OCOP, Feliz Kathleen D.

Labor

SOCIETE INTERNATIONALE DE TELECOMMUNICATIONS AERONAUTIQUES V.

HULIGANGA
GR NO. 215504
August 20, 2018

Facts:
Respondent Huliganga was hired by the petitioner SITA and thereafter, became the
Country Operating Officer, the highest accountable officer of SITA in the Philippines. This was
his current position when he retired. He received his retirement benefits computed at 1.5
months of basic pay for each year of service.

Respondent filed a complaint against SITA for unfair labor practices, underpayment of
salary/wages, moral and exemplary damages, attorney’s fees, underpayment of sick and
vacation leave and retirement benefits. He alleged that the payment factor that applies to him
should be 2 months and not 1.5 months for every year of service in accordance with the 2005-
2010 CBA and also because the rate in the 2005-2010 CBA is already a well-established
company practice of SITA.

Petitioner contended that respondent has already received from SITA the full amount of
his retirement benefits and that the respondent presented no credible evidence that it has been
an established practice of SITA to amend its employment regulations for personnel recruited by
SITA by adopting the improved economic benefits in the CBA.

Issue:
Whether or not the contention of the petitioner that the payment factor to be used should
be 1.5 and not 2 months based on the 2005-2010 CBA?

Law Analysis:
Article 245 of the Labor Code expressly states that “managerial employees are not
eligible to join, assist or form any labor organization." An exception to this prohibition is when
the employer extends the CBA benefits to the managerial employee as a matter of policy or
established practice.

Case History:
On 29 September 2009, the Labor Arbiter dismissed the complaint by the respondent
against herein petitioner. On appeal, the NLRC denied the motion for reconsideration. After the
denial, Huliganga filed a petition on certiorari on March 21, 2014 with the CA. The CA ruled that
Huliganga was able to prove that the new and/or additional economic benefits arising from the
CBA as amendments to the Employee Regulations Manual has ripened into a company practice
and thereby granting the petition.
Ruling:
The SC ruled that Huliganga failed to substantially establish that there is an established
company practice of extending CBA concessions to managerial employees. He only presented
the affidavit of Delia M. Beaniza which said affidavit deserves scant consideration for lack of
competency on the part of Beaniza to determine whether it should be considered as company
practice. Moreover, to be considered a company practice, the giving of the benefits should have
been done over a long period of time, and must be shown to have been consistent and
deliberate. The test or rationale of this rule on long practice requires an indubitable showing that
the employer agreed to continue giving the benefits knowing fully well that said employees are
not covered by the law requiring payment thereof.

More importantly, it is indisputable that the complainant was occupying a managerial

position which under the Labor Code is not eligible to join, assist or form any labor organization
thus, he is not entitled to retirement benefits exclusively granted to the rank-and-file employees
under the CBA.

Opinion:
Company practice should be done over a long period of time so that there will be an
expectation on the part of the employees of these practices. The respondent should have
presented sufficient and convincing evidence that such practice is existing for a long period of
time.

ROBINA FARMS CEBU v. VILLA

GR NO. 175869
April 18, 2016

Facts:
Respondent Villa had been employed by the petitioner as sales clerk. During the
employment, respondent availed herself of the company’s special retirement program. The
petitioner suspended the respondent for her failure to issue invoices for the unhatched eggs in
the months of January to February. When the suspension ended, she reported back to work and
was subsequently informed that her application for the special retirement program had been
denied. Later on, she was advised to tender her resignation so that she may avail the financial
assistance in lieu of the retirement program she applied for but the respondent had manifested
her intention to return to work however, the petitioner had confiscated her gate pass and
prevented her from entering the company premises.

Respondent filed a complaint against herein petitioner for illegal suspension, illegal
dismissal, nonpayment of overtime pay, and nonpayment of service incentive leave pay.

Issue:
(a) Whether respondent was illegally dismissed
 (b) Whether respondent may avail her overtime pay

Law Analysis:
Section 4(c), Rule I, Book III of the Omnibus Rules Implementing the Labor Code
relevantly states as follows:

Section 4. Principles in determining hours worked. – The following general principles shall
govern in determining whether the time spent by an employee is considered hours worked for
purposes of this Rule:

(a) x x x.

(b) x x x.

(c) If the work performed was necessary, or it benefited the employer, or the employee could not
abandon his work at the end of his normal working hours because he had no replacement, all
time spent for such work shall be considered as hours worked, if the work was with the
knowledge of his employer or immediate supervisor. (bold emphasis supplied)

(d) x x x.

Case History:
On 21 August 2003, the LAbor Arbiter ruled in favor of herein petitioner finding that Villa
had not been dismissed from employment because there was no compulsion since the choice
was left entirely to her. However the NLRC, on February 23, 2005, reversed and set aside the
decision of the Labor Arbiter. It ruled that petitioner illegally dismissed Villa.

Ruling:
(a) YES. It is clear that private respondent was not admitted immediately after her
suspension. Records show that when private respondent reported back after her
suspension, she was advised by Lucy de Guzman not to report back anymore as her
application was approved, which was latter on disapproved. Moreover, petitioner’s
contention that respondent voluntarily retire because of her continued persistence on the
retirement program is without merit. Retirement is the result of a bilateral act of both the
employer and the employee based on their voluntary agreement that upon reaching a
certain age, the employee agrees to sever his employment. The difficulty in the case of
Villa arises from determining whether the retirement was voluntary or involuntary. In
determining the employee’s voluntariness it should be based on his/her intention which
clearly, in the case at bar, was lacking.
(b) NO. Firstly, entitlement to overtime pay must first be established by proof that the
overtime work was actually performed before the employee may properly claim the
benefit. The burden of proving entitlement to overtime pay rests on the employee
because the benefit is not incurred in the normal course of business. Failure to prove
such actual performance transgresses the principles of fair play and equity. The DTRs
 presented by the respondent did not not substantially prove the actual performance of
overtime work. An employee could render overtime work only when there was a prior
authorization therefor by the management. Without the prior authorization, therefore,
Villa could not validly claim having performed work beyond the normal hours of work.

Opinion:
The SC correctly pointed out that the intention should be the in determining the
voluntariness of the employee. It is an act that only the employee, and not the employer, can
ascertain.

PIGCALUAN v. REYES
GR NO. 173648
January 16, 2012

Facts:
Petitioner Pigcaluan filed a complaint with the Labor Arbiter against SCII for
underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive
leave and 13th month pays. On the other hand, respondent claimed that the petitioner was paid
their just salaries and other benefits in accordance with the law; that their holiday pay were
already included in the computation of their monthly salaries; that they were paid additional
premium of 30% in addition to their basic salary whenever they were required to work on
Sundays and 200% of their salary for work done on holidays; and, that Canoy and Pigcaulan
were paid the corresponding 13th month pay for the years 1998 and 1999. In support thereof,
copies of payroll listings and lists of employees who received their 13th month pay for the
periods December 1997 to November 1998 and December 1998 to November 19999 were
presented.

Issue:
Whether the petitioner is entitled of the said benefits

Law Analysis:
Article 94 of the Labor Code provides that:

ART. 94. RIGHT TO HOLIDAY PAY. – (a) Every worker shall be paid his regular daily wage
during regular holidays, except in retail and service establishments regularly employing less
than ten (10) workers;

xxxx

While Article 95 of the Labor Code provides:

ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. – (a) Every employee who has rendered at
least one year of service shall be entitled to a yearly service incentive of five days with pay.
Case History:
The Labor Arbiter in its 2002 decision ruled in favor of the complainant giving credence
to the itemized computations and representative daily time records submitted by the petitioner.
The NLRC sustained this decision. Upon petition with the CA, the CA set aside the rulings of the
NLRC and found that there were no factual and legal bases mentioned in the questioned rulings
to support the conclusions made. Consequently, it dismissed all the monetary claims of Canoy
and Pigcaulan.

Ruling:
The SC ruled the Labor Arbiter and the NLRC erred in ordering the reimbursement of the
overtime pay in favor of Canoy and Pigcaulan. The handwritten itemized computations are self-
serving, unreliable and insubstantial evidence to sustain the grant of salary differentials,
particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of
verifying the truth of the handwritten entries stated therein. With regard to the holiday pay,
service incentive leave pay and proportionate 13th month pay for year 2000, Pigcaulan is
entitled to his regular rate on holidays even if he does not work. Likewise, express provision of
the law entitles him to service incentive leave benefit for he rendered service for more than a
year already. Furthermore, under Presidential Decree No. 851, he should be paid his 13th
month pay. As employer, SCII has the burden of proving that it has paid these benefits to its
employees. SCII failed to show any other concrete proof by means of records, pertinent files or
similar documents reflecting that the specific claims have been paid. With respect to 13th month
pay, SCII presented proof that this benefit was paid but only for the years 1998 and 1999. The
burden of proving payment of these monetary claims rests on SCII, being the employer. It is a
rule that one who pleads payment has the burden of proving it.

Opinion:
The ruling of the SC is correct. This benefits must be analyzed first to determine their
legal basis and whether these should be paid or not to the employees.

OUR HAUS REALTY DEVELOPMENT CORP v. ENRICO

GR NO. 204651
August 6, 2014

Facts:
Respondents were all laborers of the petitioner. Due to the financial distress the
petitioner experienced in May 2010, they suspended some of their construction projects and
asked the affected employees to take vacation leaves. Among these employees were the
respondents. Soon after, respondents were asked to report back but instead of doing so, they
filed a complaint against herein petitioner for underpayment of their daily wages. Respondents
claimed that petitioner failed to pay them their holiday, service incentive leave, 13th month and
overtime pays.
Issue:
Whether the respondents are entitled of the said benefits.

Law Analysis:

Under Section 16 of DOLE Department Order (DO) No. 13, series of 1998, employers engaged
in the construction business are required to provide the following welfare amenities:

16.1 Adequate supply of safe drinking water

16.2 Adequate sanitary and washing facilities

16.3 Suitable living accommodation for workers, and as may be applicable, for their families

16.4 Separate sanitary, washing and sleeping facilities for men and women workers.

Additionally, DOLE DO No. 56, series of 2005 mandates that the cost of the
implementation of the requirements for the construction safety and health of workers, shall be
integrated to the overall project cost.

Case History:
The LA ruled in favor of the petitioner. The LA held that if the reasonable values of the
board and lodging would be taken into account, the respondents’ daily wages would meet the
minimum wage rate. As to the other benefits, the LA found that the respondents were not able
to substantiate their claims for it. Upon appeal, the NLRC reversed the decision of the LA citing
the case of Mayon Hotel v. Adana. The NLRC noted that the respondents did not authorize Our
Haus in writing to charge the values of their board and lodging to their wages.

The CA dismissed Our Haus’ certiorari petition and affirmed the NLRC rulings in toto.
Our Haus failed to prove that it complied with any of the requirements laid down in Mabeza v.
National Labor Relations Commission. Accordingly, it cannot consider the values of its meal and
housing facilities in the computation of the respondents’ total wages.

Ruling:
The SC found that the attempt of the petitioner to give a substantial distinction between
deducting and charging was to justify its non-compliance with the requirements for the
deductibility of a facility. Also, the petitioner’s contention that the facility is customarily furnished
by trade is without merit. Our Haus did not show if these benefits were also provided its other
construction projects, thus negating its claimed customary nature.

Furthermore, such amenities, as part of the project cost that construction companies
already charge to their clients, the value of the housing of their workers cannot be charged
again to their employees’ salaries. Our Haus cannot pass the burden of the OSH costs of its
construction projects to its employees by deducting it as facilities. This is Our Haus’ obligation
under the law. Additionally, if a benefit or privilege granted to the employee is clearly for the
employer’s convenience, it will not be considered as a facility but a supplement.

"Supplements", therefore, constitute extra remuneration or special privileges or benefits

given to or received by the laborers over and above their ordinary earnings or wages.
"Facilities", on the other hand, are items of expense necessary for the laborer's and his family's
existence and subsistence so that by express provision of law (Sec. 2[g]), they form part of the
wage and when furnished by the employer are deductible therefrom. If it is primarily for the
employee’s gain, then the benefit is a facility; if its provision is mainly for the employer’s
advantage, then it is a supplement. Again, this is to ensure that employees are protected in
circumstances where the employer designates a benefit as deductible from the wages even
though it clearly works to the employer’s greater convenience or advantage.

Opinion:
The SC correctly ruled in favor of the petitioner. It is clear that the amenities given were
supplements rather than facilities. The items provided were given freely by SLL for the purpose
of maintaining the efficiency and health of its workers while they were working at their respective
projects.