14 MANILA TERMINAL COMPANY, INC., vs.
THE COURT OF INDUSTRIAL and the Secretary of Finance The Manila Terminal Relief and Mutual Aid
RELATIONS and MANILA TERMINAL RELIEF AND MUTUAL AID ASSOCIATION,
No. L-4148. July 16, 1952
DOCTRINES:
Where the contract of employment requires work for more than eight hours at
specified wages per day, without providing for a fixed hourly rate or that the
daily wages include overtime pay, said wages cannot be considered as including
overtime compensation required under the Eight-Hour Labor Law.
The right of employees and laborers to overtime compensation cannot be
waived expressly or impliedly.
As sections 3 and 5 of Commonwealth Act No. 444, the Eight-Hour Labor Law,
expressly provides for the payment of extra compensation in cases where
overtime services are required, the employees or laborers are entitled to collect
such extra compensation for past overtime work. To hold otherwise would allow
an employer to violate the law by simply failing to provide for and pay overtime
compensation.
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
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?
RULING: 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.
Petitioners 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 cant 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 cant 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 cant
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.