578 SUPREME COURT REPORTS

ANNOTATED
Auto Bus Transport Systems, Inc. vs. Bautista
G.R.No.156367.May16,2005. *

AUTOBUSTRANSPORTSYSTEMS,INC.,petitioner,vs.ANTONIOBAUTISTA,
respondent.

LaborLaw;ServiceIncentiveLeave;FieldPersonnel;WordsandPhrases;Thephrase
otheremployeeswhoseperformanceisunsupervisedbytheemployerinSection1(D),Rule
V, Book III of the Implementing Rules and Regulations of the Labor Code must not be
understoodasaseparateclassificationofemployeestowhichserviceincentiveleaveshall
notbegrantedrather,itservesasanamplificationoftheinterpretationofthedefinitionof
field personnel under the Labor Code as those whose actual hours of work in the field
cannot be determined with reasonable certainty; Employees engaged on task or contract
basisorpaidonpurelycommissionbasisarenotautomaticallyexemptedfromthegrantof
service incentive leave, unless, they fall under the classification of field personnel.A
careful perusal of said provisions of law will result in the conclusion that the grant of
serviceincentiveleavehasbeendelimitedbytheImplementingRulesandRegulationsof
theLaborCodetoapplyonlytothoseemployeesnotexplicitlyexcludedbySection1ofRule
V. According to the Implementing Rules, Service Incentive Leave shall not apply to
employeesclassifiedasfieldpersonnel.Thephraseotheremployeeswhoseperformance
isunsupervisedbytheemployermustnotbeunderstoodasaseparateclassificationof
employeestowhichserviceincentiveleaveshallnotbegranted.Rather,itservesasan
amplificationoftheinterpretationofthedefinitionoffieldpersonnelundertheLaborCode
asthosewhoseactualhoursofworkinthefieldcannotbedeterminedwithreasonable
certainty.Thesameistruewithrespecttothephrasethosewhoareengagedontaskor
contract basis, purely commission basis. Said phrase should be related with field
personnel, applying the rule onejusdem generisthat general and unlimited terms are
restrainedandlimitedbytheparticulartermsthattheyfollow.Hence,employeesengaged
on task or contract basis or paid on purely commission basis are not automatically
exemptedfromthegrantofserviceincentiveleave,unless,theyfallundertheclassification
offieldpersonnel.
_______________

*
SECONDDIVISION.

579

VOL. 458, MAY 16, 2005 579

Auto Bus Transport Systems, Inc. vs.
Bautista
Same;Same;Same;Same;What must be ascertained inorder to resolve the issue of
proprietyofthegrantofserviceincentiveleavetoabusdriverconductoriswhetherornothe
is a field personnel; According to the Labor Code, field personnel shall refer to
nonagriculturalemployeeswhoregularlyperformtheirdutiesawayfromtheprincipalplace
ofbusinessorbranchofficeoftheemployerandwhoseactualhoursofworkinthefield
cannotbedeterminedwithreasonablecertainty.Petitionerscontentionthatrespondentis
not entitled to the grant of service incentive leave just because he was paid on purely
commissionbasisismisplaced.Whatmustbeascertainedinordertoresolvetheissueof
proprietyofthegrantofserviceincentiveleavetorespondentiswhetherornotheisafield
personnel.AccordingtoArticle82oftheLaborCode,fieldpersonnelshallrefertonon
agriculturalemployeeswhoregularlyperformtheirdutiesawayfromtheprincipalplaceof
businessorbranchofficeoftheemployerandwhoseactualhoursofworkinthefieldcannot
be determined with reasonable certainty. This definition is further elaborated in
theBureau of Working Conditions (BWC), Advisory Opinion to Philippine Technical
Clerical Commercial Employees Associationwhich 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
whosehoursanddaysofworkcannotbedeterminedwithreasonablecertainty;hence,they
are paid specific amount for rendering specific service or performing specific work.If
requiredtobeatspecificplacesatspecifictimes,employeesincludingdriverscannotbesaid
tobefieldpersonneldespitethefactthattheyareperformingworkawayfromtheprincipal
officeoftheemployee.
Same;Same;Same;Same;Thedefinitionofafieldpersonnelisnotmerelyconcerned
withthelocationwheretheemployeeregularlyperformshisdutiesbutalsowiththefact
that the employees performance is unsupervised by the employerin order to conclude
whetheranemployeeisafieldemployee,itisalsonecessarytoascertainifactualhoursof
workin thefield can bedetermined with reasonable certaintyby the employer.At this
point, it is necessary to stress that the definition of a field personnel is not merely
concernedwiththelocationwheretheemployeeregularlyperformshisdutiesbutalsowith
thefactthattheemployeesperformanceisunsupervisedbytheemployer.Asdiscussed
above,fieldpersonnelarethosewhoregularlyperformtheirdutiesawayfromtheprincipal
580

580 SUPREME COURT REPORTS

ANNOTATED
Auto Bus Transport Systems, Inc. vs.
Bautista
placeofbusinessoftheemployerandwhoseactualhoursofworkinthefieldcannotbe
determinedwithreasonablecertainty.Thus,inordertoconcludewhetheranemployeeisa
fieldemployee,itisalsonecessarytoascertainifactualhoursofworkinthefieldcanbe
determinedwithreasonable certaintybytheemployer. Insodoing,aninquirymustbe
madeastowhetherornottheemployeestimeandperformanceareconstantlysupervised
bytheemployer.
Same;Same;Same;Same;Bus Drivers and Conductors;A bus driverconductor, not
beingafieldpersonnelbutaregularemployeewhoperformstasksusuallynecessaryand
desirabletotheusualtradeofthecompanysbusiness,isentitledtothegrantofservice
incentive leave.As observed by the Labor Arbiter and concurred in by the Court of
Appeals:Itisofjudicialnoticethatalongtheroutesthatarepliedbythesebuscompanies,
there areitsinspectorsassigned at strategic places who board thebus and inspect the
passengers,thepunchedtickets,andtheconductorsreports.Thereisalsothemandatory
onceaweekcarbarnorshopday,wherethebusisregularlycheckedastoitsmechanical,
electrical,andhydraulicaspects,whetherornotthereareproblemsthereonasreportedby
thedriverand/orconductor.Theytoo,mustbeatspecificplaceas[sic]specifiedtime,as
theygenerallyobservepromptdepartureandarrivalfromtheirpointoforigintotheirpoint
ofdestination.Ineachandeverydepot,thereisalwaystheDispatcherwhosefunctionis
preciselytoseetoitthatthebusanditscrewleavethepremisesatspecifictimesand
arriveattheestimatedpropertime.These,arepresentinthecaseatbar.Thedriver,the
complainantherein,wasthereforeunderconstantsupervisionwhileintheperformanceof
thiswork.Hecannotbeconsideredafieldpersonnel.Weagreeintheabovedisquisition.
Therefore,ascorrectlyconcludedbytheappellatecourt,respondentisnotafieldpersonnel
butaregularemployeewhoperformstasksusuallynecessaryanddesirabletotheusual
tradeofpetitionersbusiness.Accordingly,respondent isentitledtothegrantofservice
incentiveleave.
Same;Same;Prescription;Inthecomputationofthethreeyearprescriptiveperiod,a
determinationmustbemadeastotheperiodwhentheactconstitutingaviolationofthe
workersrighttothebenefitsbeingclaimedwascommitted.Itissettledjurisprudencethat
acauseofactionhasthreeelements,towit,(1)arightinfavoroftheplaintiffbywhatever
meansandunderwhateverlawitarisesoris
581

VOL. 458, MAY 16, 2005 581

Auto Bus Transport Systems, Inc. vs.
Bautista
created; (2) an obligation on the part of the named defendant to respect or not to
violatesuchright;and(3)anactoromissiononthepartofsuchdefendantviolativeofthe
right of the plaintiff or constituting a breach of the obligation of the defendant to the
plaintiff.ToproperlyconstrueArticle291oftheLaborCode,itisessentialtoascertainthe
time when the third element of a cause of action transpired. Stated differently, in the
computationofthethreeyearprescriptiveperiod,adeterminationmustbemadeastothe
period when the act constituting a violation of the workers right to the benefits being
claimedwascommitted.Forifthecauseofactionaccruedmorethanthree(3)yearsbefore
thefilingofthemoneyclaim,saidcauseofactionhasalreadyprescribedinaccordancewith
Article291.
Same;Same;Same;It is essential to recognize that the service incentive leave is a
curiousanimalinrelationtootherbenefitsgrantedbylawtoeveryemployee;Iftheemployee
entitledtoserviceincentiveleavedoesnotuseorcommutethesame,heisentitleduponhis
resignation or separationfrom worktothe commutationof his accrued service incentive
leave.Itisessentialatthispoint,however,torecognizethattheserviceincentiveleaveis
acuriousanimalinrelationtootherbenefitsgrantedbythelawtoeveryemployee.Inthe
caseofserviceincentiveleave,theemployeemaychoosetoeitherusehisleavecreditsor
commuteittoitsmonetaryequivalentifnotexhaustedattheendoftheyear.Furthermore,
iftheemployeeentitledtoserviceincentiveleavedoesnotuseorcommutethesame,heis
entitleduponhisresignationorseparationfromworktothecommutationofhisaccrued
serviceincentiveleave.AsenunciatedbytheCourtinFernandezv.NLRC:Theclearpolicy
oftheLaborCodeistograntserviceincentiveleavepaytoworkersinallestablishments,
subjecttoafewexceptions.Section 2,RuleV,BookIIIoftheImplementingRulesand
Regulationsprovidesthat[e]veryemployeewhohasrenderedatleastoneyearofservice
shallbeentitledtoayearlyserviceincentiveleaveoffivedayswithpay.Serviceincentive
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,
includingauthorizedabsencesandpaidregularholidaysunlesstheworkingdaysinthe
establishment as a matter of practice or policy, or that provided in the employment
contracts, is less than 12months, in which case said period shall be considered as one
year.Itisalsocommutabletoitsmoneyequiva
582

582 SUPREME COURT REPORTS

ANNOTATED
Auto Bus Transport Systems, Inc. vs.
Bautista
lentifnotusedorexhaustedattheendoftheyear.Inotherwords,anemployeewho
hasservedforoneyearisentitledtoit.Hemayuseitasleavedaysorhemaycollectits
monetaryvalue.Tolimittheawardtothreeyears,asthesolicitorgeneralrecommends,is
toundulyrestrictsuchright.
Same;Same;Same;Withregardtoserviceincentiveleave,thethreeyearprescriptive
periodcommences,notattheendoftheyearwhentheemployeebecomesentitledtothe
commutationofhisserviceincentiveleave,butfromthetimewhentheemployerrefusesto
pay its monetary equivalent after demand or commutation or upon termination of the
employeesservices,asthecasemaybe.Correspondingly,itcanbeconscientiouslydeduced
thatthecauseofactionofanentitledemployeetoclaimhisserviceincentiveleavepay
accruesfromthemomenttheemployerrefusestoremunerateitsmonetaryequivalentif
the employee did not make use of said leave credits but instead chose to avail of its
commutation.Accordingly,iftheemployeewishestoaccumulatehisleavecreditsandopts
for its commutation upon his resignation or separation from employment, his cause of
actiontoclaimthewholeamountofhisaccumulated serviceincentive leave shallarise
whentheemployerfailstopaysuchamountatthetimeofhisresignationorseparation
fromemployment.ApplyingArticle291oftheLaborCodeinlightofthispeculiarityofthe
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
commutationofhisserviceincentiveleave,butfromthetimewhentheemployerrefusesto
pay its monetary equivalent after demand of commutation or upon termination of the
employeesservices,asthecasemaybe.
 Same;Same;Same;SocialJustice;TheCourtsconstrualofArt.291oftheLaborCode,
visvistherulesonserviceincentiveleave,isinkeepingwiththerudimentaryprinciple
thatintheimplementationandinterpretationoftheprovisionsoftheLaborCodeandits
implementing regulations, the workingmans welfare should be the primordial and
paramountconsideration.TheaboveconstrualofArt.291,visvistherulesonservice
incentiveleave,isinkeepingwiththerudimentaryprinciplethatintheimplementation
andinterpretationoftheprovisionsoftheLaborCodeanditsimplementingregulations,
the workingmans welfare should be the primordial and paramount consideration. The
policyistoextendtheapplicabil
583

VOL. 458, MAY 16, 2005 583

Auto Bus Transport Systems, Inc. vs.
Bautista
ityofthedecreetoagreaternumberofemployeeswhocanavailofthebenefitsunder
thelaw,whichisinconsonancewiththeavowedpolicyoftheStatetogivemaximumaid
andprotectiontolabor.

PETITIONforreviewoncertiorariofthedecisionandresolutionoftheCourtof
Appeals.

ThefactsarestatedintheopinionoftheCourt.
EdmundoA.Cruzforpetitioner.
JosephD.Sagampud,Jr.forprivaterespondent.

CHICONAZARIO,J.:

Before Us is a Petition for Review onCertiorariassailing the Decision and 1

Resolution of theCourt of Appeals affirming theDecision of theNational Labor

2 3

RelationsCommission(NLRC).TheNLRCrulingmodifiedtheDecisionoftheLabor
Arbiter(findingrespondententitledtotheawardof13thmonthpayandservice
incentiveleavepay)bydeletingtheawardof13thmonthpaytorespondent.
TheFacts
Since 24May1995, respondent Antonio Bautista has been employed by
petitionerAutoBusTransportSystems,Inc.(Autobus),asdriverconductorwith
travelroutesManilaTuguegaraoviaBaguio,BaguioTuguegaraoviaManilaand
ManilaTabukviaBaguio.Respondentwaspaidoncommissionbasis,sevenpercent
(7%)ofthetotalgrossincomepertravel,onatwiceamonthbasis.
_______________

CAG.R.SPNo.68395,dated06May2002,pennedbyAssociateJusticeAndresB.Reyes,Jr.with
1

AssociateJusticesConradoM.Vasquez,Jr.andMarioL.Guaria,III,concurring.
Dated12December2002.
2

NLRCNCRCANo.0265842000(NLRCCaseNo.RABCAR02008800),dated28September2001.
3
 584
584 SUPREME COURT REPORTS
ANNOTATED
Auto Bus Transport Systems, Inc. vs. Bautista
On03January2000,whilerespondentwasdrivingAutobusNo.114alongSta.Fe,
Nueva Vizcaya, thebushe was driving accidentally bumped the rear portion of
AutobusNo.124,asthelattervehiclesuddenlystoppedatasharpcurvewithout
givinganywarning.
Respondentaverredthattheaccidenthappenedbecausehewascompelledbythe
management togobackto Roxas,Isabela,although he hadnot slept foralmost
twentyfour (24) hours, as he had just arrived in Manila from Roxas, Isabela.
Respondentfurtherallegedthathewasnotallowedtoworkuntilhefullypaidthe
amountofP75,551.50,representingthirtypercent(30%)ofthecostofrepairofthe
damagedbusesandthatdespiterespondentspleasforreconsideration,thesame
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
incentiveleavepayagainstAutobus.
Petitioner,ontheotherhand,maintainedthatrespondentsemploymentwas
replete with offenses involving reckless imprudence, gross negligence, and
dishonesty. To support its claim, petitioner presented copies of letters, memos,
irregularityreports,andwarrantsofarrestpertainingtoseveralincidentswherein
respondentwasinvolved.
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
January2000.
On 29 September 2000, based on the pleadings and supporting evidence
presented by the parties, Labor Arbiter Monroe C. Tabingan promulgated a
Decision, thedispositiveportionofwhichreads:
4

_______________

4
NLRCCaseNo.RABCAR02008800.

585
VOL. 458, MAY 16, 2005 585
Auto Bus Transport Systems, Inc. vs. Bautista
WHEREFORE,allpremisesconsidered,itisherebyfoundthatthecomplaintforIllegal
Dismissal has no leg to stand on. It is hereby ordered DISMISSED, as it is hereby
DISMISSED.
However,stillbasedontheabovediscussedpremises,therespondentmustpaytothe
complainantthefollowing:
 1. a.his 13th month pay from the date of his hiring to the date of his dismissal,
presentlycomputedatP78,117.87;
2. b.hisserviceincentiveleavepayforalltheyearshehadbeeninservicewiththe
respondent,presentlycomputedatP13,788.05.

Allotherclaimsofbothcomplainantandrespondentareherebydismissedforlackof
merit. 5

NotsatisfiedwiththedecisionoftheLaborArbiter,petitionerappealedthedecision
totheNLRCwhichrendereditsdecisionon28September2001,thedecretalportion
ofwhichreads:
[T]heRulesandRegulationsImplementingPresidentialDecreeNo.851,particularlySec.
3provides:
Section3.Employerscovered.TheDecreeshallapplytoallemployersexceptto:
xxxxxxxxx
e)employersofthosewhoarepaidonpurelycommission,boundary,ortaskbasis,performinga
specificwork,irrespectiveofthetimeconsumedintheperformancethereof.

xxx.

Recordsshowthatcomplainant,inhispositionpaper,admittedthathewaspaidona
commissionbasis.
Inviewoftheforegoing,wedeemitjustandequitabletomodifytheassailedDecisionby
deletingtheawardof13thmonthpaytothecomplainant.
...
_______________

5
Rollo,pp.4647.

586
586 SUPREME COURT REPORTS
ANNOTATED
Auto Bus Transport Systems, Inc. vs. Bautista
WHEREFORE,theDecisiondated29September2000isMODIFIEDbydeletingtheaward
of13thmonthpay.TheotherfindingsareAFFIRMED. 6

Inotherwords,theawardofserviceincentiveleavepaywasmaintained.Petitioner
thussoughtareconsiderationofthisaspect,whichwassubsequentlydeniedina
ResolutionbytheNLRCdated31October2001.
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
subsequentlydeniedbytheappellatecourtinaDecisiondated06May2002,the
dispositiveportionofwhichreads:
WHEREFORE,premisesconsidered,thePetitionisDISMISSEDforlackofmerit;andthe
assailedDecisionofrespondentCommissioninNLRCNCRCANo.0265842000ishereby
AFFIRMEDintoto.Nocosts. 7
Hence,theinstantpetition.
Issues
1. 1.Whetherornotrespondentisentitledtoserviceincentiveleave;
2. 2.Whetherornotthethree(3)yearprescriptiveperiodprovidedunderArticle
291oftheLaborCode,asamended,isapplicabletorespondentsclaimof
serviceincentiveleavepay.

RulingoftheCourt
ThedispositionofthefirstissuerevolvesaroundtheproperinterpretationofArticle
95oftheLaborCodevisvisSection1(D),RuleV,BookIIIoftheImplementing
RulesandRegulationsoftheLaborCodewhichprovides:
_______________

Rollo,pp.5253.
6

CADecision,p.10;Rollo,p.24.
7

587
VOL. 458, MAY 16, 2005 587
Auto Bus Transport Systems, Inc. vs. Bautista
Art.95.RIGHTTOSERVICEINCENTIVELEAVE
(a)Everyemployeewhohasrenderedatleastoneyearofserviceshallbeentitledtoa
yearlyserviceincentiveleaveoffivedayswithpay.
BookIII,RuleV:SERVICEINCENTIVELEAVE
SECTION1.Coverage.Thisruleshallapplytoallemployeesexcept:
...
(d) Field personnel and other employees whose performance is unsupervised by the employer
includingthosewhoareengagedontaskorcontractbasis,purelycommissionbasis,orthosewhoare
paidinafixedamountforperformingworkirrespectiveofthetimeconsumedintheperformance
thereof;

...

Acarefulperusalofsaidprovisionsoflawwillresultintheconclusionthatthe
grantofserviceincentiveleavehasbeendelimitedbytheImplementingRulesand
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 toemployees classified as fieldpersonnel. The
phraseotheremployeeswhoseperformanceisunsupervisedbytheemployermust
not be understood as a separate classification of employees to which service
incentiveleaveshallnotbegranted.Rather,itservesasanamplificationofthe
interpretationofthedefinitionoffieldpersonnelundertheLaborCodeasthose
whose actual hours of work in the field cannot be determined with reasonable
certainty. 8
 Thesameistruewithrespecttothephrasethosewhoareengagedontaskor
contractbasis,purelycommissionbasis.Saidphraseshouldberelatedwithfield
personnel,applyingtheruleonejusdemgeneristhatgeneralandunlimitedterms
arerestrainedandlimitedbytheparticulartermsthatthey
_______________

8
SeeMercidar Fishing Corporation v. National Labor Relations Commission,G.R. No. 112574, 08
October1998,297SCRA440.

588
588 SUPREME COURT REPORTS
ANNOTATED
Auto Bus Transport Systems, Inc. vs. Bautista
follow. Hence, employees engaged on task or contract basis or paid on purely
9

commission basis are not automatically exempted from the grant of service
incentiveleave,unless,theyfallundertheclassificationoffieldpersonnel.
Therefore,petitionerscontentionthatrespondentisnotentitledtothegrantof
service incentive leave just because he was paid on purely commission basis is
misplaced.Whatmustbeascertainedinordertoresolvetheissueofproprietyofthe
grant of service incentive leave to respondent is whether or not he is a field
personnel.
AccordingtoArticle82oftheLaborCode,fieldpersonnelshallrefertonon
agriculturalemployeeswhoregularlyperformtheirdutiesawayfromtheprincipal
placeofbusinessorbranchofficeoftheemployerandwhoseactualhoursofworkin
thefieldcannotbedeterminedwithreasonablecertainty.Thisdefinitionisfurther
elaborated in theBureau of Working Conditions (BWC), Advisory Opinion to
PhilippineTechnicalClericalCommercialEmployeesAssociation whichstatesthat: 10

Asageneralrule,[fieldpersonnel]arethosewhoseperformanceoftheirjob/serviceisnot
supervised by the employer or his representative, the workplace being away from the
principalofficeandwhosehoursanddaysofworkcannotbedeterminedwithreasonable
certainty;hence,theyarepaidspecificamountforrenderingspecificserviceorperforming
specific work.If required to be at specific places at specific times, employees including
driverscannotbesaidtobefieldpersonneldespitethefactthattheyareperformingwork
awayfromtheprincipalofficeoftheemployee.[Emphasisours]

TothisdiscussionbytheBWC,thepetitionerdiffersandpostulatesthatundersaid
advisoryopinion,noemployeewouldeverbeconsideredafieldpersonnelbecause
every
_______________

9
Cebu Institute ofTechnology v. Ople,G.R. No. L 58870,18 December 1987,156 SCRA 629, 672,
citingVerav.Cuevas,G.R.No.L33693,31May1979,90SCRA379.
10
06April1989;Rollo.p.20.
 589
VOL. 458, MAY 16, 2005 589
Auto Bus Transport Systems, Inc. vs. Bautista
employer,inonewayoranother,exercisescontroloverhisemployees.Petitioner
furtherarguesthattheonlycriterionthatshouldbeconsideredisthenatureof
workoftheemployeeinthat,iftheemployeesjobrequiresthatheworksaway
from the principal office like that of a messenger or abusdriver, then he is
inevitablyafieldpersonnel.
Wearenotpersuaded.Atthispoint,itisnecessarytostressthatthedefinitionof
afieldpersonnelisnotmerelyconcernedwiththelocationwheretheemployee
regularlyperformshisdutiesbutalsowiththefactthattheemployeesperformance
isunsupervisedbytheemployer.Asdiscussedabove,fieldpersonnelarethosewho
regularly perform their duties away from the principal place of business of the
employerandwhoseactualhoursofworkinthefieldcannotbedeterminedwith
reasonable certainty.Thus, in order to conclude whether an employee is a field
employee,itisalsonecessarytoascertainifactualhoursofworkinthefieldcanbe
determinedwithreasonablecertaintybytheemployer.Insodoing,aninquirymust
bemadeastowhetherornottheemployeestimeandperformanceareconstantly
supervisedbytheemployer.
AsobservedbytheLaborArbiterandconcurredinbytheCourtofAppeals:
Itisofjudicialnoticethatalongtheroutesthatarepliedbythesebuscompanies,thereare
itsinspectorsassignedatstrategicplaceswhoboardthebusandinspectthepassengers,
thepunchedtickets,andtheconductorsreports.Thereisalsothemandatoryonceaweek
carbarnorshopday,wherethebusisregularlycheckedastoitsmechanical,electrical,
andhydraulicaspects,whetherornotthereareproblemsthereonasreportedbythedriver
and/or conductor. They too, must be at specific place as [sic] specified time, as they
generallyobservepromptdepartureandarrivalfromtheirpointoforigintotheirpointof
destination. In each and every depot, there is always the Dispatcher whose function is
preciselytoseetoitthatthebusanditscrewleavethepremisesatspecifictimesand
arriveattheestimatedpropertime.These,arepresentinthecaseatbar.Thedriver,the
complainantherein,wastherefore

590
590 SUPREME COURT REPORTS
ANNOTATED
Auto Bus Transport Systems, Inc. vs. Bautista
underconstantsupervisionwhileintheperformanceofthiswork.Hecannotbeconsidered
afieldpersonnel. 11

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

appellatecourt, respondent is not a fieldpersonnel but a regular employee who
performstasksusuallynecessaryanddesirabletotheusualtradeofpetitioners
business.Accordingly,respondentisentitledtothegrantofserviceincentiveleave.
 The question now that must be addressed is up to what amount of service
incentiveleavepayrespondentisentitledto.
Theresponsetothisqueryinevitablyleadsustothecorrelativeissueofwhether
ornotthethree(3)yearprescriptiveperiodunderArticle291oftheLaborCodeis
applicabletorespondentsclaimofserviceincentiveleavepay.
Article291oftheLaborCodestatesthatallmoneyclaimsarisingfromemployer
employeerelationshipshallbefiledwithinthree(3)yearsfromthetimethecause
ofactionaccrued;otherwise,theyshallbeforeverbarred.
IntheapplicationofthissectionoftheLaborCode,thepivotalquestiontobe
answered is when does the cause of action for money claims accrue in order to
determinethereckoningdateofthethreeyearprescriptiveperiod.
Itissettledjurisprudencethatacauseofactionhasthreeelements,towit,(1)a
rightinfavoroftheplaintiffbywhatevermeansandunderwhateverlawitarises
oriscreated;(2)anobligationonthepartofthenameddefendanttorespectornot
to violate such right; and (3) an act or omission on the part of such defendant
violativeoftherightoftheplaintifforconstitutingabreachoftheobligationofthe
defendanttotheplaintiff. 12

_______________

Rollo,pp.4546.
11

BaliwagTransit,Inc.v.Ople,G.R.No.57642,16March1989,171SCRA250,citingAgric.Credit&
12

CooperativeFinancing

591
VOL. 458, MAY 16, 2005 591
Auto Bus Transport Systems, Inc. vs. Bautista
ToproperlyconstrueArticle291oftheLaborCode,itisessentialtoascertainthe
timewhenthethirdelementofacauseofactiontranspired.Stateddifferently,in
the computation of the threeyear prescriptive period, a determination must be
madeastotheperiodwhentheactconstitutingaviolationoftheworkersrightto
thebenefitsbeingclaimedwascommitted.Forifthecauseofactionaccruedmore
thanthree(3)yearsbeforethefilingofthemoneyclaim,saidcauseofactionhas
alreadyprescribedinaccordancewithArticle291. 13

Consequently, in cases of nonpayment of allowances and other monetary

benefits,ifitisestablishedthatthebenefitsbeingclaimedhavebeenwithheldfrom
theemployeeforaperiodlongerthanthree(3)years,theamountpertainingtothe
periodbeyondthethreeyearprescriptiveperiodisthereforebarredbyprescription.
Theamountthatcanonlybedemandedbytheaggrievedemployeeshallbelimited
totheamountofthebenefitswithheldwithinthree(3)yearsbeforethefilingofthe
complaint. 14

Itisessentialatthispoint,however,torecognizethattheserviceincentiveleave
is a curious animal in relation to other benefits granted by the law to every
employee.Inthecaseofserviceincentiveleave,theemployeemaychoosetoeither
usehisleavecreditsorcommuteittoitsmonetaryequivalentifnotexhaustedat
theendoftheyear. Furthermore,iftheemployeeentitledtoserviceincentiveleave
15

doesnotuseor
_______________

Administration v. Alpha Ins. & Surety Co., Inc.,G.R. No. L24566, 29 July 1968,24 SCRA
151;SummitGuarantyandInsuranceCo.,Inc.v.DeGuzman,G.R.No.L50997,30June1987,151SCRA
389;Tormonv.Cutanda,G.R.No.L18785,23December1963,9SCRA698.
13
SeeDeGuzman,etal.v.CourtofAppealsandNasipitLumberCo.,G.R.No.132257,12October
1998,297SCRA743.
14
SeeE. Ganzon, Inc. v. National Labor Relations Commission,G.R. No. 123769, 22 December
1999,321SCRA434.
15
Fernandez v.NationalLaborRelationsCommission,G.R.No.105892,28January 1998,349 Phil
65;285SCRA149.

592
592 SUPREME COURT REPORTS
ANNOTATED
Auto Bus Transport Systems, Inc. vs. Bautista
commutethesame,heisentitleduponhisresignationorseparationfromworkto
thecommutationofhisaccruedserviceincentiveleave.AsenunciatedbytheCourt
inFernandezv.NLRC: 16

TheclearpolicyoftheLaborCodeistograntserviceincentiveleavepaytoworkersinall
establishments,subjecttoafewexceptions.Section2,RuleV,BookIIIoftheImplementing
RulesandRegulationsprovidesthat[e]veryemployeewhohasrenderedatleastoneyear
ofserviceshallbeentitledtoayearlyserviceincentiveleaveoffivedayswithpay.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,includingauthorizedabsencesandpaidregularholidaysunlesstheworkingdays
intheestablishmentasamatterofpracticeorpolicy,orthatprovidedintheemployment
contracts, is less than 12months, in which case said period shall be considered as one
year.Itisalsocommutabletoitsmoneyequivalentifnotusedorexhaustedattheendof
the year. In other words, an employee who has served for one year is entitled to it.
Hemayuse it asleave daysor hemaycollect its monetary value.To limit the awardto
threeyears,asthesolicitorgeneralrecommends,istoundulyrestrictsuchright. [Italics 17

supplied]

Correspondingly,itcanbeconscientiouslydeducedthatthecauseofactionofan
entitledemployeetoclaimhisserviceincentiveleavepayaccruesfromthemoment
theemployerrefusestoremunerateitsmonetaryequivalentiftheemployeedidnot
make use of said leave credits but instead chose to avail of its commutation.
Accordingly,iftheemployeewishestoaccumulatehisleavecreditsandoptsforits
commutation upon his resignation or separation from employment, his cause of
actiontoclaimthewholeamountofhisaccumulatedserviceincentiveleaveshall
arisewhentheemployerfailstopaysuchamountatthetimeofhisresignationor
separationfromemployment.
_______________

16
Ibid.
17
Ibid.,pp.9495.

593
VOL. 458, MAY 16, 2005 593
Auto Bus Transport Systems, Inc. vs. Bautista
ApplyingArticle291oftheLaborCodeinlightofthispeculiarityoftheservice
incentive leave, we can conclude that the three (3)year prescriptive period
commences,notattheendoftheyearwhentheemployeebecomesentitledtothe
commutationofhisserviceincentiveleave,butfromthetimewhentheemployer
refuses to pay its monetary equivalent after demand of commutation or upon
terminationoftheemployeesservices,asthecasemaybe.
TheaboveconstrualofArt.291,visvistherulesonserviceincentiveleave,isin
keeping with the rudimentary principle that in the implementation and
interpretationoftheprovisionsoftheLaborCodeanditsimplementingregulations,
the workingmans welfare should be the primordial and paramount
consideration. Thepolicyistoextendtheapplicabilityofthedecreetoagreater
18

number of employees who can avail of the benefits under the law, which is in
consonancewiththeavowedpolicyoftheStatetogivemaximumaidandprotection
tolabor. 19

Inthecaseatbar,respondenthadnotmadeuseofhisserviceincentiveleavenor
demandedforitscommutationuntilhisemploymentwasterminatedbypetitioner.
Neitherdidpetitionercompensatehisaccumulatedserviceincentiveleavepayat
the time of his dismissal. It was only upon his filing of a complaint for illegal
dismissal, onemonth from thetime ofhis dismissal,that respondent demanded
fromhisformeremployercommutationofhisaccumulatedleavecredits.Hiscause
ofactiontoclaimthepaymentofhisaccumulatedser
_______________

18
Abella v. National Labor Relations Commission,G.R.No.L71813,20July 1987,152 SCRA 140,
citingVolkschelLaborUnionv.BureauofLaborRelations,G.R.No.L45824,19June1985,137SCRA43.
19
Sarmiento v. Employees Compensation Commission,G.R. No. L68648, 24 September 1986,144
SCRA 421, citingCristobal v. Employees Compensation Commission,G.R. No. L49280, 26 February
1981,103SCRA329;Acostav.EmployeesCompensationCommission,G.R.No.L55464,12November
1981,109SCRA209.

594
594 SUPREME COURT REPORTS
ANNOTATED
Auto Bus Transport Systems, Inc. vs. Bautista
viceincentiveleavethusaccruedfromthetimewhenhisemployerdismissedhim
andfailedtopayhisaccumulatedleavecredits.
Therefore,theprescriptiveperiodwithrespecttohisclaimforserviceincentive
leave pay only commenced from the time the employer failed tocompensatehis
accumulated service incentive leave pay at the time of his dismissal. Since
respondenthadfiledhismoneyclaimafteronlyonemonthfromthetimeofhis
dismissal, necessarily, his money claim was filed within the prescriptive period
providedforbyArticle291oftheLaborCode.
WHEREFORE,premisesconsidered,theinstantpetitionisherebyDENIED.The
assailed Decision of the Court of Appeals in CAG.R. SP. No. 68395 is hereby
AFFIRMED.NoCosts.
SOORDERED.
Puno(Chairman),AustriaMartinez,Callejo,Sr.andTinga,JJ.,concur.

Petitiondenied,assaileddecisionaffirmed.
Notes.Although fishermen perform nonagricultural work away from their
employersbusinessoffices,thefactremainsthatthroughoutthedurationoftheir
worktheyareundertheeffectivecontrolandsupervisionoftheemployerthrough
thevesselspatronormaster.(MercidarFishingCorporationvs.NationalLabor
RelationsCommission,297SCRA440[1998])
Piecerateemployeesarenotentitledtoserviceincentiveleavepayaswellas
holidaypayeveniftheyareentitledtootherbenefitslikeCOLAand13thmonth
pay. (Mark Roche International vs. National Labor Relations Commission,313
SCRA356[1999])

o0o

595