[150] TRANS-ASIA PH. EMP. ASSOC. (TAPEA) & GALVEZ v.
NLRC & DE CASTRO pay to employees who are permitted to work on a regular holiday.
G.R. No. 118289 | December 13, 1999 | J. Kapunan
SUMMARY: Based on a new CBA between TAPEA and Trans-Asia, TAPEA filed a claim
alleging non-payment of holiday pay for the period covered by the previous CBA. Trans-
Asia claims that its use of 286 days as its divisor for the computation of overtime pay
and daily rate is compliant with the requirements of the Labor Code. The court agreed,
but clarified that it should use 287 instead.
DOCTRINE: Sec 6 (d) of IRR of RA 6727 provides that if the employee does not work
and is not paid for all Saturdays and Sundays the divisor should be “262”. But since the
employees are required to work half day for every Sat “26” should be added to the
divisor. However due to the fact that the employees rest day falls on a Sunday, the
number of unworked and unpaid legal holidays should be reduced from 10 to 9.
Therefore: 262 + 26 – 1= 287 must be used. However the “287” divisor cannot be
applied for the computation of benefits due to Sec 100 of Labor Code which prohibits
diminution of benefits. The “287” adjustment can however still be used for the
computation of deductions due to employee absences
FACTS:
● TAPEA, the duly organized collective bargaining agent of the monthly-[ain
rank-and-file employees of Trans-Asia Ph., executed a CBA with Trans-Asia,
effective from April 1, 1988 – March 31, 1991. It provided for holiday pay
stipulating that compensation for work on a legal holiday is 200% of regular
wage + 60% premium pay
● Despite this CBA, the issue on holiday pay from January 1985 to December
1987 remained unsettled. They underwent preventive mediation meetings,
but no amicable settlement was reached.
● Hence, a complaint was filed with the LA, seeking payment for their holiday
pay in arrears. Said complaint was then amended to include the payment of
holiday pay for the previous CBA (1988-1991), unfair labor practice, damages
and attorney’s fees.
● TAPEA claims that their monthly pay did not include holiday pay. They stated
that:
○ Trans-Asia’s Employees’ Manual requires that a pre-condition for
holiday pay was that Appointment papers have no stipulation on the
inclusion of holiday pay in monthly salary.
○ Under the Trans-Asia Employees Manual there was a precondition
for holiday pay:
■ That the employee should either have worked or on
authorized leave w/pay the day before a legal holiday.
○ In the current CBA, there was a provision for the payment of an
amount equivalent to 200% of the regular daily wage + 60% premium
They argue that this was a tacit admission of the non-payment of the
holiday pay during the period prior to the CBA.
● TAPEA ultimately claims that the inclusion of holiday pay in the current CBA
is at the same time an admission by Trans-Asia of its failure to pay the same
in the past.
● Trans-asia on the other hand asserted that the above circumstances are not
indicative of its non-payment of holiday pay. It argues that it has always
honored the labor law provision on holiday pay by incorporating such in the
monthly salary even before the current CBA
○ They use the divisor of “286” days when computing employee’s
overtime pay and daily rate deductions for absences.
( 52 x 44 ) / 8 = 286 days
● 52 = number of weeks in a year
● 44 = number of hours per week
● 8 = work hours per day
● Trans-Asia claims using “286” already accounts for the (10) regular holidays
in a year since it only subtracts from the 365 calendar days the unworked and
unpaid 52 Sundays and 26 Saturdays (26 Saturdays and not 52 since
employees are required to work half day on all Saturdays)
○ If the 10 holidays were not included the divisor would be “277” (only
-9 since 1 holiday is always a Sunday)
○ The use of “286” is consistent with RA 6640 w/c has a divisor of
“262” for those with no work/pay on weekends
○ Trans-asia then factors-in the 26 Saturdays hence resulting divisor
is “286”
● Trans-asia also claims that the “generous” CBA provision was included to
comply with Sec 4, Rule 4, Book3 of Omnibus Rules and not an admission of
non-payment in previous years
o It stands firm that it has honored the rules of holiday pay by
including it in the “286” divisor
● LA and NLRC ruled in favor of Trans-Asia – holiday pay already included in
“286” divisor
ISSUE w/ HOLDING & RATIO:
W/N Trans-Asia included holiday pay in the “286” divisor – YES
● The 10 legal holidays are already accounted for in the “286” divisor
○ If the 52 Sundays and 26 Saturdays in which there was no work done
are subtracted from 365 days in a year the resulting divisor would be
286 (Court notes that this should actually be 287 days days)
○ The 10 regular working holidays were never subtracted from the #
of days worked
 ■ Therefore the payment of holiday pay is already included
in the divisor
● TAPEA’s reliance on Chartered Bank Employees Association vs. Ople is wrong
since it is not on all 4’s

■ o Facts of Chartered show that the bank was using

different divisors for the computation of employee benefit
(251) as against the computation for deductions (365)
● Due to this difference there existed doubt as to
whether holiday pay was being incorporated –
hence resolve doubt in favor of labor
■ In the case at bar Res has been consistently using “286” for
all computations
● · The court notes that the divisor should be adjusted to “287”
■ Sec 6 (d) of IRR of RA 6727 provides that if the employee
does not work and is not paid for all Saturdays and Sundays
the divisor should be “262”
■ But since the employees are required to work half day for
every Sat “26” should be added to the divisor
■ o 262 +26 = 288 (this includes all 10 holidays)
● However due to the fact that the employees rest
day falls on a Sunday, the number of unworked
and unpaid legal holidays should be reduced from
10 to 9
● Because Nat’l Hero’s day always falls on a Sun
● Therefore: 262 + 26 – 1= 287
● However the “287” divisor cannot be applied for the computation of benefits
due to Sec 100 of Labor Code which prohibits diminution of benefits:
● The “287” adjustment can however still be used for the computation of
deductions due to employee absences
● In view of this situation, the Court rules that the adjusted divisor of “287” days
should only be used by Trans-Asia for computations which would be
advantageous to petitioners, i.e., deductions for absences, and not for
computations which would diminish the existing benefits of the employees,
i.e., overtime pay, holiday pay and leave conversions.

HELD: NLRC AFFIRMED w/ MODIFICATION