INTERPHIL LABORATORIES EMPLOYEES UNION v INTERPHIL LABORATORIES INC

FACTS: Prior to the expiration of the CBA or sometime in February 1993, Allesandro G. Salazar,1 Vice-President-Human Resources
Department of respondent company, was approached by Nestor Ocampo, the union president, and Hernando Clemente, a union
director. The two union officers inquired about the stand of the company regarding the duration of the CBA which was set to expire in
a few months. Salazar told the union officers that the matter could be best discussed during the formal negotiations which would start
soon.

In March 1993, Ocampo and Clemente again approached Salazar. They inquired once more about the CBA status and received the
same reply from Salazar. In April 1993, Ocampo requested for a meeting to discuss the duration and effectivity of the CBA. Salazar
acceded and a meeting was held on 15 April 1993 where the union officers asked whether Salazar would be amenable to make the
new CBA effective for two (2) years, starting 01 August 1993. Salazar, however, declared that it would still be premature to discuss
the matter and that the company could not make a decision at the moment. The very next day, or on 16 April 1993, all the rank-and-
file employees of the company refused to follow their regular two-shift work schedule of from 6:00 a.m. to 6:00 p.m., and from 6:00
p.m. to 6:00 a.m. At 2:00 p.m. and 2:00 a.m., respectively, the employees stopped working and left their workplace without sealing the
containers and securing the raw materials they were working on. When Salazar inquired about the reason for their refusal to follow
their normal work schedule, the employees told him to "ask the union officers." To minimize the damage the overtime boycott was
causing the company, Salazar immediately asked for a meeting with the union officers. In the meeting, Enrico Gonzales, a union
director, told Salazar that the employees would only return to their normal work schedule if the company would agree to their
demands as to the effectivity and duration of the new CBA. Salazar again told the union officers that the matter could be better
discussed during the formal renegotiations of the CBA. Since the union was apparently unsatisfied with the answer of the company,
the overtime boycott continued. In addition, the employees started to engage in a work slowdown campaign during the time they were
working, thus substantially delaying the production of the company.

On 24 January 1994, petitioner union filed with the NCMB a Notice of Strike citing unfair labor practice allegedly committed by
respondent company. On 12 February 1994, the union staged a strike.
On 14 February 1994, Secretary of Labor Nieves Confesor issued an assumption order4 over the labor dispute. On 02 March 1994,
Secretary Confesor issued an order directing respondent company to "immediately accept all striking workers, including the fifty-three
(53) terminated union officers, shop stewards and union members back to work under the same terms and conditions prevailing prior
to the strike, and to pay all the unpaid accrued year end benefits of its employees in 1993."5 On the other hand, petitioner union was
directed to "strictly and immediately comply with the return-to-work orders issued by (the) Office x x x6 The same order pronounced
that "(a)ll pending cases which are direct offshoots of the instant labor dispute are hereby subsumed herewith."

In the i, the case before Labor Arbiter Caday continued. On 16 March 1994, petitioner union filed an "Urgent Manifestation and
Motion to Consolidate the Instant Case and to Suspend Proceedings" seeking the consolidation of the case with the labor dispute
pending before the Secretary of Labor. Despite objection by respondent company, Labor Arbiter Caday held in abeyance the
proceedings before him. However, on 06 June 1994, Acting Labor Secretary Jose S. Brillantes, after finding that the issues raised
would require a formal hearing and the presentation of evidentiary matters, directed Labor Arbiters Caday and M. Sol del Rosario to
proceed with the hearing of the cases before them and to thereafter submit their report and recommendation to his office.
ISSUE: (1) Whether or not THE SECRETARY OF LABOR AND EMPLOYMENT HAS JURISDICTION OVER A CASE (A
PETITION TO DECLARE STRIKE ILLEGAL) WHICH HAD LONG BEEN FILED AND PENDING BEFORE THE LABOR
ARBITER.

HELD: Yes

RATIO: However, it cannot be denied that the issues of "overtime boycott" and "work slowdown" amounting to illegal strike before
Labor Arbiter Caday are intertwined with the labor dispute before the Labor Secretary.

Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies
arising therefrom, including cases over which the labor arbiter has exclusive jurisdiction.

Otherwise, the Secretary would not be able to effectively and efficiently dispose of the primary dispute.

ISSUE: (2) Whether or not the company may change the working hours

HELD: Yes

RATIO: Hence, the Labor Arbiter is not precluded from accepting and evaluating evidence other than, and even contrary to, what is
stated in the CBA.
In any event, the parties stipulated:
 Section 1. Regular Working Hours — A normal workday shall consist of not more than eight (8) hours. The regular working
hours for the Company shall be from 7:30 A.M. to 4:30 P.M. The schedule of shift work shall be maintained; however the
company may change the prevailing work time at its discretion, should such change be necessary in the operations of the
Company. All employees shall observe such rules as have been laid down by the company for the purpose of effecting
control over working hours.

It is evident from the foregoing provision that the working hours may be changed, at the discretion of the company, should such
change be necessary for its operations, and that the employees shall observe such rules as have been laid down by the company.

The employees are deemed to have waived the eight-hour schedule since they followed, without any question or complaint, the two-
shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule effectively changed the working hours
stipulated in the CBA. As the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime
boycott is justified because they were not obliged to work beyond eight hours.

ISSUE: (3) whether or not the respondents have engaged in "overtime boycott" and "work slowdown" from April 16, 1993 up to
March 7, 1994, both amounting to illegal strike

HELD: Yes

RATIO: It is thus undisputed that members of the union by their own volition decided not to render overtime services in April
1993.20 Petitioner union even admitted this in its Memorandum, dated 12 April 1999, filed with the Court of Appeals, as well as in
the petition before this Court, which both stated that "(s)ometime in April 1993, members of herein petitioner, on their own volition
and in keeping with the regular working hours in the Company x x x decided not to render overtime".21 Such admission confirmed the
allegation of respondent company that petitioner engaged in "overtime boycott" and "work slowdown" which, to use the words of
Labor Arbiter Caday, was taken as a means to coerce respondent company to yield to its unreasonable demands.

More importantly, the "overtime boycott" or "work slowdown" by the employees constituted a violation of their CBA, which prohibits
the union or employee, during the existence of the CBA, to stage a strike or engage in slowdown or interruption of work.

The Court also agrees that such a slowdown is generally condemned as inherently illicit and unjustifiable, because while the
employees "continue to work and remain at their positions and accept the wages paid to them," they at the same time "select what part
of their allotted tasks they care to perform of their own volition or refuse openly or secretly, to the employer's damage, to do other
work;" in other words, they "work on their own terms.
 NDC v CIR

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

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.

ISSUE: Whether or not, on the basis of the evidence, the mealtime breaks should be considered working time

HELD: Yes

RATIO: 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.

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 premises2 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. Thus, the CIR found:

While it may be correct to say that it is well-high impossible for an employee to work while he is eating, yet under Section 1
of Com. Act No. 444 such a time for eating can be segregated or deducted from his work, if the same is continuous and the
employee can leave his working place rest completely. 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.

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.
 PRANGAN v NLRC

FACTS: Private respondent, a corporation engaged in providing security services to its client, hired petitioner on November 4, 1980
as one of its security guards. Thereafter, he was assigned to the Cat House Bar and Restaurant with a monthly salary of P2,000.00
until its closure on August 31, 1993.

On May 4, 1994, petitioner filed a complaint 1 against private respondent for underpayment of wages, non-payment of salary from
August 16-31, 1993, overtime pay, premium pay for holiday, rest day, night shift differential, uniform allowance, service incentive
leave pay and 13th month pay from the year 1990 to 1993.

Private respondent, in its position paper, 2 rejected petitioner's claim alleging it merely acted as an agent of the latter in securing his
employment at the Cat House Bar and Restaurant. Thus, the liability for the claims of the petitioner should be charged to Cat House
Bar and its owner, being his direct employer.

ISSUE: Whether or not the contention of Parangan that he worked for 12 hours (not 4 four hours) is correct

HELD: Yes

RATIO: In the instant case, there is no dispute that matters concerning an employee's actual hours of work are within the ambit of
management prerogative. However, when an employer alleges that his employee work less than the normal hours of employment as
provided for in the law, 11 he bears the burden of proving his allegation with clear and satisfactory evidence.

In the instant petition, the NLRC, in declaring that petitioner only worked for four hours, relied solely on the supposed daily time
records of the petitioner submitted by the private respondent. 12 We, however, are of the opinion that these documents cannot be
considered substantial evidence as to conclude that petitioner only worked for four hours. It is worth mentioning that petitioner, in his
Sur-Rejoinder to Respondents' Rejoinder, 13 unequivocally stated that:

Complainant (petitioner herein) never made nor submitted any daily time record with respondent company considering the fact that he
was assigned to a single post and that the daily time records he allegedly submitted with respondent company are all falsified and his
signature appearing therein forged.

As petitioner's employer, private respondent has unlimited access to all relevant documents and records on the hours of work of the
petitioner. Yet, even as it insists that petitioner only worked for four hours and not twelve, no employment contract, payroll, notice of
assignment or posting, cash voucher or any other convincing evidence which may attest to the actual hours of work of the petitioner
was even presented. Instead, what the private respondent offered as evidence was only petitioner's daily time record, which the latter
categorically denied ever accomplishing, much less signing.

In said alleged daily time record, it showed that petitioner started work at 10:00 p.m. and would invariably leave his post at exactly
2:00 a.m. Obviously, such unvarying recording of a daily time record is improbable and contrary to human experience. It is impossible
for an employee to arrive at the workplace and leave at exactly the same time, day in day out. The very uniformity and regularity of
the entries are "badges of untruthfulness and as such indices of dubiety.

Further, the attendance sheets of Cat House Bar and Restaurant 16 showed that petitioner worked from 7:00 p.m. to 7:00 a.m. daily,
documents which were never repudiated by the private respondent.

As is well-settled, if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be
tilted in favor of the employee. Since it is a time-honored rule that in controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation of agreements and writings should he resolved in the former's favor.
 PAN AMERICAN WORLD AIRWAYS SYSTEM v PAN AMERICAN EMPLOYEES ASSOCIATION

FACTS: Petitioner herein claims that the one-hour meal period should not be considered as overtime work (after deducting 15
minutes), because the evidence showed that complainants could rest completely, and were not in any manner under the control of the
company during that period. The court below found, on the contrary, that during the so called meal period, the mechanics were
required to stand by for emergency work; that if they happened not to be available when called, they were reprimanded by the
leadman; 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. Far from being unsupported by substantial evidence, the record clearly
confirms the above factual findings of the Industrial Court.

ISSUE: Whether or not the one-hour meal period should be considered as overtime

HELD: Yes

RATIO: The court below found, on the contrary, that during the so called meal period, the mechanics were required to stand by for
emergency work; that if they happened not to be available when called, they were reprimanded by the leadman; 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. Far from being unsupported by substantial evidence, the record clearly confirms the above factual
findings of the Industrial Court.
 MERCURY DRUG CO., INC v NARDO DAYAO

FACTS: Employees Association praying, with respect to respondent corporation and its president and general manager: 1) payment of
their unpaid back wages for work done on Sundays and legal holidays plus 25c/c additional compensation from date of their
employment up to June 30, 1962; 2) payment of extra compensation on work done at night; 3) reinstatement 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.

ISSUE: Whether or not private respondent is entitled to claims for 25% additional compensation performing work during Sunday and
legal holidays

HELD: Yes

RATIO: Sec. 4 CA No. 444, No person, firm or corporation, business establishment or place of center of labor shall compel an
employee or laborer to work during Sundays and legal holidays unless he is paid an additional sum of at least twenty-five per centum
of his regular remuneration: PROVIDED, HOWEVER, That this prohibition shall not apply to public utilities performing some public
service such as supplying gas, electricity, power, water, or providing means of transportation or communication.

In this case, the petitioner does not fall on exemptions.

ISSUE: Whether or not the 25% compensation had already been included in the private respondents monthly salaries

HELD: No

RATIO: The petitioner- company's contention that the respondent court's conclusion on the issue of the 25% additional compensation
for work done on Sundays and legal holidays during the first four hours that the private respondents had to work under their respective
contracts of employment was not supported by substantial evidence is, therefore, unfounded.

ISSUE: Whether or not the contracts of employment (waiver of extra compensation for work on Sundays and holidays) were null and
void

HELD: Yes

RATIO: Mercury Drug Co., Inc., maintains a chain of drugstores that are open every day of the week and, for some stores, up to very
late at night because of the nature of the pharmaceutical retail business. The respondents knew that they had to work Sundays and
holidays and at night, not as exceptions to the rule but as part of the regular course of employment. Presented with contracts setting
their compensation on an annual basis with an express waiver of extra compensation for work on Sundays and holidays, the workers
did not have much choice. The private respondents were at a disadvantage insofar as the contractual relationship was concerned.
Workers in our country do not have the luxury or freedom of declining job openings or filing resignations even when some terms and
conditions of employment are not only onerous and iniquitous but illegal.
 ACEDERA v ICTSI

FACTS: When ICTSI started its operations in 1988, it determined the rate of pay of its employees by using 304 days, the number of
days of work of the employees in a year, as divisor.

On September 28, 1990, ICTSI entered into its first Collective Bargaining Agreement (CBA) with APCWU with a term of five years
effective until September 28, 1995. 3 The CBA was renegotiated and thereafter renewed through a second CBA that took effect on
September 29, 1995, effective for another five years. 4 Both CBAs contained an identically-worded provision on hours and days of
work reading:

Article IX

Regular Hours of Work and Days of Labor

Section 1. The regular working days in a week shall be five (5) days on any day from Monday to Sunday, as may be scheduled by the
COMPANY, upon seven (7) days prior notice unless any of this day is declared a special holiday. 5 (Emphasis omitted)

In accordance with the above-quoted provision of the CBA, the employees’ work week was reduced to five days or a total of 250 days
a year. ICTSI, however, continued using the 304-day divisor in computing the wages of the employees. 6

On November 10, 1990, the Regional Tripartite Wage and Productivity Board (RTWPB) in the National Capital Region decreed a
P17.00 daily wage increase for all workers and employees receiving P125.00 per day or lower in the National Capital Region. 7 The
then president of APCWU, together with some union members, thus requested the ICTSI’s Human Resource Department/Personnel
Manager to compute the actual monthly increase in the employees’ wages by multiplying the RTWPB mandated increase by 365 days
and dividing the product by 12 months. 8

Heeding the proposal and following the implementation of the new wage order, ICTSI stopped using 304 days as divisor and started
using 365 days in determining the daily wage of its employees and other consequential compensation, even if the employees’ work
week consisted of only five days as agreed upon in the CBA.

In early 1997, ICTSI went on a retrenchment program and laid off its on-call employees. 10 This prompted the APCWU-ICTSI to file
a notice of strike which included as cause of action not only the retrenchment of the employees but also ICTSI’s use of 365 days as
divisor in the computation of wages.

On December 8, 1997, petitioners-appellants filed with the Labor Arbiter a Complaint-in-Intervention with Motion to Intervene.

ISSUE: Whether or not the petitioners-appellants may intervene

HELD: No

RATIO: A labor union is one such party authorized to represent its members under Article 242(a) of the Labor Code which provides
that a union may act as the representative of its members for the purpose of collective bargaining. This authority includes the power to
represent its members for the purpose of enforcing the provisions of the CBA. That APCWU acted in a representative capacity "for
and in behalf of its Union members and other employees similarly situated," the title of the case filed by it at the Labor Arbiter’s
Office so expressly states.

While a party acting in a representative capacity, such as a union, may be permitted to intervene in a case, ordinarily, a person whose
interests are already represented will not be permitted to do the same 28 except when there is a suggestion of fraud or collusion or that
the representative will not act in good faith for the protection of all interests represented by him.
 PAMPANGA SUGAR v CIR

FACTS: Sometime in February, 1956, the workers' affiliates of respondent Union staged a strike against petitioner company. This
labor dispute was certified by the President to the Court of Industrial Relations which was docketed as Case No. 13-IPA. After six
years, the said Court issued an order on November 8, 1962 directing petitioner company to reinstate the members of respondent union.
On March 12, 1963 some 88 union members were thus reinstated by petitioner. However, petitioner discriminated against the
reemployed workers with respect to wage rates, off-season pay, cost of living allowance, milling bonus and Christmas bonus by
depriving them of aforesaid benefits or by granting to some members benefits lesser than those given to members of the Pasudeco
Workers Union, another labor group in the service of petitioner.

ISSUE: Whether the Court of Industrial Relations erred in awarding attorney's fees to the union's counsel equivalent to 20% of the
total amount of final judgment

HELD: No

RATIO: The written conformity of the President of said Sugar Workers Association on behalf thereof confirms the existence of such
an agreement on attorney's fees and constitutes an irrefutable evidence of such agreement. The trial court, therefore, had sufficient
evidence upon which it based its decision. The petitioner did not contest the allegations contained in the respondent's petition for
attorney's lien before the trial court. This constitutes an implied admission thereof. Moreover, it is evident from the tenor of the trial
court's order issued on June 6, 1974 that the said court carefully evaluated the respondent's petition for attorney's lien and even
reduced the percentage from 25 IC to 20 %.

ISSUE: Whether or not the quitclaim is valid

HELD: No

RATIO: This Court finds the quitclaims not valid. Firstly, said quitclaims were secured on December 27, 1972 by petitioner after it
lost its case in the lower court when the latter promulgated its decision on the case on December 4, 1972. Obviously in its desire to
deny what is due the sugar workers concerned and frustrate the decision of the lower court awarding benefits to them, it used its moral
ascendancy as employer over said workers to secure said quitclaims.

Secondly, while rights may be waived, the same must not be contrary to law, public order, public policy, morals or good customs or
prejudicial to a third person with a right recognized by law.

Thirdly, the alleged quitclaim agreements are contrary to public policy. Once a civil action is filed in court, the cause of action may
not be the subject of compromise unless the same is by leave of the court concerned. Otherwise, this will render the entire judicial
system irrelevant to the prejudice of the national interest. Parties to litigations cannot be allowed to trifle with the judicial system by
coming to court and later on agreeing to a compromise without the knowledge and approval of the court.

In the case at bar, petitioner acted with evident bad faith and malice. Petitioner secured the 53 quitclaim agreements individually with
the 53 sugar workers without the intervention of respondent's lawyer who was representing them before the lower court.
 SEVILLA TRADING COMPANY v SEVILLA

FACTS: For two to three years prior to 1999, petitioner Sevilla Trading Company (Sevilla Trading, for short), a domestic corporation
engaged in trading business, organized and existing under Philippine laws, added to the base figure, in its computation of the 13th-
month pay of its employees, the amount of other benefits received by the employees which are beyond the basic pay. These benefits
included:

(a) Overtime premium for regular overtime, legal and special holidays;

(b) Legal holiday pay, premium pay for special holidays;

(c) Night premium;

(d) Bereavement leave pay;

(e) Union leave pay;

(f) Maternity leave pay;

(g) Paternity leave pay;

(h) Company vacation and sick leave pay; and

(i) Cash conversion of unused company vacation and sick leave.

Petitioner claimed that it entrusted the preparation of the payroll to its office staff, including the computation and payment of the 13th-
month pay and other benefits. When it changed its person in charge of the payroll in the process of computerizing its payroll, and after
audit was conducted, it allegedly discovered the error of including non-basic pay or other benefits in the base figure used in the
computation of the 13th-month pay of its employees. It cited the Rules and Regulations Implementing P.D. No. 851 (13th-Month Pay
Law), effective December 22, 1975, Sec. 2(b) which stated that:

"Basic salary" shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not
include cost-of-living allowances granted pursuant to P.D. No. 525 or Letter of Instruction No. 174, profit-sharing payments, and all
allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the
time of the promulgation of the Decree on December 16, 1975.

Petitioner then effected a change in the computation of the thirteenth month pay

Now excluded from the base figure used in the computation of the thirteenth month pay are the following:

a) Overtime premium for regular overtime, legal and special holidays;

b) Legal holiday pay, premium pay for special holidays;

c) Night premium;

d) Bereavement leave pay;

e) Union leave pay;

f) Maternity leave pay;

g) Paternity leave pay;

h) Company vacation and sick leave pay; and

i) Cash conversion of unused vacation/sick leave.

Hence, the new computation reduced the employees’ thirteenth month pay.

ISSUE: Whether or not the exclusion of leaves and other related benefits in the computation of 13 th month pay is valid

HELD: No

RATIO: .A.V.A. Semana is correct in holding that petitioner’s stance of mistake or error in the computation of the thirteenth month
pay is unmeritorious. Petitioner’s submission of financial statements every year requires the services of a certified public accountant to
audit its finances. It is quite impossible to suggest that they have discovered the alleged error in the payroll only in 1999. This implies
that in previous years it does not know its cost of labor and operations. This is merely basic cost accounting. Also, petitioner failed to
adduce any other relevant evidence to support its contention. Aside from its bare claim of mistake or error in the computation of the
thirteenth month pay, petitioner merely appended to its petition a copy of the 1997-2002 Collective Bargaining Agreement and an
alleged "corrected" computation of the thirteenth month pay. There was no explanation whatsoever why its inclusion of non-basic
benefits in the base figure in the computation of their 13th-month pay in the prior years was made by mistake, despite the clarity of
statute and jurisprudence at that time.

In the light of the clear ruling of this Court, there is, thus no reason for any mistake in the construction or application of the law. When
petitioner Sevilla Trading still included over the years non-basic benefits of its employees, such as maternity leave pay, cash
equivalent of unused vacation and sick leave, among others in the computation of the 13th-month pay, this may only be construed as a
voluntary act on its part.

From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the computation of its employees’ thirteenth month
pay, without the payments for sick, vacation and maternity leave, premium for work done on rest days and special holidays, and pay
for regular holidays. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and
voluntary act on its part, sufficient in itself to negate any claim of mistake.

A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into
benefits enjoyed by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer.
 NESTLE PHILIPPINES, INC v NLRC

FACTS: In August, 1987, while the parties, were negotiating, the employees at Cabuyao resorted to a "slowdown" and walk-outs
prompting the petitioner to shut down the factory. Marathon collective bargaining negotiations between the parties ensued.

On September 2, 1987, the UFE declared a bargaining deadlock. On September 8, 1987, the Secretary of Labor assumed jurisdiction
and issued a return to work order. In spite of that order, the union struck, without notice, at the Alabang/Cabuyao factory, the Makati
office and Cagayan de Oro factory on September 11, 1987 up to December 8, 1987. The company retaliated by dismissing the union
officers and members of the negotiating panel who participated in the illegal strike. The NLRC affirmed the dismissals on November
2, 1988.

After the parties had filed their pleadings, the NLRC issued a resolution on June 5, 1989, whose pertinent disposition regarding the
union's demand for liberalization of the company's retirement plan for its workers, provides as follows:

xxx xxx xxx

7. Retirement Plan

The company shall continue implementing its retirement plan modified as follows:

a) for fifteen years of service or less — an amount equal to 100% of the employee's monthly salary for every year of service;

b) more than 15 but less than 20 years — 125% of the employee's monthly salary for every year of service;

c) 20 years or more — 150% of the employee's monthly salary for every year of service. (pp. 58-59, Rollo.)

ISSUE: Whether or not Nestle has the sole and exclusive prerogative to define the terms of the plan "because the workers have no
vested and demandable rights thereunder, the grant thereof being not a contractual obligation but merely gratuitous (regarding the
retirement plan)

HELD: No

RATIO: The Court agrees with the NLRC's finding that the Retirement Plan was "a collective bargaining issue right from the start"
(p. 109, Rollo) for the improvement of the existing Retirement Plan was one of the original CBA proposals submitted by the UFE on
May 8, 1987 to Arthur Gilmour, president of Nestlé Philippines. The union's original proposal was to modify the existing plan by
including a provision for early retirement. The company did not question the validity of that proposal as a collective bargaining issue
but merely offered to maintain the existing non-contributory retirement plan which it believed to be still adequate for the needs of its
employees, and competitive with those existing in the industry.

The NLRC correctly observed that the inclusion of the retirement plan in the collective bargaining agreement as part of the package of
economic benefits extended by the company to its employees to provide them a measure of financial security after they shall have
ceased to be employed in the company, reward their loyalty, boost their morale and efficiency and promote industrial peace, gives "a
consensual character" to the plan so that it may not be terminated or modified at will by either party

Since the retirement plan has been an integral part of the CBA since 1972, the Union's demand to increase the benefits due the
employees under said plan, is a valid CBA issue.

The petitioner's contention, that employees have no vested or demandable right to a non-contributory retirement plan, has no merit for
employees do have a vested and demandable right over existing benefits voluntarily granted to them by their employer.
 GLOBE MACKJAY v NLRC

FACTS: Wage Order No. 6, which took effect on 30 October 1984, increased the cost-of-living allowance of non-agricultural workers
in the private sector. Petitioner corporation complied with the said Wage Order by paying its monthly-paid employees the mandated
P3.00 per day COLA. However, in computing said COLA, Petitioner Corporation multiplied the P 3.00 daily COLA by 22 days,
which is the number of working days in the company.

Respondent Union disagreed with the computation of the monthly COLA claiming that the daily COLA rate of P3.00 should be
multiplied by 30 days to arrive at the monthly COLA rate. The union alleged furthermore that prior to the effectivity of Wage Order
No. 6, Petitioner Corporation had been computing and paying the monthly COLA on the basis of thirty (30) days per month and that
this constituted an employer practice, which should not be unilaterally withdrawn.

ISSUE: Whether or not Globe Mackjay may change its computation of COLA (from 30 to 22 days)

HELD: Yes

RATIO: Section 5 of the Rules Implementing Wage Orders Nos. 2, 3, 5 and 6 uniformly read as follows:

Section 5. Allowance for Unworked Days.

All covered employees shall be entitled to their daily living allowance during the days that they are paid their basic wage, even if
unworked. (Emphasis supplied)

The primordial consideration, therefore, for entitlement to COLA is that basic wage is being paid. In other words, the payment of
COLA is mandated only for the days that the employees are paid their basic wage, even if said days are unworked. So that, on the days
that employees are not paid their basic wage, the payment of COLA is not mandated.

Applied to monthly-paid employees if their monthly salary covers all the days in a month, they are deemed paid their basic wages for
all those days and they should be entitled to their COLA on those days "even if unworked," as the NLRC had opined. Peculiar to this
case, however, is the circumstance that pursuant to the Collective Bargaining Agreement (CBA) between Petitioner Corporation and
Respondent Union, the monthly basic pay is computed on the basis of five (5) days a week, or twenty two (22) days a month.

2) Payment in full by Petitioner Corporation of the COLA before the execution of the CBA in 1982 and in compliance with Wage
Orders Nos. 1 (26 March 1981) to 5 (11 June 1984), should not be construed as constitutive of voluntary employer practice, which
cannot now be unilaterally withdrawn by petitioner. To be considered as such, it should have been practiced over a long period of
time, and must be shown to have been consistent and deliberate. Adequate proof is wanting in this respect. The test of long practice
has been enunciated thus:

... Respondent Company agreed to continue giving holiday pay knowing fully well that said employees are not covered by the law
requiring payment of holiday pay.'
Moreover, before Wage Order No. 4, there was lack of administrative guidelines for the implementation of the Wage Orders. It was
only when the Rules Implementing Wage Order No. 4 were issued on 21 May 1984 that a formula for the conversion of the daily
allowance to its monthly equivalent was laid down,

Absent clear administrative guidelines, Petitioner Corporation cannot be faulted for erroneous application of the law. Payment may be
said to have been made by reason of a mistake in the construction or application of a "doubtful or difficult question of law."

Since it is a past error that is being corrected, no vested right may be said to have arisen nor any diminution of benefit under Article
100 of the Labor Code 3 may be said to have resulted by virtue of the correction.