one hundred (100) shall hold regular office hours for eight (8) hours a day,
for five (5) days a week, exclusive of time for meals, except where the
exigencies of the service require that such personnel work for six (6) days or
forty-eight (48) hours, in which case they shall be entitled to an additional
compensation of at least thirty per cent (30%) of their regular wage for work
on the sixth day. For purposes of this Article, "health personnel" shall include:
resident physicians, nurses, nutritionists, dieticians, pharmacists, social
workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel. (emphasis
supplied)

Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor
may prescribe, it shall be the duty of every employer to give his employees
not less than sixty (60) minutes time-off for their regular meals.

Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:

Sec. 7. Meal and Rest Periods. Every employer shall give his employees,
regardless of sex, not less than one (1) hour time-off for regular meals,
except in the following cases when a meal period of not less than twenty (20)
minutes may be given by the employer provided that such shorter meal
period is credited as compensable hours worked of the employee;

(a) Where the work is non-manual work in nature or does not involve
strenuous physical exertion;

(b) Where the establishment regularly operates not less than sixteen hours a
day;

(c) In cases of actual or impending emergencies or there is urgent work to be

performed on machineries, equipment or installations to avoid serious loss
which the employer would otherwise suffer; and

(d) Where the work is necessary to prevent serious loss of perishable goods.

Rest periods or coffee breaks running from five (5) to twenty (20) minutes
shall be considered as compensable working time.

Thus, the eight-hour work period does not include the meal break. Nowhere in the law
may it be inferred that employees must take their meals within the company premises.
Employees are not prohibited from going out of the premises as long as they return to
their posts on time. Private respondent's act, therefore, of going home to take his dinner
does not constitute abandonment.

We now go to the award of moral damages to private respondent.

Not every employee who is illegally dismissed or suspended is entitled to damages. As a

rule, moral damages are recoverable only where the dismissal or suspension of the
employee was attended by bad faith or fraud, or constituted an act oppressive to labor,
or was done in a manner contrary to morals, good customs or public policy. 6Bad faith
does not simply mean negligence or bad judgment. It involves a state of mind dominated
by ill will or motive. It implies a conscious and intentional design to do a wrongful act for
a dishonest purpose or some moral obliquity. 7 The person claiming moral damages must
prove the existence of bad faith by clear and convincing evidence for the law always
presumes good faith. 8

In the case at bar, there is no showing that the management of petitioner company was
moved by some evil motive in suspending private respondent. It suspended private
respondent on an honest, albeit erroneous, belief that private respondent's act of leaving
the company premises to take his meal at home constituted abandonment of post which
warrants the penalty of suspension. Also, it is evident from the facts that petitioner gave
private respondent all the opportunity to refute the charge against him and to defend
himself. These negate the existence of bad faith on the part of petitioner. Under the
circumstances, we hold that private respondent is not entitled to moral damages.
IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The portion of the assailed
decision awarding moral damages to private respondent is DELETED. All other aspects of
the decision are AFFIRMED.

SO ORDERED.

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

Footnotes

1 Rollo, pp. 19-32.

2 Rollo, p 32.

3 Rollo, p. 43.

4 Rollo, p. 46.

5 Rollo, p. 8.

6 Ford Philippines, Inc. vs. Court of Appeals, 267 SCRA 320 (1997); Equitable
Banking Corporation vs. NLRC, 273 SCRA 352 (1997); Tumbiga vs. NLRC, 274 SCRA
338 (1997).

7 Ibid.; citing Far East Bank and Trust Co. vs. Court of Appeals, 241 SCRA 671
(1996).

8 Ibid.

G.R. No. 78210 February 28, 1989

TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO OMERTA,

GIL TANGIHAN, SAMUEL LABAJO, NESTOR NORBE, RODOLFO CONCEPCION,
RICARDO RICHA, RODOLFO NENO, ALBERTO BALATRO, BENJAMIN JUMAMOY,
FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL, RAMON ACENA, JAIME
BUGTAY, and 561 OTHERS, HEREIN REPRESENTED BY KORONADO B.
APUZEN, petitioners
vs.
NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON,
HONORABLE CONRADO B. MAGLAYA, HONORABLE ROSARIO B. ENCARNACION,
and STANDARD (PHILIPPINES) FRUIT CORPORATION, respondents.

Koronado B. Apuzen and Jose C. Espinas for petitioners.

The Solicitor General for public respondent.

Dominguez & Paderna Law Offices Co. for private respondent.

PARAS, J.:

This is a petition for review on certiorari of the decision of the National Labor Relations
Commission dated December 12, 1986 in NLRC Case No. 2327 MC-XI-84 entitled Teofilo
Arica et al. vs. Standard (Phil.) Fruits Corporation (STANFILCO) which affirmed the
decision of Labor Arbiter Pedro C. Ramos, NLRC, Special Task Force, Regional Arbitration
Branch No. XI, Davao City dismissing the claim of petitioners.

This case stemmed from a complaint filed on April 9, 1984 against private respondent
Stanfilco for assembly time, moral damages and attorney's fees, with the
aforementioned Regional Arbitration Branch No. XI, Davao City.

After the submission by the parties of their respective position papers (Annex "C", pp.
30-40; Annex "D", Rollo, pp. 41-50), Labor Arbiter Pedro C. Ramos rendered a decision
dated October 9, 1985 (Annex 'E', Rollo, pp. 51-58) in favor of private respondent
STANFILCO, holding that:
 Given these facts and circumstances, we cannot but agree with respondent
that the pronouncement in that earlier case, i.e. the thirty-minute assembly
time long practiced cannot be considered waiting time or work time and,
therefore, not compensable, has become the law of the case which can no
longer be disturbed without doing violence to the time- honored principle
of res-judicata.

WHEREFORE, in view of the foregoing considerations, the instant complaint

should therefore be, as it is hereby, DISMISSED.

SO ORDERED. (Rollo, p. 58)

On December 12, 1986, after considering the appeal memorandum of complainant and
the opposition of respondents, the First Division of public respondent NLRC composed of
Acting Presiding Commissioner Franklin Drilon, Commissioner Conrado Maglaya,
Commissioner Rosario D. Encarnacion as Members, promulgated its Resolution,
upholding the Labor Arbiters' decision. The Resolution's dispositive portion reads:

'Surely, the customary functions referred to in the above- quoted provision of

the agreement includes the long-standing practice and institutionalized non-
compensable assembly time. This, in effect, estopped complainants from
pursuing this case.

The Commission cannot ignore these hard facts, and we are constrained to
uphold the dismissal and closure of the case.

WHEREFORE, let the appeal be, as it is hereby dismissed, for lack of merit.

SO ORDERED. (Annex "H", Rollo, pp. 86-89).

On January 15, 1987, petitioners filed a Motion for Reconsideration which was opposed
by private respondent (Annex "I", Rollo, pp. 90-91; Annex J Rollo, pp. 92-96).

Public respondent NLRC, on January 30, 1987, issued a resolution denying for lack of
merit petitioners' motion for reconsideration (Annex "K", Rollo, p. 97).

Hence this petition for review on certiorari filed on May 7, 1987.

The Court in the resolution of May 4, 1988 gave due course to this petition.

Petitioners assign the following issues:

1) Whether or not the 30-minute activity of the petitioners before the

scheduled working time is compensable under the Labor Code.

2) Whether or not res judicata applies when the facts obtaining in the prior
case and in the case at bar are significantly different from each other in that
there is merit in the case at bar.

3) Whether or not there is finality in the decision of Secretary Ople in view of

the compromise agreement novating it and the withdrawal of the appeal.

4) Whether or not estoppel and laches lie in decisions for the enforcement of
labor standards (Rollo, p. 10).

Petitioners contend that the preliminary activities as workers of respondents STANFILCO

in the assembly area is compensable as working time (from 5:30 to 6:00 o'clock in the
morning) since these preliminary activities are necessarily and primarily for private
respondent's benefit.

These preliminary activities of the workers are as follows:

(a) First there is the roll call. This is followed by getting their individual work
assignments from the foreman.
 (b) Thereafter, they are individually required to accomplish the Laborer's
Daily Accomplishment Report during which they are often made to explain
about their reported accomplishment the following day.

(c) Then they go to the stockroom to get the working materials, tools and
equipment.

(d) Lastly, they travel to the field bringing with them their tools, equipment
and materials.

All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).

Contrary to this contention, respondent avers that the instant complaint is not new, the
very same claim having been brought against herein respondent by the same group of
rank and file employees in the case of Associated Labor Union and Standard Fruit
Corporation, NLRC Case No. 26-LS-XI-76 which was filed way back April 27, 1976 when
ALU was the bargaining agent of respondent's rank and file workers. The said case
involved a claim for "waiting time", as the complainants purportedly were required to
assemble at a designated area at least 30 minutes prior to the start of their scheduled
working hours "to ascertain the work force available for the day by means of a roll call,
for the purpose of assignment or reassignment of employees to such areas in the
plantation where they are most needed." (Rollo, pp. 64- 65)

Noteworthy is the decision of the Minister of Labor, on May 12, 1978 in the aforecited
case (Associated Labor Union vs. Standard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-
XI-76 where significant findings of facts and conclusions had already been made on the
matter.

The Minister of Labor held:

The thirty (30)-minute assembly time long practiced and institutionalized by

mutual consent of the parties under Article IV, Section 3, of the Collective
Bargaining Agreement cannot be considered as waiting time within the
purview of Section 5, Rule I, Book III of the Rules and Regulations
Implementing the Labor Code. ...

Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary

practice of the employees, and the proceedings attendant thereto are not
infected with complexities as to deprive the workers the time to attend to
other personal pursuits. They are not new employees as to require the
company to deliver long briefings regarding their respective work
assignments. Their houses are situated right on the area where the farm are
located, such that after the roll call, which does not necessarily require the
personal presence, they can go back to their houses to attend to some
chores. In short, they are not subject to the absolute control of the company
during this period, otherwise, their failure to report in the assembly time
would justify the company to impose disciplinary measures. The CBA does
not contain any provision to this effect; the record is also bare of any proof
on this point. This, therefore, demonstrates the indubitable fact that the
thirty (30)-minute assembly time was not primarily intended for the interests
of the employer, but ultimately for the employees to indicate their
availability or non-availability for work during every working day. (Annex "E",
Rollo, p. 57).

Accordingly, the issues are reduced to the sole question as to whether public respondent
National Labor Relations Commission committed a grave abuse of discretion in its
resolution of December 17, 1986.

The facts on which this decision was predicated continue to be the facts of the case in
this questioned resolution of the National Labor Relations Commission.

It is clear that herein petitioners are merely reiterating the very same claim which they
filed through the ALU and which records show had already long been considered
terminated and closed by this Court in G.R. No. L-48510. Therefore, the NLRC can not be
faulted for ruling that petitioners' claim is already barred by res-judicata.
Be that as it may, petitioners' claim that there was a change in the factual scenario
which are "substantial changes in the facts" makes respondent firm now liable for the
same claim they earlier filed against respondent which was dismissed. It is thus
axiomatic that the non-compensability of the claim having been earlier established,
constitute the controlling legal rule or decision between the parties and remains to be
the law of the case making this petition without merit.

As aptly observed by the Solicitor General that this petition is "clearly violative of the
familiar principle of res judicata. There will be no end to this controversy if the light of
the Minister of Labor's decision dated May 12, 1979 that had long acquired the character
of finality and which already resolved that petitioners' thirty (30)-minute assembly time
is not compensable, the same issue can be re-litigated again." (Rollo, p. 183)

This Court has held:

In this connection account should be taken of the cognate principle that res
judicata operates to bar not only the relitigation in a subsequent action of
the issues squarely raised, passed upon and adjudicated in the first suit, but
also the ventilation in said subsequent suit of any other issue which could
have been raised in the first but was not. The law provides that 'the
judgment or order is, with respect to the matter directly adjudged or as to
any other matter that could have been raised in relation thereto, conclusive
between the parties and their successors in interest by title subsequent to
the commencement of the action .. litigating for the same thing and in the
same capacity.' So, even if new causes of action are asserted in the second
action (e.g. fraud, deceit, undue machinations in connection with their
execution of the convenio de transaccion), this would not preclude the
operation of the doctrine of res judicata. Those issues are also barred, even if
not passed upon in the first. They could have been, but were not, there
raised. (Vda. de Buncio v. Estate of the late Anita de Leon, 156 SCRA 352
[1987]).

Moreover, as a rule, the findings of facts of quasi-judicial agencies which have acquired
expertise because their jurisdiction is confined to specific matters are accorded not only
respect but at times even finality if such findings are supported by substantial evidence
(Special Events & Central Shipping Office Workers Union v. San Miguel Corporation, 122
SCRA 557 [1983]; Dangan v. NLRC, 127 SCRA 706 [1984]; Phil. Labor Alliance Council v.
Bureau of Labor Relations, 75 SCRA 162 [1977]; Mamerto v. Inciong, 118 SCRA 265
(1982]; National Federation of Labor Union (NAFLU) v. Ople, 143 SCRA 124 [1986]; Edi-
Staff Builders International, Inc. v. Leogardo, Jr., 152 SCRA 453 [1987]; Asiaworld
Publishing House, Inc. v. Ople, 152 SCRA 219 [1987]).

The records show that the Labor Arbiters' decision dated October 9, 1985 (Annex "E",
Petition) pointed out in detail the basis of his findings and conclusions, and no cogent
reason can be found to disturb these findings nor of those of the National Labor Relations
Commission which affirmed the same.

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the decision of
the National Labor Relations Commission is AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur.

Separate Opinions

SARMIENTO, J., Dissenting:

It is my opinion that res judicata is not a bar.

The decision penned by then Minister Blas Ople in ALU v. STANFILCO (NLRC Case No. 26-
LS-XI-76) relied upon by the respondents as basis for claims of res judicata, is not, to my
mind, a controlling precedent. In that case, it was held that the thirty-minute "waiting
time" complained of was a mere "assembly time" and not a waiting time as the term is
known in law, and hence, a compensable hour of work. Thus:
 The thirty (30)-minute assembly time long practiced and institutionalized by
mutual consent of the parties under Article IV, Section 3, of the Collective
Bargaining Agreement cannot be considered as 'waiting time' within the
purview of Section 5, Rule 1, Book III of the Rules and Regulations
Implementing the Labor Code. ...

Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary

practice of the employees, and the proceedings attendant thereto are not
infected with complexities as to deprive the workers the time to attend to
other personal pursuits. They are not new employees as to require the
company to deliver long briefings regarding their respective work
assignments. Their houses are situated right on the area where the farms are
located, such that after the roll call, which does not necessarily require the
personal presence, they can go back to their houses to attend to some
chores.

In short, they are not subject to the absolute control of the company during
this period, otherwise, their failure to report in the assembly time would
justify the company to impose disciplinary measures. The CBA does not
contain any provision to this effect; the record is also bare of any proof on
this point. This, therefore, demonstrates the indubitable fact that the thirty
(30)-minute assembly time was not primarily intended for the interests of the
employer, but ultimately for the employees to indicate their availability or
non-availability for work during every working day. (Decision, 6.)

Precisely, it is the petitioners' contention that the assembly time in question had since
undergone dramatic changes, thus:

(a) First there is the roll call. This is followed by getting their individual work
assignments from the foreman.

(b) Thereafter,they are individually required to accomplish the Laborer's

Daily Accomplishment Report during which they are often made to explain
about their reported accomplishment the following day.

(c) Then they go to the stockroom to get the working materials, tools and
equipment.

(d) Lastly, they travel to the field bringing with them their tools, equipment
and materials. (Supra, 4-5.)

The petitioners have vehemently maintained that in view thereof, the instant case
should be distinguished from the first case. And I do not believe that the respondents
have successfully rebutted these allegations. The Solicitor General relies solely on the
decision of then Minister Ople, the decision the petitioners precisely reject in view of the
changes in the conditions of the parties. The private respondent on the other hand
insists that these practices were the same practices taken into account in ALU v.
STANFILCO. If this were so, the Ople decision was silent thereon.

It is evident that the Ople decision was predicated on the absence of any insinuation of
obligatoriness in the course or after the assembly activities on the part of the employees.
(" . . [T]hey are not subject to the absolute control of the company during this period,
otherwise, their failure to report in the assembly time would justify the company to
impose disciplinary measures;" supra, 6.) As indicated, however, by the petitioners,
things had since changed, and remarkably so, and the latter had since been placed
under a number of restrictions. My considered opinion is that the thirty-minute assembly
time had become, in truth and fact, a "waiting time" as contemplated by the Labor Code.

I vote, then, to grant the petition.

Separate Opinions

SARMIENTO, J., Dissenting:

It is my opinion that res judicata is not a bar.

The decision penned by then Minister Blas Ople in ALU v. STANFILCO (NLRC Case No. 26-
LS-XI-76) relied upon by the respondents as basis for claims of res judicata, is not, to my
mind, a controlling precedent. In that case, it was held that the thirty-minute "waiting
time" complained of was a mere "assembly time" and not a waiting time as the term is
known in law, and hence, a compensable hour of work. Thus:

The thirty (30)-minute assembly time long practiced and institutionalized by

mutual consent of the parties under Article IV, Section 3, of the Collective
Bargaining Agreement cannot be considered as 'waiting time' within the
purview of Section 5, Rule 1, Book III of the Rules and Regulations
Implementing the Labor Code. ...

Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary

practice of the employees, and the proceedings attendant thereto are not
infected with complexities as to deprive the workers the time to attend to
other personal pursuits. They are not new employees as to require the
company to deliver long briefings regarding their respective work
assignments. Their houses are situated right on the area where the farms are
located, such that after the roll call, which does not necessarily require the
personal presence, they can go back to their houses to attend to some
chores.

In short, they are not subject to the absolute control of the company during
this period, otherwise, their failure to report in the assembly time would
justify the company to impose disciplinary measures. The CBA does not
contain any provision to this effect; the record is also bare of any proof on
this point. This, therefore, demonstrates the indubitable fact that the thirty
(30)-minute assembly time was not primarily intended for the interests of the
employer, but ultimately for the employees to indicate their availability or
non-availability for work during every working day. (Decision, 6.)

Precisely, it is the petitioners' contention that the assembly time in question had since
undergone dramatic changes, thus:

(a) First there is the roll call. This is followed by getting their individual work
assignments from the foreman.

(b) Thereafter,they are individually required to accomplish the Laborer's

Daily Accomplishment Report during which they are often made to explain
about their reported accomplishment the following day.

(c) Then they go to the stockroom to get the working materials, tools and
equipment.

(d) Lastly, they travel to the field bringing with them their tools, equipment
and materials. (Supra, 4-5.)

The petitioners have vehemently maintained that in view thereof, the instant case
should be distinguished from the first case. And I do not believe that the respondents
have successfully rebutted these allegations. The Solicitor General relies solely on the
decision of then Minister Ople, the decision the petitioners precisely reject in view of the
changes in the conditions of the parties. The private respondent on the other hand
insists that these practices were the same practices taken into account in ALU v.
STANFILCO. If this were so, the Ople decision was silent thereon.

It is evident that the Ople decision was predicated on the absence of any insinuation of
obligatoriness in the course or after the assembly activities on the part of the employees.
(" . . [T]hey are not subject to the absolute control of the company during this period,
otherwise, their failure to report in the assembly time would justify the company to
impose disciplinary measures;" supra, 6.) As indicated, however, by the petitioners,
things had since changed, and remarkably so, and the latter had since been placed
under a number of restrictions. My considered opinion is that the thirty-minute assembly
time had become, in truth and fact, a "waiting time" as contemplated by the Labor Code.

I vote, then, to grant the petition.

[G.R. No. L-63122. February 20, 1984.]

G.R. No. 96078 January 9, 1992

HILARIO RADA, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR
CONSULTANTS AND PLANNERS, INC., respondents.

Cabellero, Calub, Aumentado & Associates Law Offices for petitioner.

REGALADO, J.:

In this special civil action for certiorari, petitioner Rada seeks to annul the decision of
respondent National Labor Relations Commission (NLRC), dated November 19, 1990,
reversing the decision of the labor arbiter which ordered the reinstatement of petitioner
with backwages and awarded him overtime pay. 1

The facts, as stated in the Comment of private respondent Philnor Consultants and
Planners, Inc. (Philnor), are as follows:

Petitioner's initial employment with this Respondent was under a "Contract of

Employment for a Definite Period" dated July 7, 1977, copy of which is hereto
attached and made an integral part hereof as Annex A whereby Petitioner
was hired as "Driver" for the construction supervision phase of the Manila
North Expressway Extension, Second Stage (hereinafter referred to as MNEE
Stage 2) for a term of "about 24 months effective July 1, 1977.

xxx xxx xxx

Highlighting the nature of Petitioner's employment, Annex A specifically

provides as follows:

It is hereby understood that the Employer does not have a

continuing need for the services of the Employee beyond the
termination date of this contract and that the Employee's
services shall automatically, and without notice, terminate upon
the completion of the above specified phase of the project; and
that it is further understood that the engagement of his/her
services is coterminus with the same and not with the whole
project or other phases thereof wherein other employees of
similar position as he/she have been hired. (Par. 7, emphasis
supplied)

Petitioner's first contract of employment expired on June 30, 1979.

Meanwhile, the main project, MNEE Stage 2, was not finished on account of
various constraints, not the least of which was inadequate funding, and the
same was extended and remained in progress beyond the original period of
2.3 years. Fortunately for the Petitioner, at the time the first contract of
employment expired, Respondent was in need of Driver for the extended
project. Since Petitioner had the necessary experience and his performance
under the first contract of employment was found satisfactory, the position
of Driver was offered to Petitioner, which he accepted. Hence a second
Contract of Employment for a Definite Period of 10 months, that is, from July
1, 1979 to April 30, 1980 was executed between Petitioner and Respondent
on July 7, 1979. . . .

In March 1980 some of the areas or phases of the project were completed,
but the bulk of the project was yet to be finished. By that time some of those
project employees whose contracts of employment expired or were about to
expire because of the completion of portions of the project were offered
another employment in the remaining portion of the project. Petitioner was
among those whose contract was about to expire, and since his service
 performance was satisfactory, respondent renewed his contract of
employment in April 1980, after Petitioner agreed to the offer. Accordingly, a
third contract of employment for a definite period was executed by and
between the Petitioner and the Respondent whereby the Petitioner was again
employed as Driver for 19 months, from May 1, 1980 to November 30,
1981, . . .

This third contract of employment was subsequently extended for a number

of times, the last extension being for a period of 3 months, that is, from
October 1, 1985 to December 31, 1985, . . .

The last extension, from October 1, 1985 to December 31, 1985 (Annex E)
covered by an "Amendment to the Contract of Employment with a Definite
Period," was not extended any further because Petitioner had no more work
to do in the project. This last extension was confirmed by a notice on
November 28, 1985 duly acknowledged by the Petitioner the very next day, .
..

Sometime in the 2nd week of December 1985, Petitioner applied for

"Personnel Clearance" with Respondent dated December 9, 1985 and
acknowledged having received the amount of P3,796.20 representing
conversion to cash of unused leave credits and financial assistance.
Petitioner also released Respondent from all obligations and/or claims, etc. in
a "Release, Waiver and Quitclaim" . . . 2

Culled from the records, it appears that on May 20, 1987, petitioner filed before the
NLRC, National Capital Region, Department of Labor and Employment, a Complaint for
non-payment of separation pay and overtime pay. On June 3, 1987, Philnor filed its
Position Paper alleging, inter alia, that petitioner was not illegally terminated since the
project for which he was hired was completed; that he was hired under three distinct
contracts of employment, each of which was for a definite period, all within the
estimated period of MNEE Stage 2 Project, covering different phases or areas of the said
project; that his work was strictly confined to the MNEE Stage 2 Project and that he was
never assigned to any other project of Philnor; that he did not render overtime services
and that there was no demand or claim for him for such overtime pay; that he signed a
"Release, Waiver and Quitclaim" releasing Philnor from all obligations and claims; and
that Philnor's business is to provide engineering consultancy services, including
supervision of construction services, such that it hires employees according to the
requirements of the project manning schedule of a particular contract. 3

On July 2, 1987, petitioner filed an Amended Complaint alleging that he was illegally
dismissed and that he was not paid overtime pay although he was made to render three
hours overtime work form Monday to Saturday for a period of three years.

On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed
since he was a regular employee entitled to security of tenure; that he was not a project
employee since Philnor is not engaged in the construction business as to be covered by
Policy Instructions No. 20; that the contract of employment for a definite period executed
between him and Philnor is against public policy and a clear circumvention of the law
designed merely to evade any benefits or liabilities under the statute; that his position as
driver was essential, necessary and desirable to the conduct of the business of Philnor;
that he rendered overtime work until 6:00 p.m. daily except Sundays and holidays and,
therefore, he was entitled to overtime pay. 4

In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular
employee pursuant to Article 278(c) of the Labor Code and, thus, he cannot be
terminated except for a just cause under Article 280 of the Code; and that the public
respondent's ruling in Quiwa vs. Philnor Consultants and Planners, Inc. 5 is not applicable
to his case since he was an administrative employee working as a company driver, which
position still exists and is essential to the conduct of the business of Philnor even after
the completion of his contract of employment. 6 Petitioner likewise avers that the
contract of employment for a definite period entered into between him and Philnor was a
ploy to defeat the intent of Article 280 of the Labor Code.

On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper, alleging
therein that petitioner was not a company driver since his job was to drive the
employees hired to work at the MNEE Stage 2 Project to and from the filed office at Sto.
Domingo Interchange, Pampanga; that the office hours observed in the project were from
7:00 a.m. to 4:00 p.m. Mondays through Saturdays; that Philnor adopted the policy of
allowing certain employees, not necessarily the project driver, to bring home project
vehicles to afford fast and free transportation to and from the project field office
considering the distance between the project site and the employees' residence, to avoid
project delays and inefficiency due to employee tardiness caused by transportation
problem; that petitioner was allowed to use a project vehicle which he used to pick up
and drop off some ten employees along Epifanio de los Santos Avenue (EDSA), on his
way home to Marikina, Metro Manila; that when he was absent or on leave, another
employee living in Metro Manila used the same vehicle in transporting the same
employees; that the time used by petitioner to and from his residence to the project site
from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m., or about three hours daily,
was not overtime work as he was merely enjoying the benefit and convenience of free
transportation provided by Philnor, otherwise without such vehicle he would have used at
least four hours by using public transportation and spent P12.00 daily fare; that in the
case of Quiwa vs. Philnor Consultants and Planners, Inc., supra, the NLRC upheld
Philnor's position that Quiwa was a project employee and he was not entitled to
termination pay under Policy Instructions No. 20 since his employment was coterminous
with the completion of the project.

On August 25, 1987, Philnor filed its Respondent's Reply/Comments to Complainant's

Rejoinder and Reply, submitting therewith two letters dated January 5, 1985 and
February 6, 1985, signed by MNEE Stage 2 Project employees, including herein
petitioner, where they asked what termination benefits could be given to them as the
MNEE Stage 2 Project was nearing completion, and Philnor's letter-reply dated February
22, 1985 informing them that they are not entitled to termination benefits as they are
contractual/project employees.
7
On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision with the
following dispositive portion:

WHEREFORE, in view of all the foregoing considerations, judgment is hereby

rendered:

(1) Ordering the respondent company to reinstate the complainant to his

former position without loss of seniority rights and other privileges with full
backwages from the time of his dismissal to his actual reinstatement;

(2) Directing the respondent company to pay the complainant overtime pay
for the three excess hours of work performed during working days from
January 1983 to December 1985; and

(3) Dismissing all other claims for lack of merit.

SO ORDERED.

Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November 19,
1990, setting aside the labor arbiter's aforequoted decision and dismissing petitioner's
complaint.

Hence this petition wherein petitioner charges respondent NLRC with grave abuse of
discretion amounting to lack of jurisdiction for the following reasons:

1. The decision of the labor arbiter, dated August 31, 1989, has already become final and
executory;

2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is it
applicable to this case;

3. The petitioner is a regular employee with eight years and five months of continuous
services for his employer, private respondent Philnor;

4. The claims for overtime services, reinstatement and full backwages are valid and
meritorious and should have been sustained; and
5. The decision of the labor arbiter should be reinstated as it is more in accord with the
facts, the law and evidence.

The petition is devoid of merit.

1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of the

appeal filed by Philnor in spite of the latter's failure to file a supersedeas bond within ten
days from receipt of the labor arbiter's decision, by reason of which the appeal should be
deemed to have been filed out of time. It will be noted, however, that Philnor was able to
file a bond although it was made beyond the 10-day reglementary period.

While it is true that the payment of the supersedeas bond is an essential requirement in
the perfection of an appeal, however, where the fee had been paid although payment
was delayed, the broader interests of justice and the desired objective of resolving
controversies on the merits demands that the appeal be given due course. Besides, it
was within the inherent power of the NLRC to have allowed late payment of the bond,
considering that the aforesaid decision of the labor arbiter was received by private
respondent on October 3, 1989 and its appeal was duly filed on October 13, 1989.
However, said decision did not state the amount awarded as backwages and overtime
pay, hence the amount of the supersedeas bond could not be determined. It was only in
the order of the NLRC of February 16, 1990 that the amount of the supersedeas bond
was specified and which bond, after an extension granted by the NLRC, was timely filed
by private respondent.

Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before the
Commission or any of the Labor Arbiters, the rules of evidence prevailing in Courts of law
or equity shall not be controlling and it is the spirit and intention of this Code that the
Commission and its members and the Labor Arbiters shall use every and all reasonable
means to ascertain the facts in each case speedily and objectively without regard to
technicalities of law or procedure, all in the interest of due process. 8 Finally, the issue of
timeliness of the appeal being an entirely new and unpleaded matter in the proceedings
below it may not now be raised for the first time before this Court. 9

2. Petitioner postulates that as a regular employee, he is entitled to security of tenure,

hence he cannot be terminated without cause. Private respondent Philnor believes
otherwise and asserts that petitioner is merely a project employee who was terminated
upon the completion of the project for which he was employed.

In holding that petitioner is a regular employee, the labor arbiter found that:

. . . There is no question that the complainant was employed as driver in the

respondent company continuously from July 1, 1977 to December 31, 1985
under various contracts of employment. Similarly, there is no dispute that
respondent Philnor Consultant & Planner, Inc., as its business name
connotes, has been engaged in providing to its client(e)le engineering
consultancy services. The record shows that while the different labor
contracts executed by the parties stipulated definite periods of engaging the
services of the complainant, yet the latter was suffered to continue
performing his job upon the expiration of one contract and the renewal of
another. Under these circumstances, the complaint has obtained the status
of regular employee, it appearing that he has worked without fail for almost
eight years, a fraction of six months considered as one whole year, and that
his assigned task as driver was necessary and desirable in the usual
trade/business of the respondent employer. Assuming to be true, as spelled
out in the employment contract, that the Employer has no "continuing need
for the services of the Employe(e) beyond the termination date of this
contract and that the Employee's services shall automatically, and without
notice, terminate upon completion of the above specified phase of the
project," still we cannot see our way clear why the complainant was hired
and his services engaged contract after contract straight from 1977 to 1985
which, to our considered view, lends credence to the contention that he
worked as regular driver ferrying early in the morning office personnel to the
company main office in Pampanga and bringing back late in the afternoon to
Manila, and driving company executives for inspection of construction
workers to the jobsites. All told, we believe that the complainant, under the
environmental facts obtaining in the case at bar, is a regular employee, the
 provisions of written agreement to the
contrary notwithstanding and regardless of the oral understanding of the
parties . . . 10

On the other hand, respondent NLRC declared that, as between the uncorroborated and
unsupported assertions of petitioners and those of private respondent which are
supported by documents, greater credence should be given the latter. It further held
that:

Complainant was hired in a specific project or undertaking as driver. While

such project was still on-going he was hired several times with his
employment period fixed every time his contract was renewed. At the
completion of the specific project or undertaking his employment contract
was not renewed.

We reiterate our ruling in the case of (Quiwa) vs. Philnor Consultants and
Planners, Inc., NLRC RAB III 5-1738-84, it is being applicable in this case, viz.:

. . . While it is true that the activities performed by him were

necessary or desirable in the usual business or trade of the
respondent as consultants, planners, contractor and while it is
also true that the duration of his employment was for a period of
about seven years, these circumstances did not make him a
regular employee in contemplation of Article 281 of (the) Labor
Code. . . . 11

Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et
al. 12 is applicable to the case at bar. Thus:

We hold that private respondents were project employees whose work was
coterminous with the project or which they were hired. Project employees, as
distinguished from regular or non-project employees, are mentioned in
section 281 of the Labor Code as those "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."

Policy Instructions No. 20 of the Secretary of Labor, which was issued to

stabilize employer-employee relations in the construction industry, provides:

Project employees are those employed in connection with a

particular construction project. Non-project (regular) employees
are those employed by a construction company without
reference to any particular project.

Project employees are not entitled to termination pay if they are

terminated as a result of the completion of the project or any
phase thereof in which they are employed, regardless of the
number of projects in which they have been employed by a
particular construction company. Moreover, the company is not
required to obtain clearance from the Secretary of Labor in
connection with such termination.

The petitioner cited three of its own cases wherein the National Labor
Relations Commission, Deputy Minister of Labor and Employment Inciong
and the Director of the National Capital Region held that the layoff of its
project employees was lawful. Deputy Minister Inciong in TFU Case No. 1530,
In Re Sandoval Shipyards, Inc. Application for Clearance to Terminate
Employees, rendered the following ruling on February 26, 1979;

We feel that there is merit in the contention of the applicant

corporation. To our mind, the employment of the employees
concerned were fixed for a specific project or undertaking. For
the nature of the business the corporation is engaged into is one
which will not allow it to employ workers for an indefinite period.
 It is significant to note that the corporation does not construct
vessels for sale or otherwise which will demand continuous
productions of ships and will need permanent or regular workers.
It merely accepts contracts for shipbuilding or for repair of
vessels form third parties and, only, on occasion when it has
work contract of this nature that it hires workers to do the job
which, needless to say, lasts only for less than a year or longer.

The completion of their work or project automatically terminates

their employment, in which case, the employer is, under the law,
only obliged to render a report on the termination of the
employment. (139-140, Rollo of G.R. No. 65689) (Emphasis
supplied)
13
In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., we likewise held that:

As an electrical contractor, the private respondent depends for its business

on the contracts it is able to obtain from real estate developers and builders
of buildings. Since its work depends on the availability of such contracts or
"projects," necessarily the duration of the employment's of this work force is
not permanent but co-terminus with the projects to which they are assigned
and from whose payrolls they are paid. It would be extremely burdensome
for their employer who, like them, depends on the availability of projects, if it
would have to carry them as permanent employees and pay them wages
even if there are no projects for them to work on. (Emphasis supplied.)

It must be stressed herein that although petitioner worked with Philnor as a driver for
eight years, the fact that his services were rendered only for a particular project which
took that same period of time to complete categorizes him as a project employee.
Petitioner was employed for one specific project.

A non-project employee is different in that the employee is hired for more than one
project. A non-project employee, vis-a-vis a project employee, is best exemplified in the
case of Fegurin, et al. vs. National Labor Relations Commission, et al. 14 wherein four of
the petitioners had been working with the company for nine years, one for eight years,
another for six years, the shortest term being three years. In holding that petitioners are
regular employees, this Court therein explained:

Considering the nature of the work of petitioners, that of carpenter, laborer

or mason, their respective jobs would actually be continuous and on-going.
When a project to which they are individually assigned is completed, they
would be assigned to the next project or a phase thereof. In other words,
they belonged to a "work pool" from which the company would draw workers
for assignment to other projects at its discretion. They are, therefore,
actually "non-project employees."

From the foregoing, it is clear that petitioner is a project employee considering that he
does not belong to a "work pool" from which the company would draw workers for
assignment to other projects at its discretion. It is likewise apparent from the facts
obtaining herein that petitioner was utilized only for one particular project, the MNEE
Stage 2 Project of respondent company. Hence, the termination of herein petitioner is
valid by reason of the completion of the project and the expiration of his employment
contract.

3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the
same. The fact that he picks up employees of Philnor at certain specified points along
EDSA in going to the project site and drops them off at the same points on his way back
from the field office going home to Marikina, Metro Manila is not merely incidental to
petitioner's job as a driver. On the contrary, said transportation arrangement had been
adopted, not so much for the convenience of the employees, but primarily for the benefit
of the employer, herein private respondent. This fact is inevitably deducible from the
Memorandum of respondent company:

The herein Respondent resorted to the above transport arrangement

because from its previous project construction supervision experiences,
Respondent found out that project delays and inefficiencies resulted from
 employees' tardiness; and that the problem of tardiness, in turn, was
aggravated by transportation problems, which varied in degrees in
proportion to the distance between the project site and the employees'
residence. In view of this lesson from experience, and as a practical, if
expensive, solution to employees' tardiness and its concomitant problems,
Respondent adopted the policy of allowing certain employees not
necessarily project drivers to bring home project vehicles, so that
employees could be afforded fast, convenient and free transportation to and
from the project field office. . . . 15

Private respondent does not hesitate to admit that it is usually the project driver who is
tasked with picking up or dropping off his fellow employees. Proof thereof is the
undisputed fact that when petitioner is absent, another driver is supposed to replace him
and drive the vehicle and likewise pick up and/or drop off the other employees at the
designated points on EDSA. If driving these employees to and from the project site is not
really part of petitioner's job, then there would have been no need to find a replacement
driver to fetch these employees. But since the assigned task of fetching and delivering
employees is indispensable and consequently mandatory, then the time required of and
used by petitioner in going from his residence to the field office and back, that is, from
5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter
rounded off as averaging three hours each working day, should be paid as overtime
work. Quintessentially, petitioner should be given overtime pay for the three excess
hours of work performed during working days from January, 1983 to December, 1985.

WHEREFORE, subject to the modification regarding the award of overtime pay to herein
petitioner, the decision appealed from is AFFIRMED in all other respects.

SO ORDERED.

Melencio-Herrera, Paras and Padilla, JJ., concur.

Nocon, J., took no part.

Footnotes

1 Annex F, Petition; Rollo, 40.

2 Rollo, 79-82.

3 Ibid., 61-62.

4 Ibid., 63.

5 NLRC Case NO. RAB-III-5-1738-84, January 28, 1986. The petition

for certiorari in G.R. No. 73962, assailing the decision in the aforesaid case,
was dismissed for lack of merit by this Court in its resolution of July 2, 1986.

6 Ibid., 64.

7 Annex A, Petition; Rollo, 28.

8 Philamlife Insurance Co. vs. Bonto-Perez, et al., 170 SCRA 508 (1989).

9 Arrastre Security Association-TUPAS, et al. vs. Ople, et al., 127 SCRA 580
(1984).

10 Rollo, 32-33.

11 Ibid., 47.

12 136 SCRA 674 (1985).

13 177 SCRA 637 (1989).

14 120 SCRA 910 (1983).

 15 Rollo, 195.

G.R. No. L-4148 July 16, 1952

MANILA TERMINAL COMPANY, INC., petitioner,

vs.
THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND
MUTUAL AID ASSOCIATION, respondents.

Perkins, Ponce Enrile and Contreras for petitioner.

Antonio V. Raquiza, Honesto Ricobal and Perfecto E. Llacarfor respondent Association.
Mariano R. Padilla for respondent Court of Industrial Relations.

PARAS, C. J.:

On September 1, 1945, the Manila Terminal Company, Inc. hereinafter to be referred as

to 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. The petitioner hired
some thirty men 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. On February 1, 1946, the petitioner
began the postwar operation of the arrastre service at the present at the request and
under the control of the Bureau of Customs, by virtue of a contract entered into with the
Philippine Government. The watchmen of the petitioner continued in the service with a
number of substitutions and additions, their salaries having been raised during the
month of February to P4 per day for the day shift and P6.25 per day for the nightshift. On
March 28, 1947, Dominador Jimenez, a member of the Manila Terminal Relief and Mutual
Aid Association, sent a letter to the Department of Labor, requesting that the matter of
overtime pay be investigated, but nothing was done by the Department. On April 29,
1947, Victorino Magno Cruz and five other employees, also member of the Manila Transit
Mutual Aid Association, filed a 5-point demand with the Department of Labor, including
overtime pay, but the Department again filed to do anything about the matter. On May
27, 1947, the petitioner instituted the system of strict eight-hour shifts. On June 19,
1947, the Manila Port Terminal Police Association, not registered in accordance with the
provisions of Commonwealth Act No. 213, filed a petition with the Court of Industrial
Relations. On July 16, 1947, the Manila Terminal Relief and Mutual Aid Association was
organized for the first time, having been granted certificate No. 375 by the Department
of Labor. On July 28, 1947, Manila Terminal Relief and Mutual Aid 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. On May 9, 1949, by virtue of Customs
Administrative Order No. 81 and Executive Order No. 228 of the President of the
Philippines, the entire police force of the petitioner was 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 V. Jimenez Yanson of the Court of Industrial Relations in his decision of April 1,
1950, as amended on April 18, 1950, while dismissing other demands of the Association
for lack of jurisdiction, ordered the petitioner to pay to its police force

(a) Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as
additional overtime compensation for the period from September 1, 1945 to May 24,
1947;

(b) Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00
a.m. during the same period:

(c) Additional compensation of 50 per cent for work performed on Sundays and legal
holidays during the same period;

(d) Additional compensation of 50 per cent for work performed on Sundays and legal
holidays from May 24, 1947 to May 9, 1949; and

(e) Additional compensation of 25 per cent for work performed at night from May 29,
1947 to May 9, 1949.
With reference to the pay for overtime service after the watchmen had been integrated
into the Manila Harbor Police, Judge Yanson ruled that the court has no jurisdiction
because it affects the Bureau of Customs, an instrumentality of the Government having
no independent personality and which cannot be sued without the consent of the State.
(Metran vs. Paredes, 45. Off. Gaz., 2835.)

The petitioner find a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Judge Yanson, concurred in
by Judge Jose S. Bautista, promulgated on July 13, 1950, a resolution denying both
motions for reconsideration. Presiding Judge Arsenio C. Roldan, in a separate opinion
concurred in by Judge Modesto Castillo, agreed with the decision of Judge Yanson of April
1, 1950, as to the dismissal of other demands of the Association, but dissented
therefrom as to the granting of overtime pay. In a separate decisive opinion, Judge Juan
S. Lanting concurred in the dismissal of other demands of the Association. With respect
to overtime compensation, Judge Lanting ruled:

1. The decision under review should be affirmed in so far it grants compensation for
overtime on regular days (not Sunday and legal holidays)during the period from the date
of entrance to duty to May 24, 1947, such compensation to consists of the amount
corresponding to the four hours' overtime at the regular rate and an additional amount of
25 per cent thereof.

2. As to the compensation for work on Sundays and legal holidays, the petitioner should
pay to its watchmen the compensation that corresponds to the overtime (in excess of 8
hours) at the regular rate only, that is, without any additional amount, thus modifying
the decision under review accordingly.

3. The watchmen are not entitled to night differential pay for past services, and therefore
the decision should be reversed with the respect thereto.

The petitioner has filed a present petition for certiorari. Its various contentions may be
briefly summed up in the following propositions: (1) The Court of Industrial Relations has
no jurisdiction to render a money judgment involving obligation in arrears. (2) The
agreement under which its police force were paid certain specific wages for twelve-hour
shifts, included overtime compensation. (3) The Association is barred from recovery by
estoppel and laches. (4) the nullity or invalidity of the employment contract precludes
any recovery by the Association. (5) Commonwealth Act No. 4444 does not authorize
recovery of back overtime pay.

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 1. As a matter of fact this Court
has confirmed an order of the Court of Industrial Relations requiring the Elks Club to pay
to its employees certain sum of money as overtime back wages from June 3, 1939 to
March 13, 1941. This, in spite the allegation of lack or excess of jurisdiction on the part of
said court. (45 Off. Gaz., 3829; 80 Phil. 272)"

The important point stressed by the petitioner is that the contract between it and the
Association upon the commencement of the employment of its watchman was to the
certain rates of pay, including overtime compensation namely, P3 per day for the day
shift and P6 per day for night shift beginning September 1, 1945, and P4 per day shift
and P6.25 per day for the night shift since February, 1946. The record does not bear out
these allegations. The petitioner has relied merely on the facts that its watchmen had
worked on twelve-hour shifts at specific wages per day and that no complaint was made
about the matter until, first on March 28, 1947 and, secondly, on April 29, 1947.

In times of acute unemployment, the people, urged by the instinct of self-preservation,

go from place to place and from office to office in search for any employment, regardless
of its terms and conditions, their main concern in the first place being admission to some
work. Specially for positions requiring no special qualifications, applicants would be good
as rejected if they ever try to be inquisitive about the hours of work or the amount of
salary, ever attempt to dictate their terms. The petitioner's watchmen must have
railroaded themselves into their employment, so to speak, happy in the thought that
they would then have an income on which to subsist. But, at the same time, they found
themselves required to work for twelve hours a day. True, there was agreement to work,
but can it fairly be supposed that they had the freedom to bargain in any way, much less
to insist in the observance of the Eight Hour Labor Law?

As was aptly said in Floyd vs. Du Bois Soap Co., 1942, 317 U. S. 596, 63 Sup. Ct. 159; 6
CCH Labor Cases, Par. 51, 147, "A contract of employment, which provides for a weekly
wage for a specified number of hours, sufficient to cover both the statutory minimum
wage and overtime compensation, if computed on the basis of the statutory minimum
wage, and which makes no provision for a fixed hourly rate or that the weekly wage
includes overtime compensation, does not meet the requirements of the Act."

Moreover, we note that after the petition had instituted the strict eight-hour shifts, no
reduction was made in the salaries which its watchmen received under the twelve hour
arrangement. Indeed, as admitted by the petitioner, "when the members or the
respondent union were placed on strict eight-hour shifts, the lowest salary of all the
members of the respondent union was P165 a month, or P5.50 daily, for both day and
night shifts." Although it may be argued that the salary for the night shift was somewhat
lessened, the fact that the rate for the day shift was increased in a sense tends to
militate against the contention that the salaries given during the twelve-hour shifts
included overtime compensation.

Petitioner's allegation that the association had acquiesced in the twelve-hour shifts for
more than 18 months, is not accurate, because the watchmen involved in this case did
not enter the service of the petitioner, at one time, on September 1, 1945. As Judge
Lanting found, "only one of them entered the service of the company on said date, very
few during the rest of said month, some during the rest of that year (1945) and in 1946,
and very many in 1947, 1948 and 1949."

The case at bar is quite on all fours with the case of Detective & Protective Bureau, Inc.
vs. Court of Industrial Relations and United Employees Welfare Association, supra, in
which the facts were as follows: "The record discloses that upon petition properly
submitted, said court made an investigation and found that the members of the United
Employees Welfare Association (hereafter called the Association) were in the employ of
the petitioner Detective and Protective Bureau, Inc. (herein called the Bureau) which is
engaged in the business of furnishing security guards to commercial and industrial
establishments, paying to said members monthly salaries out of what it received from
the establishments benefited by guard service. The employment called for daily tours of
duty for more than eight hours, in addition to work on Sundays and holidays.
Nonetheless the members performed their labors without receiving extra compensation."
The only difference is that, while in said case the employees concerned were paid
monthly salaries, in the case now before us the wages were computed daily. In the case
cited, we held the following:

It appears that the Bureau had been granting the members of the Association,
every month, "two days off" days in which they rendered no service, although they
received salary for the whole month. Said Bureau contended below that the pay
corresponding to said 2 day vacation corresponded to the wages for extra work.
The court rejected the contention, quite properly we believe, because in the
contract there was no agreement to that effect; and such agreement, if any, would
probably be contrary to the provisions of the Eight-Hour Law (Act No. 444, sec. 6)
and would be null and void ab initio.

It is argued here, in opposition to the payment, that until the commencement of

this litigation the members of the Association never claimed for overtime pay. That
may be true. Nevertheless the law gives them the right to extra compensation.
And they could not be held to have impliedly waived such extra compensation, for
the obvious reason that could not have expressly waived it.

The foregoing pronouncements are in point. 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."

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.

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

While counsel for the petitioner has cited authorities in support of the doctrine invoked,
there are also authorities pointed out in the opinion of Judge Lanting to the contrary.
Suffice it to say, in this connection, that we are inclined to rule adversely against
petitioner for the reasons already stated.

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.

The employee in rendering extra service at the request of his employer has a right
to assume that the latter has complied with the requirement of the law, and
therefore has obtained the required permission from the Department of Labor.

Moreover, the Eight-Hour Law, in providing that "any agreement or contract between the
employer and the laborer or employee contrary to the provisions of this Act shall be null
avoid ab initio," (Commonwealth Act No. 444, sec. 6), obviously intended said provision
for the benefit of the laborers or employees. The employer cannot, therefore, invoke any
violation of the act to exempt him from liability for extra compensation. This conclusion
is further supported by the fact that the law makes only the employer criminally liable for
any violation. It cannot be pretended that, for the employer to commit any violation of
the Eight-Hour Labor Law, the participation or acquiescence of the employee or laborer is
indispensable, because the latter in view of his need and desire to live, cannot be
considered as being on the same level with the employer when it comes to the question
of applying for and accepting an employment.

Petitioner also contends that Commonwealth Act No. 444 does not provide for recovery
of back overtime pay, and to support this contention it makes referrence to the Fair
Labor Standards Act of the United States which provides that "any employer who violates
the provisions of section 206 and section 207 of this 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," a provision not incorporated in
Commonwealth Act 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.

The point is stressed that the payment of the claim of the Association for overtime pay
covering a period of almost two years may lead to the financial ruin of the petitioner, to
the detriment of its employees themselves. It is significant, however, that not all the
petitioner's watchmen would receive back overtime pay for the whole period specified in
the appealed decision, since the record shows that the great majority of the watchmen
were admitted in 1946 and 1947, and even 1948 and 1949. At any rate, we are
constrained to sustain the claim of the Association as a matter of simple justice,
consistent with the spirit and purpose of the Eight-Hour Labor Law. The petitioner, in the
first place, was required to comply with the law and should therefore be made liable for
the consequences of its violation.

It is high time that all employers were warned that the public is interested in the strict
enforcement of the Eight-Hour Labor Law. This was designed not only to safeguard the
health and welfare of the laborer or employee, but in a way to minimize unemployment
by forcing employers, in cases where more than 8-hour operation is necessary, to utilize
different shifts of laborers or employees working only for eight hours each.

Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it
being understood that the petitioner's watchmen will be entitled to extra compensation
only from the dates they respectively entered the service of the petitioner, hereafter to
be duly determined by the Court of Industrial Relations. So ordered, without costs.

Feria, Pablo, Bengzon, Padilla, Tuason, Bautista Angelo, and Labrador, JJ., concur.

Footnotes
1
Cf. The Shell Co. vs. National Labor Union, 46 Off. Gaz. Supp. 1, p. 97; 81 Phil.,
135.
*
85 Phil. 291.

G.R. No. L-1309 July 26, 1948

THE SHELL COMPANY OF PHILIPPINE ISLANDS, LIMITED, recurrente,

vs.
NATIONAL LABOR UNION, recurrida.

Sres. Ross, Selph, Carrascoso y Janda en representacion de la recurrente.

Sres. Paguia y Villanueva en representacion de la recurrida.

BRIONES, J.:

Actuando sobre una peticion de la entidad obrera llamada "National Labor Union," la
Corte de Relaciones Industriales ha dictado una decision en la que, entre otras cosas, se
obliga a la firma petrolera "The Shell Company of Philippine Islands, Limited" a pagar a
sus obreros que trabajan de noche (desde que se pone el sol hasta que se levanta al dia
siguiente) una compensacion adicional de 50% sobre sus salarios regulares si trabajasen
de dia. Parece que la comania tiene necesidad del servicio nocturno de un determinado
numero de obreros, pues los aviones procedentes del extranjero suelen aterrizar y
despegarse de noche, siendo por esto necesario el que se hagan faenas de noche para el
suministro de gasolina y lubricantes, y para otros menesteres. La compania petrolera se
ha excepcionado contra dicha decision de ahi el presente recurso de certiorari para que
la revoquemos.

La compania recurrente alega y arguye que no solo no existe ninguna disposicion legal
que faculte a la Corte de Relaciones Industriales para ordenar el pago de compensacion
adicional a obreros que trabajan de noche, sino que, por el contrario, la ley del
Commonwealth No. 444 exime al patrono de semejante obligacion toda vez que en dicha
ley se proveen los casos en que es compulsorio el pago de "overtime" (compensacion
adicional), y entre tales casos no figura el trabajo de noche.

Por su parte, la union obrera recurrida sostiene que la facultad que se discute forma
parte de los poderes amplios y efectivos que la ley del Commonwealth No. 103 la
carta organica del Tribunal de Relaciones Industriales otorga a dicho tribunal; y que la
ley No. 444 del Commonwealth que se invoca no tiene ninguna aplication al presente
caso, pues la misma es de alcance forzosamente limitado, refiriendose particular y
exclusivamente a la jornada maxima de trabajo contidiano permitida en los
establecimientos industriales la jornada de 8 horas.

Nuestra conclusion es que la union obrera recurrida tiene la razon de su parte. Para una
clara y cabal elucidacion de los puntos discutidos, estmamos conveniente, aun a riesgo
de alargar esta ponencia, transcribir lasdisposiciones legales pertinentes que son los
articulos 1, 4 y 13 de la ley del Commonwealth No. 103. Helas aqui:

SECTION 1. The Judge: his appointment, qualifications, compensation, tenure.

There is hereby created a Court of Industrial Relations, which shall have jurisdiction
over the entire Philippines, to consider, investigate, decide, and settle any
question, matter, controversy or dispute arising between, and/or affecting,
employers and employees or laborers, and landlords and tenants or farm-laborers,
and regulate the relation between them, subject to, and in accordance with, the
provisions of this Act. The Court shall keep a record of all its proceedings and shall
be presided over by a Judge to be appointed by the President of the Philippines
with the consent of the Commission on Appointments of the National Assembly.
The Judge of the Court shall hold office during good behavior until he reaches the
age of seventy years, or becomes incapacitated to discharge the duties of his
office. His qualifications shall be the same as those provided in the Constitution for
members of the Supreme Court and he shall receive an annual compensation of
ten thousand pesos and shall be entitled to traveling expenses and per diems
when performing official duties outside of the City of Manila. The Department of
Justice shall have executive supervision over the Court.

SEC. 4. Strikes and lockouts. The Court shall take cognizance for purpose of
prevention, arbitration, decision and settlement, of any industrial or agricultural
dispute causing or likely to cause a strike or lockout, arising form differences as
regards wages, shares or compensation, hours of labor or conditions of tenancy or
employment, between employers and employees or laborers and between
landlords and tenants or farm-laborers, provided that the number of employees,
laborers or tenants or farm-laborers involved exceeds thirty, and such industrial or
agricultural dispute is submitted to the Court by the Secretary of Labor, or by any
or both of the parties to the controversy and certified by the Secretary of Labor as
existing and proper to be dealt with by the Court for the sake of public interest. In
all such cases, the Secretary of Labor or the party or parties submitting the
disputes, shall clearly and specifically state in writing the questions to be decided.
Upon the submission of such a controversy or question by the Secretary of Labor,
his intervention therein as authorized by law, shall cease.

The Court shall, before hearing the dispute and in the course of such hearing,
endeavor to reconcile the parties and induce them to settle the dispute by
amicable agreement. If any agreement as to the whole or any part of the dispute is
arrived at by the parties, a memorandum of its terms shall be made in writing,
signed and acknowledged by the parties thereto before the Judge of the Court or
any official acting in his behalf and authorized to administer oaths or
acknowledgments, or, before a notary public. The memorandum shall be filed in
the office of the Clerk of the Court, and, unless otherwise ordered by the Court,
shall, as between the parties to the agreement, have the same effect as, and be
deemed to be, a decision or award.

SEC. 13. Character of the award. In making an award, order or decision, under
the provisions of section four of this Act, the Court shall not be restricted to the
specific relief claimed or demands made by the parties to the industrial or
agricultural dispute, but may include in the award, order or decision any matter or
determination which my be deemed necessary or expedient for the purpose of
setting the dispute or of preventing further industrial or agricultural disputes.

Resulta evidente de las disposiciones transcritas lo siguiente: (a) que cuando surge una
disputa entre el principal y el empleado u obrero, vgr. sobre cuestion de salarios, la Corte
de Relaciones Industriales tiene jurisdiccion en todo el territorio de Filipinas para
considerar, investigar y resolver dicha disputa, fijando los salarios que estime justos y
razonables; (b) que para los efectos de prevencion, arbitraje, decision y arreglo, el
mismo Tribunal de Relaciones Industriales tien igualmente jurisdiccion para conocer de
cualquier disputa industrial o agricola resultante de cualesquier diferencias
respecto de los salarios, participaciones o compensaciones, horas de trabajo,
condiciones del empleo o de la aparceria entre los patronos y los empleados u obreros y
entre los propietarios y los terratenientes u obreros agricolas previo el cumplimiento de
ciertos requisitos y condiciones, cuando se viere que dicha disputa ocasiona o puede
ocasionar una huelga; (c) que en el ejercicio de sus facultades arriba especificadas, el
Tribunal de Relaciones Industriales no queda limitado, al decidir la disputa, a conceder el
remedio o remedios solicitados por las partes en la controversia, sino que puede incluir
en la orden or decision cualquier materia o determinacion para el proposito de arreglar la
disputa o de prevenir ulteriores controversias industriales o agricolas.

En el caso nos ocupa existe indudablemente una dispunta industrial. Mientras la

empresa, la compania Shell, no esta dispuesta a pagar a sus obreros de noche mayores
salarios que los obreros de ida, la "NationalLabor Union", a la cual estan afiliados los
trabajadoresde la Shell, reclama otro tipo de salarios para el servicio nocturno un 50%
mas. En esto consiste la disputa, el litigio industrial. Ahora bien: que ha hecho la Corte
de Relaciones Industriales, despues de sometido el conflicto a su jurisdiccion? Pues
precisamente lo que manda la citada ley No. 103 del Commonwealth, carta organica de
su creacion y funcionamiento, a saber: considerar, investigar y enjuiciar la disputa,
resolviedola despues en el sentido en que la ha resuelto, es decir, remunerando el
trabajo de noche con un 50% mas de los salarios de dia. Y esto es perfectamente legal
tanto dentro del alcance del articulo 1 de la referida ley No. 103 que faculta a la Corte de
Relaciones Industriales para decidir cualquier disputa sobre salarios y compensaciones
en la forma que estime razonable y conveniente, como dentro del marco del articulo 4
de la misma ley que autoriza a dicho tribunal para enjuiciar y decidir cualquier pleito o
controversia industrial o agricola determine el estallido de una huelga o tienda a
causarla. Mas todavia: lo hecho por el Trbunal de Relaciones Industriales en el presente
caso es asimismo legal dentro del marco del articulo 13 de la misma ley No. 103, articulo
que, como queda visto, no solo faculta a dicho tribunal a conceder el remedio que
recabanlas partes, sino inclusive a ir mas alla, esto es, a otorgar remedios no
expresamente solicitados, siempre que los mismos se encamienen a resolver de una vez
la disputa o a prevenir el estallido de ulteriores disputas o huelgas.

Es evidente que con estos amplios poderes el Estadose ha propuesto equipar al Tribunal
de Relaciones Industriales hasta el maximum posible de utilidad y eficacia, haciendo del
mismo no una simple agencia academica, sino verdaderamente activa, dinamica y
eficiente en una palabra, la maquinaria oficial por excelencia en la formidable y
espinosa tarea de resolver los conflictos industriales, yagricolas de cierta clase,
previniendo y evitando de esta manera esos paros y huelgas que tanto afligen y danan
no solo a las empresas y a los obreros, sino, en general, a toda la comunidad. En su
opinion concurrente dictada en el caso autoritativo de Ang Tibay contra Tribunal de
Relaciones Industriales1 (R.G. No. 46496), el Magistado Laurel ha expresado muy
acertadamente la idea fundamental que subraya la creacion de dicho tribunal, con el
siguiente pronunciamiento:

In Commonwealth Act No. 103, and by it, our government no longer performs the
role of mere mediator or intervenor but that of supreme arbiter. (Las cursivas son
nuestras.).

La recurrente arguye, sin embargo, que si bien es verdad que en caso de disputa el
Tribunal de relaciiones Industriales tiene, en virtud de su ley organica, el poder de fijar
los salarios, tal poder no es absoluto, sino que esta sujeto a ciertas restricciones y
cortapizas, provistas en la ley comunmente conocida por ley sobre la jornada de ocho
horas, la ley del Commonwealth No. 444, cuyos articulos pertinentes se transacriben
integramente a continuacion:

SECTION 1. The legal working day for any person employed by another shall be of
not more than eight hours daily. When the work is not continuous, the time during
which the laborer is not working and can leave his working place and can rest
completely shall not be counted.

SEC. 3. Work may be performed beyond eight hours a day in case of actual or
impending emergencies caused by serious accidents, fire, flood, typhoon,
earthquake, epidemic, or other disaster or calamity in order to prevent loss to life
and property or imminent danger to public safety; or in case urgent work to be
performed on the machines, equipment, or installations in order to avoid a serious
loss which the employer would otherwise suffer, or some other just cause of a
similar nature; but in all such cases the laborers and employees shall be entitled to
receive compensation for the overtime work performed at the same rate as their
regular wages or salary, plus at least twenty-five per centum additional.
 In case of national emergency the government is empowered to establish rules and
regulations for the operation of the plants and factories and to determine the
wages to be paid the laborers.

SEC. 4. No person, firm, or corporation, business establishment or place or center

of labor shall compel an employee or laborer to work during Sundays and legal
holidays, unless he is paid an additional sum of at least twenty-five per centum of
his regular remuneration: Provided however, That this prohibition shall not apply to
public utilities performing some public service such as supplying gas, electricity,
power, water, or providing means of transportation or communication.

Como quiera argumentanlos abogados de la recurrente que en estos articulos se

especifican los casos en que se autoriza el pago de compensacion extra o adicional y son
solo, a saber: (a) en caso de "overtime" o trabajo en exceso de las horas regulares por
razones imperiosasde urgencia con motivo de algun desastre o accidente, o para evitar
perdidas o repararlas; (b) en caso de trabajo por los domingos y fiestas; (c) en caso de
emergencia, y nada hay que se refiera al trabajo de noche; luego la orden de que se
trata es ilegal, pues no esta autorizada por la ley. "In the absence recalcan los
abogados de la recurrente legislation authorizing the payment of extra compensation
for work done at night, the Court of Industrial Relations ha no power or authority to order
the petitioner company to pay extra compensation for work done by its laborers at
night. Expressio unius est exclusio alterius. Where, as inthe case at bar, statute
expressly specifies the cases where payment of extra compensation may be demanded,
extra compensation may be allowed in those cases only, and in no others. The provisions
of the Commonwealth Act No. 444 cannot be enlarged by implication or
otherwise. Expressum facit cessare tacitum.

La argumentacion es erronea. La Ley No. 444 no es aplicable al presente caso, siendo

evidente que la misma tiene un objeto especifico, a saber: (a) fijar en 8 horas la jornada
maxima de trabajo; (b) senalar ciertos casos excepcionales en que se puede autorizar el
trabajo fuera de dicha jornada; (c) proveer un sobresueldo, que no debe ser menor de
25% del salario regular, para el "overtime" o trabajo en exceso de las 8 horas.

En el caso de Manila Electric, solicitante-apelante, contra The Public Utities Employees'

Association,2 apelada, L-1206 (45 Off. Gaz., 1760), esta Corte ha declarado que la
facultad conferida por el articulo 1 de la ley del Commonwealth No. 103 al Tribunal de
relaciones Industriales para enjuciar y decidir pleitos y controversias industriales entre el
capital y el trabajo, que incluye la de fijar salarios y compnsaciones de empleados y
obreros, ha quedado restringida por el articulo 4 de la ley Commonwealth No. 444, que al
mismo tiempo que limita a un 25% del salario o compensacion regular del obrero el
minimum de la compensacion adicional que el tribunal puede conceder por trabajos en
los Domingos y fiestas oficiales, exime del pago de dicha compensacion adicional a las
entidades de utilidad publica que prestan algun servicio publico, como las que
suministran gas, electricidad, fuerza mortriz, agua, o proveen medios de transporte o
communicacion. Tal restriccion viene a ser una excepcion de la facultad general del
tribunal para fijar, en casos de disputa, los salarios y compensaciones que deben pagar
los patronos a los empleados y obreros; y como quiera que dicho articulo 4 se refiere
solamente a salario o compensacion por trabajos durante los dias de Domingo y fiestas
oficiales, es obvio que no puede referirse a salario o compensacion adicional por trabajos
fuera de lajornada de ocho horas que generalmente se realizan desde primeras horas de
la manana a ultimas horas de la tarde, pues una cosa es trabajar en dias de Domingo y
fiestas oficiales, y otra cosa bien distinta es trabajar de noche of fuera de la jornada de
ocho horas en dias laborables. Aplicando la maxima legal "expressio unius est exclusio
alterius," se puede sostener, sin temor de equivocarse, que una ley que provee una
excepcion especifica a sus disposiciones generales, como la compensacion adicional por
trabajos en dias de Domingo y fiestas oficiales, excluye cualquiera otra, como la
compensacion adicional por trabajos de noche en dias laborables."Another case in which
this maxim may almost invariably by followed is that of statute which makes certain
specific exceptions to its general provisions. Here wemay safely assume that all other
exceptions were intended to be excluded." (Wabash R. Co.vs. United States, 178 Fed., 5,
101 C. C. A. 133; Cella Commision Co. vs. Bohlinger, 147 Fed., 419; 78 C. C. A. 467;
Kunkalman vs. Gibson, 171 Ind., 503; 84 N.E. 985; Hering vs. Clement, 133 App. Div.,
293; 117 N.Y., Supp. 747.).

El trabajo denoche que la compania Shell exige de sus obreros no es talmente un

"overtime", en el sentido en que se emplea esta palabra en la Le No. 444, sino que es
una jornada completa de trabajo, tambien de 8 horas: solo que, en vez de realizarse de
dia, se hace de noche. Dicho en otras palabras, el trabajo de noche de que aqui se trata
no es solamente unexceso, prolongacion u "overtime" del trabajo regular de dia, sino
que es otro tipo de trabajo, absolutamente independiente de la jornada diurna. Por eso
hay dos turnos: el turno de obreros que trabajan de dia; y el turno de los que trabajan de
noche. Asi que no es extrano que el legislador no haya incluido este tipo de trabajo entre
los casos de "overtime" senalados en la referida ley No. 444.

La cuestion que, a nuestro juicio, se debe determinar es si entre las facultades generales
de la Corte de Relaciones Industriales que estan admitidas sin dipusta, esta la de
considerar la jornada de noche como una jornada completa de trabajo; la de estimarla
como mas gravosa que la jornada de dia; y consiguientemente, la de proveer y ordenar
que se remunere con un 50% mas de los salarios regulares diurnos. Nuestra contestacion
es afirmativa: todo esto se halla comprendido entre los poderes generales de la Corte de
Relaciones Industriales. Si este tribunal tiene, en casos de disputa, el poder de fijar los
salarios que estime justos y razonables para el trabajo de dia, no hay razon por que no
ha de tener el mismo poder con respecto a los salarios de noche; es tan trabajo lo uno
como lo otro. Y con respecto ala apreciacion de que el trabajo de noche es mas pesado y
oneroso que el de dia y, por tanto, merece mayor remuneracion, tampoco hay
motivospara revocarla o alterarla. No hay argumento posible contra el hecho universal
de que el trabajo regular, normal y ordinario es el de dia, y que el trabajo de noche es
muy exceptional y justificado solo por ciertos motivos imperativamente inevitables. Por
algo la humanidad ha trabajadosiempre de dia.

Razones de higiene, de medicina, de moral, de cultura, de sociologia, establecen de

consuno que el trabajo de nocho tiene muchos inconvenientes, y cuando no hay mas
remedio que hacerlo es solo justo que se remunero mejor que de ordinario para resarcir
hasa cierto punto al obrero de tales inconvenientes. Es indudable que el trabajo de
noche no solo a la larga afecta a la salud del trabajador, sino que le priva a este de
ciertas cosas que hacen relativamente agradable la vida, como, vgr., un reposo completo
e ininterrumpido y ciertos ratos de solaz, ocio o expansion espiritual y cultural que podria
tener al terminar el trabajo por la tarde y durante las primeras horas de la noche. Se dice
que el obrero puede descansar de dia despues de haber trabajado toda la noche; pero
puede acaso el reposo de dia dar al cuerpo aquel tonico y aquel efecto reparador
completo que solo puede proporcionar el reposo natural de noche? Se dice tambien que
algunos prefieren trabajar de noche bajo nuestro clima abrasador, evitando asi el calor
del dia. Mucho tememos, sin embargo, que esto sea mejor hablado que praticado.
Creemos que desde tiempo inmemorial la regla universal es que el hombre trabja de
noche mas por necesidad irremediable que por placentera conveniencia.

A la opinion vulgar, universal, hay que sumar la opinionpericial, el criterio especialista.

La opinion de los tratadistas y expertos milita decididamente en favor de la tesis de que
el trabajo de noche es mas duro y oneroso que el trabajo de dia, considerandose por
esto con marcada repugnancia y compeliendo consiguientemente a las gerencias
capitalisticas a establecer una escala mas alta de salarios como incentivo a los obreros
para aceptarlo. Se podrian citar virias autoridades, pero para no extender demasiado
esta ponencia optamos por transcriber solamente algunas, a saber:

. . . Then, it must be remembered that it is distinctly unphysiological to turn the

night into day and deprive the body of the beneficial effects of sunshine. The
human organism revolts against this procedure. Added to artificial lighting are
reversed and unnatural times of eating, resting, and sleeping. Much of the
inferiority of nightwork can doubtless be traced to the failure of the workers to
secure proper rest and sleep, by day. Because of inability or the lack of opportunity
to sleep, nightworkers often spend their days in performing domestic duties,
joining the family in the midday meal, 'tinkering about the place', watching the
baseball game, attending the theater or taking a ride in the car. It is not strange
that nightworkers tend to be less efficient than dayworkers and lose more time. . .
(The Management of Labor Relations, by Watkins & Dodd, page 524.).

Nightwork. Nightwork has gained a measure of prominence in the modern

industrial system in connection with continuous industries, that is, industries in
which the nature of the processes makes it necessary to keep machinery and
equipment in constant operation. Even in continuous industries the tendency is
definitely in the direction of FOUR shifts of 6 hours each, with provision for an
automatic change of shift for all workers at stated intervals. Some discussion has
taken place with regard to the lengths of the period any workers should be allowed
to remain on the night shift. A weekly change of shifts is common, specially where
three or four shifts are in operation; in other cases the change is made fortnightly
or monthly; in still other instances, no alternation is provided for, the workers
remaining on day or nightwork permanently, except where temporary changes
are made for individual convenience.

There is sharp difference of opinion concerning the relative merits of these

systems. Advocates of the weekly change of shifts contend that the strain of
nightwork and the difficulty of getting adequate sleep during the day make it
unwise for workers to remain on the"graveyard" shift for more than a week at a
time. Opponents urge that repeated changes make it more difficult to settle down
to either kind of shift and that after the first week nightwork becomes less trying
while the ability to sleep by day increases. Workers themselves react in various
ways to the different systems. This much, however, is certain: Few persons react
favorably to nightwork, whether the shift be continuous or alternating. Outside of
continuous industries, nightwork can scarcely be justified, and, even in these, it
presents serious disadvantages which must be recognized in planing for industrial
efficiency, stabilization of the working force, the promotion of industrial good-will,
and the conservation of the health and vitality of the workers.

Nightwork cannot be regarded as desirable, either from the point of view of the
employer or of the wage earner. It is uneconomical unless overhead costs are
unusually heavy. Frequently the scale of wages is higher as an inducement to
employees to accept employment on the night shift, and the rate of production is
generally lower. (Management of Labor Relations, by Watkins & Dodd, pp. 522-524;
emphasis ours.)

. . . The lack of sunlight tends to produce anemia and tuberculosis and to

predispose to other ills. Nightwork brings increased liability to eyestrain and
accident. Serious moral dangers also are likely to result from the necessity of
traveling the streets alone at night, and from the interference with normal home
life. From an economic point of view, moreover, the investigations showed that
nightwork was unprofitable, being inferior to day work both in quality and in
quantity. Wherever it had been abolished, in the long run the efficiency both of the
management and of the workers was raised. Furthermore, it was found that
nightwork laws are a valuable aid in enforcing acts fixing the maximum period of
employment. (Principles of Labor Legislation, by Commons and Andrews, 4th
Revised Edition, p. 142.)

Special regulation of nightwork for adult men is a comparatively recent

development. Some European countries have adopted laws placing special
limitations on hours of nightwork for men, and others prohibit such work except in
continuous processes. (Principles of Labor legislation, 4th Revised Edition by
Common & Andrews, p. 147.)

Nightwork has almost invariably been looked upon with disfavor by students of the
problem because of the excessive strain involved, especially for women and young
persons, the large amount of lost time consequent upon exhaustion of the workers,
the additional strain and responsibility upon the executive staff, the tendency of
excessively fatigued workers to "keep going" on artificial stimulants, the general
curtailment of time for rest, leisure, and cultural improvement, and the fact that
night workers, although precluded to an extent from the activities of day life, do
attempt to enter into these activities, with resultant impairment of physical well-
being. It is not contended, of course, that nightwork could be abolished in the
continuous-process industries, but it is possible to put such industries upon a
three- or four-shifts basis, and to prohibit nightwork for women and children.
(Labor's Progress and Problems, Vol. I, p. 464, by Professors Millis and
Montgomery.)

Nightwork. Civilized peoples are beginning to recognize the fact that except in
cases of necessity or in periods of great emergency, nightwork is socially
undesirable. Under our modern industrial system, however, nightwork has greatly
aided the production of commodities, and has offered a significant method of
cutting down the ever-increasing overhead costs of industry. This result has led
employers to believe that such work is necessary and profitable. Here again one
 meets a conflict of economic and social interests. Under these circumstances it is
necessary to discover whether nightwork has deleterious effects upon the health of
laborers and tends to reduce the ultimate supply of efficient labor. If it can proved
that nightwork affects adversely both the quality and quantity of productive labor,
its discontinuance will undoubtedly be sanctioned by employers. From a social
point of view, even a relatively high degree of efficiency in night operations must
be forfeited if it is purchased with rapid exhaustion of the health and energy of the
workers. From an economic point of view, nightwork may be necessary if the
employer is to meet the demand for his product, or if he is to maintain his market
in the face of increasing competition or mounting variable production costs.

Industrial experience has shown that the possession of extra-ordinary physical

strength and self-control facilitates the reversal of the ordinary routine of day work
and night rest, with the little or no unfavorable effect on health and efficiency.
Unusual vitality and self-control, however, are not common possessions. It has
been found that the most serious obstacle to a reversal of the routine is the lack of
self-discipline. Many night workers enter into the numerous activities of day life
that preclude sleep, and continue to attempt to do their work at night. Evidence
gathered by the British Health of Munition Workers' Committee places permanent
night workers, whether judged on the basis of output or loss of time, in a very
unfavorable positions as compared with day workers.

Systems of nightwork differ. There is the continuous system, in which employees

labor by night and do not attend the establishment at all by day, and the
discontinuous system, in which the workers change to the day turn at regular
intervals, usually every other week. There are, of course, minor variations in these
systems, depending upon the nature of the industry and the wishes of
management. Such bodies as the British Health Munition Workers' Committee have
given us valuable conclusions concerning the effect of nightwork. Continuous
nightwork is definitely less productive than the discontinuous system. The output
of the continuous day shift does not make up for this loss in production.

There is, moreover, a marked difference between the rates of output of night and
day shifts on the discontinuous plan. In each case investigated the inferiority of
night labor was definitely established. This inferiority is evidently the result of the
night worker's failure to secure proper amounts of sleep and rest during the day.
The system of continuous shifts, especially for women, is regarded by all
investigators as undesirable. Women on continuous nightwork are likely to perform
domestic duties, and this added strain undoubtedly accounts for the poorer results
of their industrial activities. The tendency to devote to amusement and other
things the time that should be spent in rest and sleep is certainly as common
among men as among women workers and accounts largely for the loss of
efficiency and time on the part of both sexes in nightwork.

The case against nightwork, then, may be said to rest upon several grounds. In the
first place, there are the remotely injurious effects of permanent nightwork
manifested in the later years of the worker's life. Of more immediate importance to
the average worker is the disarrangement of his social life, including the
recreational activities of his leisure hours and the ordinary associations of normal
family relations. From an economic point of view, nightwork is to be discouraged
because of its adverse effect upon efficiency and output. A moral argument against
nightwork in the case of women is that the night shift forces the workers to go to
and from the factory in darkness. Recent experiences of industrial nations have
added much to the evidence against the continuation of nightwork, except in
extraordinary circumstances and unavoidable emergencies. The immediate
prohibition of nightwork for all laborers is hardly practicable; its discontinuance in
the case of women employees is unquestionably desirable. 'The night was made
for rest and sleep and not for work' is a common saying among wage-earning
people, and many of them dream of an industrial order in which there will be no
night shift. (Labor Problems, 3rd Edition, pp. 325-328, by Watkins & Dodd.).

En meritos de lo expuesto, se deniega el recurso de certiorari interpuesto y se confirma

la sentencia del Tribunal De Reclaciones Industriales, con costas a cargo de a recurrente.
Asi se ordena.
Paras, Pres. Interino, Feria, Pablo, Perfecto, Bengzon, Padilla and Tuason, MM., estan
conformes.

Footnotes
1
69 Phil., 635.
2
79 Phil., 409.