UNION OF FILIPRO EMPLOYEES (UFE), petitioner,
vs.
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS
COMMISSION and NESTLÉ PHILIPPINES, INC. (formerly
FILIPRO, INC.), respondents.
We used to have ten (10) regular holidays. This is the reason
for the 251 divisor, used by some companies in computing the
daily wage, which represents the 365 days of the year, less 52
Saturdays, 52 Sundays and the 10 legal holidays. The new law
added one more regular holiday – the Eid’l Fitr. We thus have
eleven (11) regular holidays under R.A. 9492:
New Year’s Day (January 1)
Maundy Thursday (Movable date)
Good Friday (Movable date)
Eid’l Fitr (Movable date)
Araw ng Kagitingan – Bataaan and Corregidor Day (Monday
nearest April 9)
Labor Day (Monday nearest May 1)
Independence Day (Monday nearest June 12)
National Heroes Day (Last Monday of August)
Bonifacio Day (Monday nearest November 30)
Christmas Day (December 25)
Rizal Day (Monday nearest December 30)
The Labor Code provides that every worker shall be paid his
daily wage during regular holidays. Employers are now
required to pay for an extra regular holiday.
Facts:
On November 8, 1985, respondent Filipro, Inc. (now Nestle
Philippines, Inc.) filed with the National Labor Relations
Commission (NLRC) a petition for claims of its monthly paid
employees for holiday pay.
Abitrator Vivar: Filipro to pay its monthly paid employees
holiday pay pursuant to Art 94 of Labor Code, subject to
exclusions and limitations in Art 82.
Filipro filed a motion for clarification seeking (1) the limitation of
the award to three years, (2) the exclusion of salesmen, sales
representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel)
from the award of the holiday pay, and (3) deduction from the
holiday pay award of overpayment for overtime, night
differential, vacation and sick leave benefits due to the use of
251 divisor.
Petitioner UFE answered that the award should be made
effective from the date of effectivity of the Labor Code, that
their sales personnel are not field personnel and are therefore
entitled to holiday pay, and that the use of 251 as divisor is an
established employee benefit which cannot be diminished.
Arbitrator Vivar: On January 14, 1986, the respondent
arbitrator issued an order declaring that the effectivity of the
holiday pay award shall retroact to November 1, 1974, the date
of effectivity of the Labor Code. He adjudged, however, that
the company’s sales personnel are field personnel and, as
such, are not entitled to holiday pay. He likewise ruled that with
the grant of 10 days’ holiday pay, the divisor should be
changed from 251 to 261 and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sick
leave pay due to the use of 251 days as divisor.
Issues:
1) Whether or not Nestle’s sales personnel are entitled to
holiday pay; and
2) Whether or not, concomitant with the award of holiday pay,
the divisor should be changed from 251 to 261 days and
whether or not the previous use of 251 as divisor resulted in
overpayment for overtime, night differential, vacation and sick
leave pay.
Held:
1. Sales personnel are not entitled to holiday pay.
Under Article 82, field personnel are not entitled to holiday pay.
Said article defines field personnel as “non-agritultural
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.”
The law requires that the actual hours of work in the field be
reasonably ascertained. The company has no way of
determining whether or not these sales personnel, even if they
report to the office before 8:00 a.m. prior to field work and
come back at 4:30 p.m, really spend the hours in between in
actual field work.
Moreover, the requirement that “actual hours of work in the
field cannot be determined with reasonable certainty” must be
read in conjunction with Rule IV, Book III of the Implementing
Rules which provides:
Rule IV Holidays with Pay
Sec. 1. Coverage — This rule shall apply to all employees
except:
xxx xxx xxx
(e) Field personnel and other employees whose time and
performance is unsupervised by the employer . . . (Emphasis
supplied)
Hence, 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.
2. The divisor in computing the award of holiday pay should
1
still be 251 days.
While in that case the issue was whether or not salesmen were
entitled to overtime pay, the same rationale for their exclusion
as field personnel from holiday pay benefits also applies.
The petitioner union also assails the respondent arbitrator’s
ruling that, concomitant with the award of holiday pay, the
divisor should be changed from 251 to 261 days to include the
additional 10 holidays and the employees should reimburse the
amounts overpaid by Filipro due to the use of 251 days’
divisor.
Bank case nor from the date of effectivity of the Labor Code,
but from October 23, 1984, the date of promulgation of the
IBAA case (Insular Bank of Asia and America Employees’
Union (IBAAEU) v. Inciong, where the court declared that Sec
2, Rule IV, Book III of IRR which excluded monthly paid
employees from holiday pay benefits, are null and void).
WHEREFORE, the order of the voluntary arbitrator in hereby
MODIFIED. The divisor to be used in computing holiday pay
shall be 251 days. The holiday pay as above directed shall be
computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED

The 251 working days divisor is the result of subtracting all

Saturdays, Sundays and the ten (10) legal holidays from the
total number of calendar days in a year. If the employees are
already paid for all non-working days, the divisor should be 365
and not 251.

In the petitioner’s case, its computation of daily ratio since

September 1, 1980, is as follows:

monthly rate x 12 months / 251 days

The use of 251 days’ divisor by respondent Filipro indicates

that holiday pay is not yet included in the employee’s salary,
otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no

intervening salary increases, is a constant figure for the
purpose of computing overtime and night differential pay and
commutation of sick and vacation leave credits. Necessarily,
the daily rate should also be the same basis for computing the
10 unpaid holidays.

The respondent arbitrator’s order to change the divisor from

251 to 261 days would result in a lower daily rate which is
violative of the prohibition on non-diminution of benefits found
in Article 100 of the Labor Code. To maintain the same daily
rate if the divisor is adjusted to 261 days, then the dividend,
which represents the employee’s annual salary, should
correspondingly be increased to incorporate the holiday pay.

To illustrate, if prior to the grant of holiday pay, the employee’s

annual salary is P25,100, then dividing such figure by 251
days, his daily rate is P100.00 After the payment of 10 days’
holiday pay, his annual salary already includes holiday pay and
totals P26,100 (P25,100 + 1,000). Dividing this by 261 days,
the daily rate is still P100.00. There is thus no merit in
respondent Nestle’s claim of overpayment of overtime and
night differential pay and sick and vacation leave benefits, the
computation of which are all based on the daily rate, since the
daily rate is still the same before and after the grant of holiday
pay.

SC Decision:

The Court thereby resolves that the grant of holiday pay be

effective, not from the date of promulgation of the Chartered