MA. JEAN B.

CASTAEDA
Arellano University School of Law
Labor Law 1 Atty. Porfirio DG. Panganiban, Jr.

#1
Case Title:
G.R. No.:
Date:
Petitioner:
Respondent:
Ponente:

PAN AMERICAN WOLRD AIRWAYS SYSTEM (PHIL.) V. PAN

AMERICANEMPLOYEES ASSOCIATION
L - 16275
February 23, 1961
Pan American Wolrd Airways System (Phil.)
Pan American Employees Association
J. Reyes, J.B.L.

Facts:
Appeal by certiorari from the decision of the Court of Industrial Relations in case No.
1055 V dated October 10, 1959, and its resolution en banc denying the motion for
reconsideration by the petitioner herein. The Court orders to compute the overtime
compensation due the aforesaid fourteen (14) aircraft mechanic and the 2 employees
from the Communication Department based on the time sheet of said employees from
February 23, 1952 July 15, 1958 and to submit his report within 30 days for further
disposition by the court. Petitioner contends that the finding of that the 1 hour meal
period should be considered work(deducting 15 minutes as time allowed for eating) is
not supported by substantial evidence.
Issue:
Whether or not the 1 hour meal period should be considered as overtime work (after
deducting 15minutes)?
Held:
Yes. The Court ruled that during the so called meal period, the mechanics were required
to standby for emergency work; that if they happened not to be available when called,
they were reprimanded by the lead man; that as in fact it happened on many occasions,
the mechanics had been called from their meals or told to hurry Employees Association
up eating to perform work during this period. Judgment appealed from is affirmed. Cost
against appellant.
#2
Case Title:
G.R. No.:
Date:
Petitioner:
Ma. Jean B. Castaeda

University of Pangasinan Faculty Union vs. University of

Pangasinan and National Labor Relations Commission
L - 63122
February 20, 1984
University of Pangasinan Faculty Union
Page 1

Respondent:
Ponente:

University of Pangasinan and National Labor Relations

Commission
Gutierrez, Jr., J.

Nature of the Case:

Petition for review on certiorari pursuant to Rule 65 of the Rules of Court to annul and to
set aside the decision of the National Labor Relations Commission (NLRC) dated
October 25, 1982, dismissing the appeal of University of Pangasinan Faculty Union in
NLRC Case No. RBI-47-82.
Facts:
University of Pangasinan Faculty Union is a labor union composed of faculty members
of the University of Pangasinan, an educational institution duly organized and existing
by virtue of the laws of the Philippines.The Unions members are full-time professors,
instructors, and teachers of respondent University. These teachers are paid their
salaries on a regular monthly basis.
From November 7 to December 5, during the semestral break, the teachers were not
paid their ECOLA. The university claims that the teachers are not entitled thereto
because the semestral break is not an integral part of the school year and there being
no actual services rendered by the teachers during said period, the principle of "No
work, no pay" applies.
During the same school year (1981-1982), the university was authorized by the Ministry
of Education and Culture to collect, as it did collect, from its students a fifteen (15%)
percent increase of tuition fees. Petitioners members demanded a salary increase
effective the first semester of said schoolyear to be taken from the sixty (60%) percent
incremental proceeds of the increased tuition fees.
Issues:
(1) Whether or not the University of Pangasinan Faculty Unions Members are entitled
to ECOLA during the semestral break from November 7 to December 5, 1981 of the
1981-82 School Year.
(2) Whether or not 60% of the Incremental Proceeds of Increased Tuition Fees shall be
devoted exclusively to Salary Increase.
Held:
(1)
Various Presidential Decrees on ECOLAs to wit: PDs 1614, 1634, 1678 and 1713,
provide, "Allowances of Fulltime Employees . . ." that "Employees shall be paid in full
the required monthly allowance regardless of the number of their regular working days if
they incur no absences during the month. If they incur absences without pay, the
amounts corresponding to the absences may be deducted from the monthly allowance .
Ma. Jean B. Castaeda

Page 2

. ." ; and on "Leave of Absence Without Pay", that "All covered employees shall be
entitled to the allowance provided herein when they are on leave of absence with pay."
The "No work, no pay" principle does not apply in the instant case. It is clear from the
aforequoted provision of law that it contemplates a "no work" situation where the
employees voluntarily absent themselves. Petitioners, in the case at bar, certainly do
not, ad voluntatem, absent themselves during semestral breaks. Rather, they are
constrained to take mandatory leave from work. For this, they cannot be faulted nor can
they be begrudged that which is due them under the law.
(2)
Section 3 of Presidential Decree 451, provides:
SEC. 3. Limitations. The increase in tuition or other school fees or other charges as
well as the new fees or charges authorized under the next preceding section shall be
subject to the following conditions:
"(a) That no increase in tuition or other school fees or charges shall be approved unless
sixty (60%) per centum of the proceeds is allocated for increase in salaries or wages of
the members of the faculty and all other employees of the school concerned, and the
balance for institutional development, student assistance and extension services, and
return to investments: x
x
x
The law is clear. The sixty (60%) percent incremental proceeds from the tuition increase
are to be devoted entirely to wage or salary increases which means increases in basic
salary.
Petition for certiorari is GRANTED. The private respondent is ordered to pay its regular
fulltime teachers/employees emergency cost of living allowances for the semestral
break from November 7 to December 5, 1981 and the undistributed balance of the sixty
(60%) percent incremental proceeds from tuition increases for the same schoolyear.
#3
Case Title:

LUZON STEVEDORING CO., INC., VS. LUZON MARINE

DEPARTMENT UNION ANDTHE HON. MODESTO
CASTILLO,
THE HON. JOSE S. BAUTISTA, THE HON.
V.JIMENEZ YANSON
and THE HON. JUAN L. LANTING,
JUDGE OF THE COURT
OFINDUSTRIAL RELATIONS
G.R. No.:
L 9265
Date:
April 29, 1957
Petitioner:
Luzon Stevedoring Co., Inc.
Respondent:
Luzon Marine Department Union And The Hon. Modesto Castillo,
The Hon. Jose S.Bautista, The Hon. V. Jimenez Yanson And
The
Hon. Juan L. Lanting
Ponente:
J.Felix

Ma. Jean B. Castaeda

Page 3

Facts:
Petition for review on certiorari in the resolution of the Court of Industrial Relations.
Herein respondents filed a petition with the CIR containing the full recognition of the
right of Collective bargaining, close shop and check off. Also, that the work performed in
excess of 8 hours be paid an overtime pay of 50 per cent the regular rate of pay, and
that work performed on Sundays and legal holidays be paid double the regular rate of
pay. In one of the hearing of the case, the Court ruled that the employees are only
entitled to receive overtime pay for work rendered in excess of 8 hours on ordinary days
including Sundays and legal holidays. Herein petitioner sought for the reconsideration of
the decision only in so far as it interpreted that the period during which a seaman is
aboard a tugboat shall be considered as working time for the purpose of the 8 hours
Labor Law. However, it was denied. Hence, this petition.
Issue:
Whether or not the definition of hours of work as presently applied to dry land laborers
equally applicable to seaman?
Held:
No. The Court ruled that we do not need to set for seaman a criterion different from that
applied to laborers on land, that the only thing to be done is to determine the meaning
and scope of the term working place. A laborer need not leave the premises of the
factory, shop or boat in order that his period of rest shall not be counted, it being enough
that he cease to work may rest completely and leave or may leave at his will the spot
where he actually stays while working, to go somewhere else, whether within or outside
the premises of said factory, shop or boat. If these requires are complied with, the
period of such rest shall not be counted. Claimants rendered services to the Company
from 6am to 6pmincluding Sundays and holidays, which implies either that said laborers
were not given any recess at all,or that they were not allowed to leave the spot their
working place, or that they could not rest completely. Resolutions of the Court of
Industrial Relations appealed from are affirmed with costs against petitioner.
#4
Case Title:
AGENCIES,
G.R. No.:
Date:
Petitioner:
Respondent:
Ponente:

JULIO N. CAGAMPAN ET AL. VS. NATIONAL LABOR

RELATIONS
COMMISSIONAND
ACE
INC.
G.R. No. 85122 - 24
March 22, 1991
Julio N. Cagampan
NLRC And Ace Maritime Agencies, Inc.
J. Paras

MARITIME

Facts:
Petitioners, all seamen, entered into separate contracts of employment with the Golden
Light Ocean Transport, Ltd; through its local agency, the Ace Maritime Agencies, Inc.
Ma. Jean B. Castaeda

Page 4

Petitioners worked from May 7, 1985 until July 12, 1986. Later, petitioners collectively
and / or individually filed complaints for non payment of overtime pay, vacation pay and
terminal pay against private respondents. They also claimed that they signed a blank
contract. Also, although they agreed to work on board the vessel Rio Colorado
managed by Golden Light Ocean Transport, Ltd., the vessel they really boarded was
MV SOICI managed by Columbus Navigation. Two (2) petitioners argued that although
they were employed as Ordinary Seaman, they actually performed the work and duties
of Able Seaman. Hence, this petition.
Issue:
Whether or not petitioners should be entitled to overtime pay?
Held:
No. The Court ruled that entitlement to overtime pay must first be established by proof
that said overtime work was actually performed, before an employee way avail of said
benefit. The contract provision means that the fixed overtime pay 30% would be the
basis for computing the overtime pay if and when overtime work would be rendered. For
the employer to give him overtime pay for extra bonus hours when he might be sleeping
or attending to his personal chores or even just lulling away his time would be extremely
unfair and unreasonable. The criterion is determining whether or not seamen are
entitled to overtime pay is not, whether they were on board and cannot leave the ship
beyond the regular8 working hours a day, but whether they actually rendered service
in excess of said number of hours. The decision of the NLRC is affirmed with the
modification that petitioners Cagampan and Vicera are awarded their leave pay
according to the terms of contract.
#5
Case Title:
WORKERS
G.R. No.:
Date:
Petitioner:
Respondent:
Ponente:

NATIONAL DEVELOPMENT COMPANY VS. COURT OF

INDUSTRIAL RELATIONSAND NATIONAL TEXTILE
UNION
L 15422
November 30, 1962
National Development Company
Court Of Industrial Relations And National Textile Workers Union
J. Regala

Facts:
Case for review from the Court of Industrial Relations. The National Development
Company or government owned and controlled corporation had four shifts of work.8am
4pm6am 2pm2pm 10pm10pm6pmEach shift had 1 hr meal time period, to wit;
from (1) 11am to 12nn for those working between 6am and 2pm and from (2) 7pm to
8om for those working between 2pm and 10pm.The records show that although there
was a one hour meal time, petitioner nevertheless credited the workers with 8 hours of
work for each shift and paid them for the same number of hours. Also, whenever
Ma. Jean B. Castaeda

Page 5

workers in one shift were required to continue working until the next shift, petitioner has
been paying them for six hours only, and argued that the 2 hours corresponding to the
mealtime periods should not be included in computing compensation. Respondents,
whose members are employed at the NDC, asked the court of Industrial Relations to
order the payment of additional overtime pay corresponding to the mealtime
periods.CIR issued an order holding that mealtime should be counted in determining
overtime work and ordered to pay P101, 407.96 by way of overtime compensation.
Petitioners filed a motion for reconsideration but were dismissed by the CIR. Hence, this
petition.
Issue:
Whether or not on the basis of evidence, the mealtime breaks should be considered
working time?
Held:
Yes. The Court ruled that when the work is not continuous, the time which the laborer is
not working place and can rest completely shall not be counted. Claimants herein
rendered services to the Company from 6am 6pm implies either that they were not
allowed to leave the spot of their working place, or that they could not rest completely.
The CIRs finding that work in the petitioner company was continuous and did not permit
employees and laborers to rest completely is not without basis in evidence. The
timecards show that the work was continuous and without interruption breaks should be
counted as working time for purposes of overtime compensation. Order of March 19,
1959 and the resolution of April27, 1959 are hereby affirmed and the appeal is
dismissed.
#6
Case Title:
(ALUG.R.
Date:
Petitioner:
Respondent:
Ponente:

SIME DARBY PILIPINAS, INC. VS. NLRC (2NDDIVISION) AND

SIME DARBYSALARIED EMPLOYEES ASSOCIATION
TUCP)
No.:G.R. No. 119205
April 15, 1998
Sime Darby Pilipinas, Inc.
NLRC (2ndDivision) And Sime Darby Salaried Employees
Association (ALU-TUCP)
J. Bellosillo

Facts:
Special Civil Action in the Supreme Court. Certiorari. Petitioner is engaged in the
manufacture of automotive tires, tubes and other rubber products. Private respondent is
an association of monthly salaried employees of petitioner at its Marikina factory.
Beforehand, all company factory workers in Marikina including members of private
respondent union worked from 7:45am to 3:45pm with a 30-minute paid on call lunch
break.
Ma. Jean B. Castaeda

Page 6

Petitioner issued a memorandum to all factory- based employees advising all its
monthly salaried employees in its Marikina Tire Plant, except those in the Warehouse
and Quality Assurance Department working on shifts. Private respondent felt affected
adversely by the change in the work schedule and discontinuance of the 30-minute paid
on call lunch break, hence the filling of complaint for unfair labor practice,
discrimination and evasion of liability. The Labor Article dismissed the complainant on
the ground that the change in the work schedule and the elimination of the 30-minute
paid lunch break of factory workers constituted a valid exercise of management
prerogative and did not decrease the benefits granted to factory workers as the working
time did not go beyond 8 hours. Hence, this petition.
Issue:
Whether or not there was a diminution of benefits when the 30-minute paid lunch break
was eliminated?
Held:
The right to fix the work, schedules of the employees rests principally on their employer.
The petitioner cites as reason for the adjustment the efficient conduct of its business
operations and its improved production. Since the employees are no longer required
during this one-hour lunch break, there is no more need for them to be compensated for
this period. The new work schedule fully complies with the daily work period of eight (8)
hours without violating the Labor Code. Also, the new schedule applies to all employees
in the factory similarly situated whether they are union members or not; Even as the law
is solicitous of the welfare of the employees; it must also protect the right of an
employer to exercise what are clearly management prerogatives; Management retains
the prerogative, whenever exigencies of the service so require, to change the working
hours of its employees Petition is granted. The dismissed complaint against petitioner
for unfair labor practice is affirmed.
#7
Case Title:
G.R. No.:
Date:
Petitioner:
Respondent:
Ponente:

MERCURY DRUG COMPANY INCORPORATED VS. NARDO

DAYAO, ET AL.
L-30452
September 30, 1982
Mercury Drug Company, Incorporated
Nardo Dayao
J.Gutierrez, Jr.

Facts:
Petition for review on certiorari of the decision of the Court of Industrial Relations.
Herein respondent, filed a petition against Mercury Drug Company, Incorporated
contenting: 1)payment of their unpaid back wages for work done on Sundays and legal
holidays plus 25% additional compensation from date of their employment up to June
30, 1962; 2) payment of the extra compensation on work done at night; 3) reinstatement
Ma. Jean B. Castaeda

Page 7

of Januario Referente and Oscar Echalar to their former positions with back salaries;
and as against the respondent union, for its disestablishment and the refund of all
monies it had collected from petitioners. Mercury Drug is hereby ordered to pay the 69
petitioners another additional sum or premium equivalent to 25% of their respective
basic or regular salaries for night time services rendered from March20, 1961 up to
June 30, 1962. Hence, this petition.
Issue:
Whether or not private respondents are entitled for night time work premiums although
there is a waiver of said claims and the total absence of evidence there on?
Held:
Yes. Work done at night should be paid more than work done at daytime, and that if that
work is done beyond the workers regular hours of duty, he should also be paid
additional compensation for overtime work; Ruling of C.I.R awarding additional pay for
night time work is supported by evidence. No additional evidence was necessary to
prove that the private respondents were entitled to additional compensation for whether
or not they were entitled to the same is a question of law which the respondent court
answered correctly. The waiver rule does not apply in the case at bar. Additional
compensation for night time work is founded on public policy; hence the same cannot
be waived. Petition is dismissed.
#8
Case Title:
G.R. No.:
Date:
Petitioner:
Respondent:
Ponente:

NATIONAL SHIPYARDS AND STEEL CORPORATION VS.

COURT OF INDUSTRIALRELATIONS
L-17068
December 30, 1961
National Shipyards And Steel Corporation
Court Of Industrial Relations
J. Reyes

Facts:
Petition for review by certiorari of the orders of the Court of Industrial relations requiring
it to pay its bargeman, Malondras, an overtime service of 16 hours a day for a period
from January 1, 1954 -December 31, 1956, and from January 1, 1957 to April 30, 1957,
inclusive. NASSOO, engaged in the business of ship building and repair that needs a
service of a bargeman. Bargeman are required to stay in their barges for on call duty, so
they are given living quarters and subsistence allowance of P1.50 per day during the
time they are on board. However, Malondras filed with the Industrial Court a complaint
for the payment of overtime compensation because of his exclusion from the second
report of the examiner. The examiner then submitted an amended report giving
Malondras an average of 16 overtime hours a day, and recommending the payment to
him of P15, 242.15as overtime compensation during the period covered by the report.
Hence, this petition.
Ma. Jean B. Castaeda

Page 8

Issue:
Whether or not respondent Malondras is entitled to 16 hours a day overtime pay?
Held:
No. The Court ruled that the correct criterions in determining whether or not sailors are
entitled to overtime pay is not whether they were on board and cannot leave ship
beyond the regular eight working hours a day, but whether they actually rendered
service in excess of said number of hours; In such much as the parties show that the
subsistence allowance is independent of and has nothing to do with whatever additional
compensation for overtime work was due the petitioner, the same should not be
deducted from his overtime compensation. Respondent Malondras should be credited
(5) overtime hours instead of (16) hours a day for the periods covered by the examiners
report. Order appealed is affirmed with modifications.
#9
Case Title:
G.R. No.:
Date:
Petitioner:
Respondent:
Ponente:

Bisig ng Manggagawa ng Philippine Refining Co., Inc. vs.

Philippine Refining Co., Inc.
L-27761
September 30, 1981
Bisig ng Manggagawa ng Philippine Refining Co.
Philippine Refining Co., Inc.
Abad Santos, J.:

Facts of the case:

In 1966, petitioner union Bisig ng Manggagawa ng Philippine Refining Company, Inc.
filed with the Court of First Instance of Manila a petition for declaratory relief seeking,
among others, the judgement that their Christmas bonus be included as part of their
basic pay for the computation of overtime pay. Petitioner based its contention primarily
on the ruling of the Supreme Court in NAWASA vs. NAWASA Consolidated Unions, et
all G.R. No. L-18938, August 31, 1964, 11 SCRA 766 where it was declared that the
'regular rate' is also deemed to include other incentives and bonuses which employers
may receive as part of their regular pay.
Respondent Philippine Refining Company, Inc. on the other hand contended that in their
collective bargaining agreement (CBA), the parties never intended to include the
employees' Christmas bonus in the computation of the overtime pay, and that it did
agree to raise the overtime rate to 50% instead of 25% of the regular base pay precisely
on the consideration that it be based only on the regular base pay and should not
include Christmas bonus.
Issue:

Ma. Jean B. Castaeda

Page 9

The issue resolved by the Supreme Court was whether or not, in the interpretation of
the provision of the CBA of the parties on overtime pay, the term "regular base pay"
should include Christmas bonus, and that in case it should not, whether such
interpretation would contravene the principle established in the Nawasa vs Nawasa
case.
Ruling:
The Supreme Court ruled that the term "regular base pay" is clear, unequivocal and
requires no interpretation. It held that the term means regular basic pay which
necessarily EXCLUDES money received in different concepts such as Christmas bonus
and other fringe benefits. The Court observed that in framing up their CBA especially on
the provision regarding overtime pay, it was only the regular base pay that was
considered, and the same fact was undeniably known to the petitioner - the very reason,
according to the court, why it attempted to have a different provision pertaining to
overtime pay which would include Christmas bonus and other benefits. This factual
information by itself constrains the petitioner to question the intention of that particular
phrase in their CBA pertaining to overtime pay but could only claim that it violated the
Nawasa doctrine and insist that it be reformed to conform to the said doctrine.
The Supreme Court held that the Nawasa ruling did not limit that the computation of
overtime pay to be based solely on the employees' regular wage or salary, which
according to law includes bonuses and other benefits. What is important is that the
product resulting from the computation must always be equal or higher than the
statutory requirement of 25% more than the regular wage. In the case at bar, the
formula adopted by the CBA is 50% more than the regular basi pay, which when
computer is much higher than what can be arrived at using the statutory formula. Thus,
the Court declared that the provisions of the CBA as to the computation of overtime pay
has amply complied with what is required by law, and therefore is valid and not in
contravention to the Nawasa doctrine.

#10
Case Title:

G.R. No.:
Date:
Petitioner:
Respondent:
Ponente:

PHILIPPINE NATIONAL BANK vs. PHILIPPINENATIONALBANK

EMPLOYEES ASSOCIATION (PEMA) and COURT OF
INDUSTRIAL RELATIONS
L-30279
July 30, 1982
PHILIPPINE NATIONAL BANK
PHILIPPINENATIONALBANK EMPLOYEES ASSOCIATION
(PEMA) and COURT OF INDUSTRIAL RELATIONS
Barredo, J.

NATURE
Ma. Jean B. Castaeda

Page 10

Appeal from decision of the Court of Industrial Relations (CIR).

FACTS
PNB and PNB Employees Association (PEMA) had a dispute regarding the
proper computation of overtime pay. PEMA wanted the cost of living allowance
(granted in 1958) and longevity pay (granted in 1961) to be included in the
computation. PNB disagreed and the 2 parties later went before the CIR to
resolve the dispute.

CIR decided in favor of PEMA and held that PNB should compute the overtime
pay of its employees on the basis of the sum total of the employees basic salary
or wage plus cost of living allowance and longevity pay. The CIR relied on the
ruling in NAWASA v NAWASA Consolidated Unions, which held that for
purposes of computing overtime compensation, regular wage includes all
payments which the parties have agreed shall be received during the work week,
including differentiated payments for working at undesirable times, such as at
night and the board and lodging customarily furnished the employee. This
prompted PNB to appeal, hence this case.

ISSUE
WON the cost of living allowance and longevity pay should be included in the
computation of overtime pay as held by the CIR.
HELD
No. Overtime pay is for extra effort beyond that contemplated in the employment
contract; additional pay given for any other purpose cannot be included in the basis for
the computation of overtime pay.
Absence of specific provision in the CBA, the bases for the computation of overtime pay
are 2 computations, namely:
1. WON the additional pay is for extra work done or service rendered; and
2. WON the same is intended to be permanent and regular, not contingent nor
temporary as a given only to remedy a situation which can change any time.
Held:

Ma. Jean B. Castaeda

Page 11

Longevity pay cannot be included in the computation of overtime pay for the very
simple reason that the contrary is expressly stipulated in the CBA, which
constitutes the law between the parties.

As regards cost of living allowance, there is nothing in Commonwealth Act 444

[or the 8-hour Labor Law, now Art. 87 Labor Code] that could justify PEMAs
posture that it should be added to the regular wage in computing overtime pay.
C.A. 444 prescribes that overtime work shall be paid at the same rate as their
regular wages or salary, plus at least 25% additional. The law did not define
what is a regular wage or salary. What the law emphasized is that in addition to
regular wage, there must be paid an additional 25% of that regular wage to
constitute overtime rate of pay. Parties were thus allowed to agree on what shall
be mutually considered regular pay from or upon which a 25% premium shall be
based and added to makeup overtime compensation.
No rule of universal application to other cases may be justifiably extracted from
the NAWASA case. CIR relies on the part of the NAWASA decision where the SC
cited American decisions whose legislation on overtime is at variance with the
law in this jurisdiction. The US legislation considers work in excess of forty hours
a week as overtime; whereas, what is generally considered overtime in the
Philippines is work in excess of the regular 8 hours a day. It is understandably
material to refer to precedents in the US for purposes of computing weekly
wages under a 40-hour week rule, since the particular issue involved in NAWASA
is the conversion of prior weekly regular earnings into daily rates without allowing
diminution or addition.

To apply the NAWASA computation would require a different formula for each
and every employee. It would require reference to and continued use of
individual earnings in the past, thus multiplying the administrative difficulties of
the Company. It would be cumbersome and tedious a process to compute
overtime pay and this may again cause delays in payments, which in turn could
lead to serious disputes. To apply this mode of computation would retard and
stifle the growth of unions themselves as Companies would be irresistibly drawn
into denying, new and additional fringe benefits, if not those already existing, for
fear of bloating their overhead expenses through overtime which, by reason of
being unfixed, becomes instead a veritable source of irritant in labor relations.
Decision appealed from is REVERSED.

Ma. Jean B. Castaeda

Page 12