43. SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCATION-AFW/MA.

CONSUELO vs NLRC and

SAN JUAN DE DIOS HOSPITAL GR NO. 126383 (NOV 28, 1997)

FACTS:

Then Labor Secretary Franklin M. Drilon issued Policy Instruction No. 4 in line with R.A. 5901 which “requires that
the covered hospital workers who used to work 7 days a week should be paid for such number of days for working
only 5 days or 40 hours a week”.

Petitioners filed a complaint for the expeditious implementation and payment by respondent” Juan De Dios Hospital
“. The Labor Arbiter and NLRC both dismissed their complaints and MR was also denied. Hence, this petition.

In said Policy Instruction, it was provided that: “The Labor Code in its Article 83 adopts and incorporates the basic
provisions of RA 5901 and retains its spirit and intent which is to shorten the workweek of covered hospital
personnel and at the same time assure them of a full weekly wage.”

ISSUE:
WON the intent of Art. 83, LCP, is that persons in subject hospitals and clinics who have completed the 40-hour/5-
day workweek in any given workweek are entitled to a full weekly wage for seven days.

HELD:
No.
What Article 83 merely provides are: (1) the regular office hour of eight hours a day, five days per week for health
personnel, and (2) where the exigencies of service require that health personnel work for six days or forty-eight
hours then such health personnel shall be entitled to an additional compensation of at least thirty percent of their
regular wage for work on the sixth day.

There is nothing in the law that supports then Secretary of Labor’s assertion that “personnel in subject hospitals and
clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-day workweek in
any given workweek”.

Also, if petitioners are entitled to two days off with pay, then there appears to be no sense at all why Section 15 of
the implementing rules grants additional compensation equivalent to the regular rate plus at least twenty-five percent
thereof for work performed on Sunday to health personnel, or an “additional straight-time pay which must be
equivalent at least to the regular rate” ” for work performed in excess of forty hours a week.

44. LEGEND HOTEL MANILA owned by TITANIUM CORPORATION and/or, NELSON NAPUD, in his
capacity as the President of Petitioner Corporation vs HERNANI S. REALUYO a.k.a JOEY ROA GR NO.
153511 (JULY 28, 2012)

Facts: Respondent averred that he had worked as a pianist at the Legend Hotel’s Tanglaw Restaurant from
September 1992 with an initial rate of P400.00/night that was given to him after each night’s performance; that his
rate had increased to P750.00/night; and that during his employment, he could not choose the time of performance,
which had been fixed from 7:00 pm to 10:00 pm for three to six times/week. He added that the Legend Hotel’s
restaurant manager had required him to conform with the venue’s motif; that he had been subjected to the rules on
employees’ representation checks and chits, a privilege granted to other employees; that on July 9, 1999, the
management had notified him that as a cost-cutting measure his services as a pianist would no longer be required
effective July 30, 1999; that he disputed the excuse, insisting that Legend Hotel had been lucratively operating as of
the filing of his complaint; and that the loss of his employment made him bring his complaint.

Issues:
1. Whether or not there is ER-EE relationship.
2. Whether or not retrenchment as a ground for respondent’s dismissal is valid.
Held: YES. Petitioner actually wielded the power of selection at the time it entered into the service contract dated
September 1, 1992 with respondent. This is true, notwithstanding petitioner’s insistence that respondent had only
offered his services to provide live music at petitioner’s Tanglaw Restaurant, and despite petitioner’s position that
what had really transpired was a negotiation of his rate and time of availability. The power of selection was firmly
evidenced by, among others, the express written recommendation dated January 12, 1998 by Christine Velazco,
petitioner’s restaurant manager, for the increase of his remuneration.

Respondent’s remuneration, albeit denominated as talent fees, was still considered as included in the term wage in
the sense and context of the Labor Code, regardless of how petitioner chose to designate the remuneration. Anent
this, Article 97(f) of the Labor Code clearly states:

xxx wage paid to any employee shall mean the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services rendered or to be rendered, and includes the
fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee.

That respondent worked for less than eight hours/day was of no consequence and did not detract from the CA’s
finding on the existence of the employer-employee relationship. In providing that the “normal hours of work of any
employee shall not exceed eight (8) hours a day,” Article 83 of the Labor Code only set a maximum of number of
hours as “normal hours of work” but did not prohibit work of less than eight hours.

A review of the records shows, however, that respondent performed his work as a pianist under petitioner’s
supervision and control. Specifically, petitioner’s control of both the end achieved and the manner and means used
to achieve that end was demonstrated by the following, to wit: a. He could not choose the time of his performance,
which petitioners had fixed from 7:00 pm to 10:00 pm, three to six times a week; b. He could not choose the place of
his performance; c. The restaurant’s manager required him at certain times to perform only Tagalog songs or music,
or to wear barong Tagalog to conform to the Filipiniana motif; and d. He was subjected to the rules on employees’
representation check and chits, a privilege granted to other employees. Relevantly, it is worth remembering that the
employer need not actually supervise the performance of duties by the employee, for it sufficed that the employer
has the right to wield that power.

45. BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG as UNION PRESIDENT,

JOSELITO LARINO, VIVENCIO B. BARTE, SATURNINO EGERA and SIMPLICIO AYA-AY vs NLRC,
TRYCO PHARMA CORPORATION and/or WILFREDO C. REVARA GR NO. 151309 (OCT 15, 2008)

Facts:

Petitioners are employees of Tryco Pharmaceuticals Corporation, maker of veterinary medicines and products. Tryco
and the petitioners signed a Memorandum of Agreement (MOA), providing for a compressed workweek schedule to
be implemented in the company effective May 20, 1996. The MOA was entered into pursuant to Department of
Labor and Employment Department Order (D.O.) No. 21, Series of 1990, Guidelines on the Implementation of
Compressed Workweek. As provided in the MOA, 8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be
considered as the regular working hours, and no overtime pay shall be due and payable to the employee for work
rendered during those hours. The MOA specifically stated that the employee waives the right to claim overtime pay
for work rendered after 5:00 p.m. until 6:12 p.m. from Monday to Friday considering that the compressed workweek
schedule is adopted in lieu of the regular workweek schedule which also consists of 46 hours. However, should an
employee be permitted or required to work beyond 6:12 p.m., such employee shall be entitled to overtime pay. Tryco
informed the Bureau of Working Conditions of the Department of Labor and Employment of the implementation of
a compressed workweek in the company. In January 1997, BMT and Tryco negotiated for the renewal of their
collective bargaining agreement (CBA) but failed to arrive at a new agreement. Meantime, Tryco received the Letter
dated March 26, 1997 from the Bureau of Animal Industry of the Department of Agriculture reminding it that its
production should be conducted in San Rafael, Bulacan, not in Caloocan City since its operating permit was licensed
there. Accordingly, Tryco issued a Memorandum dated April 7, 1997 which directed petitioners to report to the
company's plant site in Bulacan. BMT opposed the transfer of its members to San Rafael, Bulacan, contending that it
constitutes unfair labor practice. In protest, BMT declared a strike on May 26, 1997. Petitioners then filed their
complaints to the labor arbiter alleging that Tryco negotiated in bad faith and unfair labor practice of Tryco by
transferring the members of the union in order to paralyze it and that therefore it amounted to constructive dismissal.

Issue:

Was there constructive dismissal due to the transfer of the petitioners from Caloocan City to San Rafael Bulacan?

Ruling:

The petition has no merit. Findings of fact of labor officials, who are deemed to have acquired expertise in matters
within their respective jurisdiction, are generally accorded not only respect but even finality, and bind us when
supported by substantial evidence.This is particularly true when the findings of the Labor Arbiter, the NLRC and the
CA are in absolute agreement. In this case, the Labor Arbiter, the NLRC, and the CA uniformly agreed that the
petitioners were not constructively dismissed.

Tryco's decision to transfer its production activities to San Rafael, Bulacan, regardless of whether it was made
pursuant to the letter of the Bureau of Animal Industry, was within the scope of its inherent right to control and
manage its enterprise effectively. While the law is solicitous of the welfare of employees, it must also protect the
right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct
its own business affairs to achieve its purpose cannot be denied.

This prerogative extends to the management's right to regulate, according to its own discretion and judgment, all
aspects of employment, including the freedom to transfer and reassign employees according to the requirements of
its business.Management's prerogative of transferring and reassigning employees from one area of operation to
another in order to meet the requirements of the business is, therefore, generally not constitutive of constructive
dismissal. Thus, the consequent transfer of Tryco's personnel, assigned to the Production Department was well
within the scope of its management prerogative.

When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a
demotion in rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it
amounts to a constructive dismissal. However, the employer has the burden of proving that the transfer of an
employee is for valid and legitimate grounds. The employer must show that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits.

Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution of salaries,
benefits and other privileges of the petitioners. Petitioners, therefore, anchor their objection solely on the ground that
it would cause them great inconvenience since they are all residents of Metro Manila and they would incur
additional expenses to travel daily from Manila to Bulacan.

The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a claim of
constructive dismissal. Objection to a transfer that is grounded solely upon the personal inconvenience or hardship
that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer.

Hence petition was denied for lack of merit.

46. LINTON COMMERCIAL CO INC and DESIREE ONG vs ALEX A. HELLERA et al GR NO. 163147
(OCT 10, 2007)

Facts:

On 17 December 1997, Linton issued a memorandum addressed to its employees informing them of the company's
decision to suspend its operations from 18 December 1997 to 5 January 1998 due to the currency crisis that affected
its business operations. Linton submitted an establishment termination report to the Department of Labor and
Employment (DOLE) regarding the temporary closure of the establishment covering the said period. The company's
operation was to resume on 6 January 1998. On 7 January 1997, Linton issued another memorandum informing
them that effective 12 January 1998, it would implement a new compressed workweek of three (3) days on a
rotation basis. In other words, each worker would be working on a rotation basis for three working days only instead
for six days a week. On the same day, Linton submitted an establishment termination report concerning the rotation
of its workers. Linton proceeded with the implementation of the new policy without waiting for its approval by
DOLE. Aggrieved, sixty-eight (68) workers (workers) filed a Complaint for illegal reduction of workdays.

Issue:

Whether or not there was an illegal reduction of work when Linton implemented a compressed workweek by
reducing from six to three the number of working days with the employees working on a rotation basis.

Ruling:

The compressed workweek arrangement was unjustified and illegal.

The Bureau of Working Conditions of the DOLE, moreover, released a bulletin providing for in determining when
an employer can validly reduce the regular number of working days. The said bulletin states that a reduction of the
number of regular working days is valid where the arrangement is resorted to by the employer to prevent serious
losses due to causes beyond his control, such as when there is a substantial slump in the demand for his goods or
services or when there is lack of raw materials. Although the bulletin stands more as a set of directory guidelines
than a binding set of implementing rules, it has one main consideration, consistent with the ruling in Philippine
Graphic Arts Inc., in determining the validity of reduction of working hours — that the company was suffering from
losses.

Certainly, management has the prerogative to come up with measures to ensure profitability or loss minimization.
However, such privilege is not absolute. Management prerogative must be exercised in good faith and with due
regard to the rights of labor. As previously stated, financial losses must be shown before a company can validly opt
to reduce the work hours of its employees. However, to date, no definite guidelines have yet been set to determine
whether the alleged losses are sufficient to justify the reduction of work hours. If the standards set in determining the
justifiability of financial losses under Article 283 (i.e., retrenchment) or Article 286 (i.e., suspension of work) of the
Labor Code were to be considered, petitioners would end up failing to meet the standards. On the one hand, Article
286 applies only when there is a bona fide suspension of the employer's operation of a business or undertaking for a
period not exceeding six (6) months. Records show that Linton continued its business operations during the
effectivity of the compressed workweek, which spanned more than the maximum period. On the other hand, for
retrenchment to be justified, any claim of actual or potential business losses must satisfy the following standards: (1)
the losses incurred are substantial and not de minimis; (2) the losses are actual or reasonably imminent; (3) the
retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (4) the
alleged losses, if already incurred, or the expected imminent losses sought to be forestalled, are proven by sufficient
and convincing evidence. Linton failed to comply with these standards.

47. DURABUILT RECAPPING PLANT AND COMPANY and EDUARDO LAO, GENERAL MANAGER
vs NLRC GR NO 76746 (JULY 27, 1987) 48. UNIVERSITY OF PANGASINAN FACULTY UNION vs
UNIVERSITY OF PANGASINAN GR NO. L-63122 (FEB 20, 1984)

FACTS:

-In July 1983, Reynaldo Bodegas filed a complaint for illegal dismissal against Durabuilt, a tire capping company.

-Labor Arbiter rendered a decision reinstating Bodegas to his former position with full backwages (including
benefits) from the time of his termination up to the time he was actually reinstated.

- A computation of backwages, ECOLA, 13th month pay, sick and vacation leave benefits in favor or Bodegas was
then submitted which amounted to Php 24, 316.38.

- Durabuilt filed an opposition to the computation.

Durabuilt’s contention: Bodegas should only be entitled to a total of P3,834.05 and not 24, 316.38. The submitted
computation contemplated a straight computation of twenty six (26) working days in one month when the period
covered by the computation was intermittently interrupted due to frequent brownouts and machine trouble. Hence,
the days during which they were not in operation due to the brownouts should be excluded in the number of days
worked for the purpose of computing Bodegas’ backwages.

ISSUE: WON Bodegas is entitled to backwages. YES, (for 3,834.05 and not 24, 316.38)

Ruling:

The illegal dismissal of Bodegas is conceded by the Durabuilt and is willing to pay backwages. However, it argues
that for days where no work was required and could be done by its employees, no wages could have been earned
and, thereafter, lost by said employees to justify an award of backwages.

Here, it appears that Durabuilt’s business was not in actual operation due to brownouts or power interruption and the
retrenchment of workers they had during the period of private respondent's dismissal, thus it is justified to exclude
certain days for purposes of computing backwages.

It cannot be denied that during the past years particularly in 1983, there was chronic electrical power interruption
resulting to disruption of business operations. To alleviate the situation, the government thru the Ministry of Trade
and Industry called on the industrial sector to resort to the so-called Voluntary Loan Curtailment Plan (or VLCP),
whereby brownouts or electrical power interruption was scheduled by area. The program while it may have been
called “voluntary" was not so as electrical power consumers had no choice then due to the prevailing energy crisis.

As early as 1978, Ministry of Labor thru Policy Instruction No. 36 provides that:

2. Brownouts running for more than twenty minutes may not be treated as hours worked provided that any of the
following conditions are present;

a) The employees can leave their work place or go elsewhere whether within or without the work premises; or
b) The employees can use the time effectively for their own interest.

It is of record that during the electrical power interruptions, Durabuilt’s business was not in operation. Hence, it
would neither be fair nor just to allow Bodegas to recover something he has not earned and could not have earned
and to further penalize Durabuilt over and above the losses it had suffered due to lack of raw materials and the
energy-saving programs of the government. Bodegas cannot be allowed to enrich himself at the expense of
Durabuilt. The computation of backwages should be based on daily rather than on monthly pay schedules where, as
in the case at bar, such basis is more realistic and accurate.

48. UNIVERSITY OF PANGASINAN FACULTY UNION vs UNIVERSITY OF PANGASINAN GR NO. L-

63122 (FEB 20, 1984)

FACTS:
University of Pangasinan did not entitle its faculty to ECOLA during the semestral break and when it increased its
tuition fee, it refused its faculty the salary increase 60% of the incremental proceeds of increased tuition fees.

ISSUES:
WON faculty members of a university are entitled to ECOLA during semestral breaks.

HELD:
Yes.
Per various PDs on ECOLA, ECOLA pay includes LOA without pay.The contention that “the fact of receiving a
salary should not be the basis of receiving ECOLA” is without merit as per IRR of Wage Order No. 1: “Allowance
for Unworked days: a) All covered employees whether paid on a monthly or daily basis shall be entitled to their
daily living allowance when they are paid their basic wage.”
The intention of the law is to grant ECOLA upon the payment of basic wages. Hence the principle, “No pay, no
ECOLA”.

Also applied by analogy is the principle enunciated in the ORI-LCP: “Sec. 4. Principles in Determining Hours
Worked… d) The time during which an employee is inactive by reason of interruptions in his work beyond his
control shall be considered time either if the imminence of the resumption of work requires the employee’s presence
at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee’s own
interest.”

49. SAINT MARY’S UNIVERSITY represented by its PRESIDENT, REV. JESSIE M. HECHANOVA,
CICM vs CA, NLRC and MARCELO A. DONELO GR NO. 157788 (MARCH 8, 2005)

FACTS

Respondent Donelo started teaching on a contractual basis at St. Mary’s University in 1992. In 1995, he was issued
an appointment as an Assistant Professor I. Later on, he was promoted to Assistant Professor III. He taught until
the first semester of school year 1999-2000 when the school discontinued giving him teaching assignments. For
this, respondent filed a complaint for illegal dismissal against the university.

In its defense, petitioner St. Mary’s University showed that respondent was merely a part-time instructor and, except
for three semesters, carried a load of less than eighteen units. Petitioner argued that respondent never attained
permanent or regular status for he was not a full-time teacher. Further, petitioner showed that respondent was under
investigation by the university for giving grades to students who did not attend classes. Petitioner alleged that
respondent did not respond to inquiries relative to the investigation. Instead, respondent filed the instant case
against the university.
ISSUE
Whether or not respondent Donelo is a full time teacher and thus qualified to become a permanent teacher of
petitioner.

HELD

The SC held that section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time teachers
who have satisfactorily completed their probationary period shall be considered regular or permanent.[6]
Furthermore, the probationary period shall not be more than six consecutive regular semesters of satisfactory service
for those in the tertiary level. Thus, the following requisites must concur before a private school teacher acquires
permanent status: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of
service; and (3) such service must have been satisfactory.

In the present case, petitioner claims that private respondent lacked the requisite years of service with the university
and also the appropriate quality of his service, i.e., it is less than satisfactory. The basic question, however, is
whether respondent is a full-time teacher.

Section 45 of the same manual provides that full-time academic personnel are those meeting all the following
requirements:
a. Who possess at least the minimum academic qualifications prescribed by the Department under this Manual for
all academic personnel;
b. Who are paid monthly or hourly, based on the regular teaching loads as provided for in the policies, rules and
standards of the Department and the school;
c. Whose total working day of not more than eight hours a day is devoted to the school;
d. Who have no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the
working hours in the school; and
e. Who are not teaching full-time in any other educational institution.

All teaching personnel who do not meet the foregoing qualifications are considered part-time.

A perusal of the various orders of the then Department of Education, Culture and Sports prescribing teaching loads
shows that the regular full-time load of a faculty member is in the range of 15 units to 24 units a semester or term,
depending on the courses taught. Part-time instructors carry a load of not more than 12 units.

The evidence on record reveals that, except for four non-consecutive terms, respondent generally carried a load of
twelve units or less from 1992 to 1999. There is also no evidence that he performed other functions for the school
when not teaching. These give the impression that he was merely a part-time teacher. Although this is not
conclusive since there are full-time teachers who are allowed by the university to take fewer load, in this case,
respondent did not show that he belonged to the latter group, even after the university presented his teaching record.
With a teaching load of twelve units or less, he could not claim he worked for the number of hours daily as
prescribed by Section 45 of the Manual. Furthermore, the records also indubitably show he was employed
elsewhere from 1993 to 1996.

Since there is no showing that respondent worked on a full-time basis for at least three years, he could not have
acquired a permanent status. A part-time employee does not attain permanent status no matter how long he has
served the school. And as a part-timer, his services could be terminated by the school without being held liable for
illegal dismissal. Moreover, the requirement of twin-notice applicable only to regular or permanent employees could
not be invoked by respondent.

Yet, this is not to say that part-time teachers may not have security of tenure. The school could not lawfully
terminate a part-timer before the end of the agreed period without just cause. But once the period, semester, or term
ends, there is no obligation on the part of the school to renew the contract of employment for the next period,
semester, or term.