ECOP V NATIONAL WAGES AND PRODUCTIVITY COMMISSION & REGIONAL TRIPARTITE WAGES AND

PRODUCTIVITY BOARD-NCR, TRADE UNION CONGRESS OF THE PHILIPPINES

 The Orders of the Commission (as well as Wage Order No. NCR-01-A) are the subject of this petition, in
which, ECOP assails the board’s grant of an “across-the-board” wage increase to workers already being
paid more than existing minimum wage rates (up tp P125 a day) as an alleged excess of authority, and
alleges that under the RA 6727, the boards may only prescribe “minimum wages,” not determine “salary
ceilings”
 SC: We agree with the Sol Gen. In the National Wages and Productivity Commission’s Order, the
Commission noted that the determination of wages has generally involved in 2 methods – floor wage &
salary wage method.
o Floor wage method involves the fixing of determinate amount that would be added to the
prevailing statutory minimum wage
o Salary-ceiling method whereby the wage adjustment is applied to employees receiving a certain
denominated salary ceiling.
 Precisely, RA No. 6727 was intended to rationalize wages, first, by providing for full-time boards to
police wages round-the-clock, and second, by giving the boards enough powers to achieve this
objective.
 The Court is of the opinion that Congress meant the boards to be creative in resolving the annual
question of wages without labor and management knocking on the legislature’s door at every turn.
 The Court’s opinion is that if RA 6727 intended the boards alone to set floor wages, the Act would have
no need for a board but an accountant to keep track of the latest consumer price index, or better, would
have Congress done it as the need arises, as the legislature, prior to the Act, has done so for years.
 The fact of the matter is that the act sought “thinking” group of men and women bound by statutory
standards.

 The Court is not convinced that the Regional Board of the National Capital Region, in decreeing an
across-the board hike, performed an unlawful act of legislation.
 It is true that wage-fixing, like rate constitutes an act of Congress; it is also true, however, that Congress
may delegate the power to fix rates provided that, as in all delegations cases, Congress leaves sufficient
standards.

 It is the Court’s thinking, reached after the Court’s own study of the Act, that the Act is meant to
rationalize wages, that is, by having permanent boards to decide wages rather than leaving wage
determination to Congress year after year and law after law.
 The Court is not of course saying that the Act is an effort of Congress to pass the buck, or worse, to
abdicate its duty, but simply, to leave the question of wages to the expertise of experts.
FACTS: Hilaro Rada was employed by PhilNor in three separate renewals of “Contract of Employment for a
Definite Period” from 1977 to 1985, the third and last Contract having been extended for four years. He worked
as a driver for a North Luzon Extension construction project, which was repeatedly extended as well due to lack
in budgets (hence the renewals and extensions of his contract). In 1985, the phase of the project for which he
was hired having been finished, his employment was terminated. Now he claims illegal dismissal from Philnor
and claims separation pay as well as overtime pay.

ARGUMENT/S OF THE PETITIONER:

1. He was a regular employee entitled to security of tenure
2. He was not a project employee since Philnor is not engaged in the construction business as to be
covered by Policy Instructions No. 20
3. The contract of employment for a definite period executed between him and Philnor is against public
policy and a clear circumvention of the law designed merely to evade any benefits or liabilities under the
statute
4. His position as driver was essential, necessary and desirable to the conduct of the business of Philnor
5. He rendered overtime work until 6:00 p.m. daily except Sundays and holidays for a period of three
years and therefore, he was entitled to overtime pay

ARGUMENT/S OF THE RESPONDENT:

Rada already signed the "Personnel Clearance" form for P3,796.20 representing conversion to cash of unused
leave credits and financial assistance and also a "Release, Waiver and Quitclaim" which also released Philnor
from all obligations and/or claims. He did not render overtime work and neither did he demand for overtime
pay. He was not a regular employee, as he was merely employed during the duration of the phase of the
construction contract PhilNor was finishing.

RULING OF THE LOWER COURTS:

Labor Arbiter for Rada – reinstatement with overtime pay. His assigned task as driver was necessary and
desirable in the usual trade/business of the respondent employer, and having so worked for 8 years more or
less, he is entitled to tenure.
NLRC for PhilNor- reversed LA’s decision

ISSUES:
1. WON the NLRC erred in accepting the appeal of PhilNor despite its failure to post a supersedeas bond
within ten days of receipt of the LA’s decision -NO
2. WON the NLRC erred in upholding the termination of Rada -NO
3. WON Rada was entitled to overtime pay -YES

RATIO:
1. Despite being late, what was important was PhilNor did pay. The broader interests of justice and the
desired objective of resolving controversies on the merits demands that the appeal be given due course.
Art 221, Labor Code: "In any proceeding before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in Courts of law or equity shall not be controlling and it is the spirit and intention of this
Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively without regard to technicalities of law or procedure, all
in the interest of due process
 2. Quiwa v. PhilNor- upheld workers as project employees
Cartagenas, et al. vs. Romago Electric Company- upheld electrical contractors as project employees
Project employees, as distinguished from regular or non-project employees, are mentioned in section
281 of the Labor Code as those "where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee."
Project employees are those employed in connection with a particular construction project. Project
employees are not entitled to termination pay if they are terminated as a result of the completion of the project
or any phase thereof in which they are employed, regardless of the number of projects in which they have been
employed by a particular construction company. Moreover, the company is not required to obtain clearance
from the Secretary of Labor in connection with such termination.
The fact that Rada does not belong to a "work pool" from which the company would draw workers for
assignment to other projects at its discretion (as opposed to in-company groups of carpenters, laborers and
masons) means that he is merely a project worker.

3. It is usually the project driver who is tasked with picking up or dropping off his fellow employees. If
driving these employees to and from the project site is not really part of petitioner's job, then there
would have been no need to find a replacement driver to fetch these employees. But since the assigned
task of fetching and delivering employees is indispensable and consequently mandatory, then he is
doing overtime work and should be paid for such

RULING: NLRC decision upheld, except PhilNor ordered to pay Rada overtime pay.
NATIONAL DEVELOPMENT COMPANY vs. COURT OF INDUSTRIAL RELATIONS and NATIONAL TEXTILE
WORKERS UNION, respondents.

FACTS: At the National Development Co., a government-owned and controlled corporation, there were four
shifts of work. One shift was from 8 a.m. to 4 p.m., while the three other shifts were from 6 a.m. to 2 p.m;
then from 2 p.m. to 10 p.m. and, finally, from 10 p.m. to 6 a.m. In each shift, there was a one-hour mealtime
period, to wit: From (1) 11 a.m. to 12 noon for those working between 6 a.m. and 2 p.m. and from (2) 7 p.m.
to 8 p.m. for those working between 2 p.m. and 10 p.m.

(Petitioner does not want to pay for the 1 hour lunch time) The records disclose that although there was a
one-hour mealtime, petitioner nevertheless credited the workers with eight hours of work for each shift and
paid them for the same number of hours. However, since 1953, whenever workers in one shift were required
to continue working until the next shift, petitioner instead of crediting them with eight hours of overtime
work, has been paying them for six hours only, petitioner that the two hours corresponding to the mealtime
periods should not be included in computing compensation.

CIR: Mealtime should be counted in the determination of overtime work

ISSUE: WON mealtime breaks should be considered working time

HELD: YES
The legal working day for any person employed by another shall be of not more than eight hours daily.When
the work is not continuous, the time during which the laborer is not working and can leave his working place
and can rest completely shall not be counted. (Sec. 1, Com. Act No. 444)

It will be noted that, under the law, the idle time that an employee may spend for resting and during which he
may leave the spot or place of work though not the premises of his employer, is not counted as working time
only where the work is broken or is not continuous.

In this case, the CIR’s 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 and following our earlier rulings,
shall not disturb the same.

The time cards show that the work was continuous and without interruption. There is also the evidence
adduced by the petitioner that the pertinent employees can freely leave their working place nor rest
completely. There is furthermore the aspect that during the period covered the computation the work was on
a 24-hour basis and previously stated divided into shifts.

From these facts, the CIR correctly concluded that work in petitioner company was continuous and therefore
the mealtime breaks should be counted as working time for purposes of overtime compensation.
1. MINIMUM WAGE LAW; NON-WORKING HOURS, CONSTRUED; PERIOD NOT COUNTED IF
REQUISITES ARE COMPLIED WITH. — 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 requisites are complied with, the period of such rest shall not be counted.

2. ACTION TO RECOVER COMPENSATION FOR PAST OVERTIME WORK; ESTOPPEL AND

LACHES, NOT DEFENSES. — The principles of estoppel and laches cannot be invoked against
employees or laborers in an action for the recovery of compensation for past overtime work. In the first
place, it would be contrary to the spirit of the Eight Hour Labor Law, under which the laborers cannot
waive their right to extra compensation. In the second place, the law principally obligates the employer
to observe it, so much so that it punishes the employer for its violation and leaves the employee free
and blameless. In the third place, the employee or laborer is in such a disadvantageous position as to be
naturally reluctant or even apprehensive in asserting a claim which may cause the employer to devise a
way for exercising his right to terminate the employment. Moreover, an employee or laborer, who can
not expressly renounce the right to extra compensation under the Eight-Hour Labor Law, may be
compelled to accomplish the same thing by mere silence or lapse of time, thereby frustrating the
purpose of the law by indirection. (Manila Terminal Co. v. Court of Industrial Relations Et. Al., 91 Phil.,
625, 48 Off. Gaz. 2725.) However, there may be cases in which the silence of the employee or laborer
who lets the time go by for quite a long period without claiming or asserting his right to overtime
compensation may favor the inference that he may not have worked any such overtime or that his extra
work has been duly compensated, but this is not so in the case at bar.
3. OVERTIME PAY IN ARREARS RETROACTS TO THE DATE WHEN SERVICES WERE
ACTUALLY RENDERED. — The employee, in rendering extra services at the request of his
employer, has a right to assume that the latter has complied with the requirements of the law and
therefore has obtained the required permission from the Department of Labor (Gotamco Lumber
Co. v. Ct. 8 Industrial Relations, 85 Phil., 242, 47 Off. Gaz., 3421). Fear of possible unemployment
sometimes is a very strong factor that gags the workingman from demanding payment for such
extra services and it may take him months or years before he could be made to present a claim
against his employer. To allow the workingman to be compensated only from the date of the filing
of the petition with the court would be to penalize him for his acquiescence of silence which is
beyond the intent of the law. It is not just and humane that he should be deprived of what is
lawfully his under the law, for the true intendment of Commonwealth Act No. 444 is to compensate
the worker for services rendered beyond the statutory period and this should be made to retroact
to the date when such services were actually performed.

4. COURT OF INDUSTRIAL RELATIONS; NATURE AND POWERS OF; POWER TO MODIFY OR

ALTER JUDGMENT SO AS TO CONFORM WITH LAW AND EVIDENCE. — For procedural
purposes, the Court of Industrial Relations is a court with well-defined powers vested by the law
creating it with such other powers as generally pertain to a court of justice (Sec. 20, Com. Act. No.
103). As such, the general rule that before a judgment becomes final, the Court that rendered the
same may alter or modify it so as to conform with the law and the evidence, is applicable to the
Court of Industrial Relations (Connel Bros. Co. (Phil.) v. National Labor Union, G. R. No. L-3631,
prom. January 30, 1956).
FACTS: Luzon Marine Department Union filed a petition with the Court of Industrial Relations against
petitioner Luzon Stevedoring Co., Inc for full recognition of the right of COLLECTIVE bargaining, close
shop and check off. However, on July 18, 1948, while the case was still pending with the CIR, said labor
union declared a strike which was ruled down as illegal by the SC. In view of said ruling, the Union filed a
“Constancia” with the Court of Industrial Relations praying that the remaining unresolved demands of the
Union presented in their original petition, be granted.

One of those claims was that the work performed in excess of eight (8) hours he 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.

TRIAL COURT: Petitioner gave said employees 3 free meals every day and about 20 minutes rest after
each mealtime; that they worked from 6:00 am. to 6:00 p.m. every day including Sundays and holidays, and
for work performed in excess of 8 hours, the officers, patrons and radio operators were given overtime
pay in the amount of P4 each and P2 each for the rest of the crew up to March, 1947, and after said date,
these payments were increased to P5 and P2.50, respectively, until the time of their separation or the
strike of July 19, 1948; that when the tugboats underwent repairs, their personnel worked only 8 hours a
day excluding Sundays and holidays; that although there was an effort on the part of claimants to show
that some had worked beyond 6:00 p.m., the evidence was uncertain and indefinite and that demand was,
therefore, denied; that respondent Company, by the nature of its business and as defined by law is
considered a public service operator by the Public Service Commission, and, therefore, exempt from paying
additional remuneration or compensation for work performed on Sundays and legal holidays.

CIR: Ruled that the 20 minutes’ rest given the claimants after mealtime should not be deducted from the 4
hours of overtime worked performed by said claimants

The company though insists that the rules on the 8 hours work of land based jobs should be different from
their seamen counterparts.

ISSUE: WON the rest periods given to the claimants (after each meal) should be deducted from their
overtime pay.

HELD: NO. The SC finds no reason to set for seamen a criterion different from that applied to laborers on
land.
Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:

SEC. 1. The legal working day for any person employed by another shall be of not more than eight hours
daily. When the work is not continuous, the time during which the laborer is not working AND CAN
LEAVE HIS WORKING PLACE and can rest completely, shall not be counted.
The only thing to be done is to determine the meaning and scope of the term “working place” used therein.
As We understand this term, 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
requisites are complied with, the period of such rest shall not be counted.

In the case at bar We do not need to look into the nature of the work of claimant mariners to ascertain the
truth of petitioners allegation that this kind of seamen have had enough “free time”, a task of which we are
relieved, for although after an ocular inspection of the working premises of the seamen affected in this
case, the TRIAL COURT declared in his decision that the Company gave the complaining laborers 3 free
meals a day with a recess of 20 minutes after each meal, this decision was specifically amended by the CIR,
wherein it held that the claimants herein rendered services to the Company from 6:00 a.m. to 6:00 p.m.
including 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 of their working place, or that they could not rest
completely. And such resolution being on a question essentially of fact, this Court is now precluded to
review the same.