G.R. No. 79255 Supreme Court En Banc (GUTIERREZ, JR, J.

)
UNION OF FILIPRO EMPLOYEES January 20, 1992
VS. VIVAR JR.

ISSUE:
Whether or not the actual hours of work of Respondents sales personnel in the field can be
determined with reasonable certainty.

RULING:
No. The Court finds that in deciding whether or not an employee's actual working hours in the
field can be determined with reasonable certainty, query must be made as to whether or not such
employee's time and performance is constantly supervised by the employer.

Since the Supervisor of the Day (SOD) schedule of these personnel does not in the least signify that these
sales personnel's time and performance are supervised, it fails to see how the company can monitor the
number of actual hours spent in field work by an employee. The purpose of this schedule is merely to
ensure that the sales personnel are out of the office not later than 8:00 a.m. and are back in the office not
earlier than 4:00 p.m.

Moreover, the criteria for granting incentive bonus of Respondents sales personnel are:

(1) attaining or exceeding sales volume based on sales target;

(2) good collection performance;
(3) proper compliance with good market hygiene;
(4) good merchandising work;
(5) minimal market returns; and
(6) proper truck maintenance.

The above criteria indicate that these personnel are given incentive bonuses precisely because of the
difficulty in measuring their actual hours of field work. These employees are evaluated by the result of
their work and not by the actual hours of field work which are hardly susceptible to determination.

In San Miguel Brewery, Inc. v. Democratic Labor Organization (1963), the Court had occasion to discuss
the nature of the job of a salesman. Citing the case of Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d
202, the Court stated:

The reasons for excluding an outside salesman are fairly apparent. Such a salesman, to a greater extent,
works individually. There are no restrictions respecting the time he shall work and he can earn as much
or as little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away from his employer's place of business, is not subject
to the personal supervision of his employer, and his employer has no way of knowing the number of hours
he works per day.

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Carlos vs Villegas Supreme Court En Banc (PARDO, J.)
G.R. No. 142907 November 29, 2000

ISSUE:

Are employees falling under the civil service law such as members of the Uniformed Force Division of the
Manila Fire Department, who were required to render overtime service on work days and holidays,
entitled to collect overtime pay for overtime services rendered?

RULING:

No, such employees are not entitled to collect overtime pay for overtime services rendered. The Eight-
Hour Labor Law was not intended to apply to civil service employees who are still governed by the
provisions of the Revised Administrative Code specifically Section 566 which provides for the extension of
hours and required overtime work; that when the interests of the public service so require, the daily hour
of labor may be extended and employees may be required to do overtime work not only during the regular
working days but also during holidays, and Section 259 which provides for inhibition against payment of
extra compensation; that in the absence of special provision, persons regularly and permanently
appointed under the Civil Service Law or whose salary, wages or emoluments are fixed by law or regulation
shall not, for any service rendered or labor done by them on holidays or for other overtime work, receive
or be paid any additional compensation.

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G.R. No. L-18939 Supreme Court En Banc (BAUTISTA ANGELO, J.)
NAWASA vs. August 31, 1964
NAWASA Consolidated Union

Issue:
1. Whether or not NAWASA is performing governmental functions and, therefore, essentially a service
agency of the government.
2. Whether or not NAWASA is a public utility and, therefore, exempted from paying additional
compensation for work on Sundays and legal holidays.
3. Whether or not the intervenors are "managerial employees" within the meaning of Republic Act 2377
and, therefore, not entitled to the benefits of Commonwealth Act No. 444.
4. What is the correct method to determine the equivalent daily wage of a monthly salaried employee,
especially in a firm which is a public utility?

Ruling:
1. No, NAWASA is not an agency performing governmental functions. Rather, it performs proprietary
functions, and as such comes within the coverage of Commonwealth Act No. 444. While under republic
Act No. 1383 the NAWASA is considered as a public corporation it does not show that it was so created
for the government of a portion of the State. There are two kinds of public corporation, namely, municipal
and non-municipal. A municipal corporation is the body politic established by law particularly as an agency
of the State to assist in the civil government of the country chiefly to regulate the local and internal affairs
of the city or town that is incorporated. Non- municipal corporations, on the other hand, are public
corporations created as agencies of the State for limited purposes to take charge merely of some public
or state work other than community government. The National Waterworks and Sewerage Authority was
not created for purposes of local government. It was created for the "purpose of consolidating and
centralizing all waterworks, sewerage and drainage system in the Philippines under one control and
direction and general supervision." The NAWASA therefore, though a public corporation, is not a
municipal corporation, because it is not an agency of the State to regulate or administer the local affairs
of the town, city, or district which is incorporated. Moreover, the NAWASA, by its charter, has personality
and power separate and distinct from the government. It is an independent agency of the government
and it may charge rates for its services.
2. Yes, NAWASA is a public utility because its primary function is to construct, maintain and operate water
reservoirs and waterworks for the purpose of supplying water to the inhabitants, as well as consolidate
and centralize all water supplies and drainage systems in the Philippines. A public utility is exempt from
paying additional compensation for work on Sundays and legal holidays conformably to Section 4 of
Commonwealth Act No. 444. However, by virtue of the contractual obligation NAWASA has with the
respondent unions, it has obligated itself for the payment of additional compensation.
3. No. One of the distinguishing characteristics managerial employee may be known as expressed in the
explanatory note of Republic Act No. 2377 is that he is not subject to the rigid observance of regular office
hours. The true worth of his service does not depend so much on the time he spends in office but more
on the results he accomplishes. In fact, he is free to go out of office anytime. The philosophy behind the
exemption of managerial employees from the 8-Hour Labor Law is that such workers are not usually
employed for every hour of work but their compensation is determined considering their special training,
experience or knowledge which requires the exercise of discretion and independent judgment, or perform
work related to management policies or general business operations along specialized or technical lines.
For these workers it is not feasible to provide a fixed hourly rate of pay or maximum hours of labor. In this
case, the functions, duties and responsibilities of the intervenors do not bear any direct relation with the
management of the NAWASA, nor do they participate in the formulation neither of its policies nor in the

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hiring and firing of its employees. Moreover, they are required to observe working hours and record their
time work and are not free to come and go to their offices, or move about at their own discretion.
4. It is evident that Republic Act 1880 does not intend to raise the wages of the employees over what they
are actually receiving. Rather, its purpose is to limit the working days in a week to five days, or to 40 hours
without however permitting any reduction in the weekly or daily wage of the compensation which was
previously received.
a. It has been held that for purposes of computing overtime compensation a regular wage includes all
payments which the parties have agreed shall be received during the work week, including piece work
wages, differential payments for working at undesirable times, such as at night or on Sundays and
holidays, and the cost of board and lodging customarily furnished the employee. The "regular rate" of pay
also ordinarily includes incentive bonus or profit-sharing payments made in addition to the normal basic
pay, and it was also held that the higher rate for night, Sunday and holiday work is just as much a regular
rate as the lower rate for daytime work. The higher rate is merely an inducement to accept employment
at times which are not as desirable from a workman's standpoint
b. The way to determine the daily rate of a monthly employee is to divide the monthly salary by the actual
number of working hours in the month. Thus, Section 8 (g) of Republic Act No. 1161, as amended by
Republic Act 1792, provides that the daily rate of compensation is the total regular compensation for the
customary number of hours worked each day. In other words, the correct computation shall be (a) the
monthly salary divided by the actual of working hours in a month or (b) the regular monthly compensation
divided by the number of working days in a month.

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