Rogeline R.

Magno
Block A

MANILA TERMINAL CO. V. CIR

L-4148
July 16, 1952

Facts:

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.
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. The private respondent sent a letter to Department of Labor requesting that
the matter of overtime pay be investigated. But nothing was done by the Dept of Labor. Later on, the
petitioner instituted the system of strict eight-hour shifts.
The private respondent 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.

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 ordered the petitioner to pay to its police force but regards to overtime service after the
watchmen had been integrated into the Manila Harbor Police, the 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. The petitioner filed a motion for reconsideration.
The Association also filed a motion for reconsideration in so far its other demands were dismissed. Both
resolutions were denied. The public respondent decision was to pay the private respondents their
overtime on regular days at the regular rate and additional amount of 25 percent, overtime on Sundays
and legal holidays at the regular rate only, and watchmen are not entitled to night differential pay for past
services. The petitioner has filed a present petition for certiorari.

Issue:
Whether overtime pay should be granted to the workers

Held:

Yes, Petitioner stressed that the contract between it and the Association stipulates 12 hrs a day at certain
rates including overtime, but the record does not bear out these allegations.
In times of acute employment, people go from office to office to search for work, and the workers here
found themselves required to render 12 hrs a day. True, there was an agreement, but did the workers
have freedom to bargain much less insist in the observance of the Eight Hour Labor Law?
We note that after petitioner instituted 8 hr shifts, no reduction was made in salaries which its watchmen
received under the 12 hr agreement.
Petitioner’s allegation that the Association had acquiesced in the 12 hr shifts for more than 18 mos is not
accurate. Only one of the members entered in September 1945. The rest followed during the next few
months.
The Association can’t be said to have impliedly waived the right to overtime pay, for the obvious reason
that it could not have expressly waived it.
Estoppel and laches can’t also be invoked against Association. First, it is contrary to spirit of the Eight
Hour Labor Law. Second, law obligates employer to observe it. Third, employee is at a disadvantage as
to be reluctant in asserting any claim.
The argument that the nullity of the employment contract precludes recovery by the Association of
overtime pay is untenable. The employer may not be heard to plead its own neglect as exemption or
defense.
Also, Commonwealth Act 444 expressly provides for payment of extra compensation in cases where
overtime services are required.
The point that payment of overtime pay may lead to ruin of the petitioner can’t be accepted. It is
significant that not all watchmen should receive back overtime pay for the whole period, since the
members entered the firm in different times.
The Eight-Hour Labor Law 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.