1. CENTURY CANNING CORP VS CA 7.
In Nitto, the SC cited LC 61 and held that an apprenticeship should be program first be
G.R. NO. 152894
AUGUST 17, 2007
TOPIC: WHEN APPRENTICES MAY BE EMPLOYED
PETITIONER: CENTURY CANNING CORP
RESPONDENTS: CA AND GLORIA PALAD
PONENTE: PALAD
DOCTRINE: Prior approval by the DOLE of the proposed apprenticeship program is, therefore,
a condition sine qua non before an apprenticeship agreement can be validly entered into. The
act of filing the proposed apprenticeship program is a preliminary step towards final approval
and does not ipso facto give rise to an employer-apprentice relationship.
FACTS:
1. Petitioner hired Palad as a fish cleaner in its factory. On July 17, 1997, Palad signed an
apprenticeship w/ petitioner and was receiving PhP138/day. On July 25, 1997 Petitioner
sent such agreement to TESDA and DOLE w/c was approved by TESDA on September 26,
1997. (TAKE NOTE THAT THE APPROVAL WAS ONLY MADE MORE THAN 2 MONTHS AFTER
EXECUTING THE APPRENTICESHIP)
2. Per petitioner, Palad’s performance was evaluated and gave her a rating of “N.I” (Needs
Improvement) as she scored 27.75%/100% performance indicator. To add, Palad was tardy
and incurred many absences thus she was terminated.
3. Palad filed for illegal dismissal. Her complaint was dismissed by the LA for lack of merit but
ordered petitioner to pay her last salary and pro-rated 13th month pay. On appeal, the
NLRC affirmed the LA w/ the modifications to pay backwages.
4. At the CA, NLRC’s ruling was set aside and found that she was illegally dismissed. It ordered
petitioner to pay her underpayment and reinstatement.
a. It held that the apprenticeship w/c Palad signed was invalid and not binding as it was
executed more than 2 months before TESDA approved said apprenticeship program.
In Nitto vs NLRC, prior to the approval of DOLE of the apprenticeship program is a condition
sine qua non before an apprenticeship program may be validly entered into.
b. Petitioner failed to show that Palad was apprised of the required standards and she
was deprived of due process due to the absence of notice and hearing.
5. ISSUE: WoN Palad was an apprentice – NO
RULING
REGISTRATION/APPROVAL BY THE TESDA REQUIRED BEFORE HIRING APPRENTICES
6. An apprentice is a worker who is covered by a written apprenticeship agreement with an
employer. The Labor Code provides:
ART. 60. Employment of apprentices. — Only employers in the highly technical industries
may employ apprentices and only in apprenticeable occupations approved by the
Minister of Labor and Employment.
ART. 61 ART. 61. Contents of apprenticeship agreements. — Apprenticeship agreements,
including the wage rates of apprentices, shall conform to the rules issued by the Minister of
Labor and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable minimum wage, may be
entered into only in accordance with apprenticeship programs duly approved by the
Minister of Labor and Employment. The Ministry shall develop standard model programs
of apprenticeship
approved by the DOLE before an apprentice may be hired otherwise said person is deemed
a regular employee.
8. Petitioner did not comply w/ the legal requirements. It is mandated that apprenticeship
agreements entered into by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly approved by the Minister of Labor and
Employment. Prior approval by the DOLE of the proposed apprenticeship program is,
therefore, a condition sine qua non before an apprenticeship agreement can be validly
entered into. The act of filing the proposed apprenticeship program is a preliminary step
towards final approval and does not ipso facto give rise to an employer-apprentice
relationship.
9. LC 57 provides that the State aims to to "establish a national apprenticeship program
through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices."
Thus the DOLE’s prior approval to any apprenticeship program has to be secured as a
condition sine qua non before any such apprenticeship agreement can be fully enforced.
The role of the DOLE in apprenticeship programs and agreements cannot be debased. In
other words, the agreement between said parties herein are unenforceable and ineffective
in the absence of valid apprenticeship program.
10. Further, RA 7796 (TESDA Law) has transferred authority over apprenticeship programs w/
the DOLE’s Bureau of Local Employment as provided in Sec. 4.
SEC. 4. Definition of Terms. — As used in this Act:
j) "Apprenticeship" training within employment with compulsory related theoretical
instructions involving a contract between an apprentice and an employer on an approved
apprenticeable occupation;
k) "Apprentice" is a person undergoing training for an approved apprenticeable
occupation during an established period assured by an apprenticeship agreement;
l) "Apprentice Agreement" is a contract wherein a prospective employer binds himself to
train the apprentice who in turn accepts the terms of training for a recognized
apprenticeable occupation emphasizing the rights, duties and responsibilities of each
party;
m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body
and approved for apprenticeship by the Authority [TESDA];
11. In this case, the parties executed the apprenticeship agreement on 17 July 1997 wherein
it was stated that the training would start on 17 July 1997 and would end approximately in
December 1997.17 On 25 July 1997, petitioner submitted for approval its apprenticeship
program, which the TESDA subsequently approved on 26 September 1997.18 Clearly, the
apprenticeship agreement was enforced even before the TESDA approved petitioner’s
apprenticeship program. Thus, the apprenticeship agreement is void because it lacked
prior approval from the TESDA.
12. Employers can only hire apprentices for apprenticeable occupations which must be
officially endorsed by a tripartite body and approved for apprenticeship by the TESDA. This
is to ensure the protection of apprentices and to obviate possible abuses by prospective
employers who may want to take advantage of the lower wage rates for apprentices and
circumvent the right of the employees to be secure in their employment.
13. The TESDA requisite was further emphasized by DOLE’s DO No. 68-04 w/c provides the
guidelines in the implementation of such program. It particularly puts emphasis that no
enterprise shall be allowed to hire apprentices unless such program is registered and
 approved by TESDA. Since she is not an apprentice due to the absence of such requisite,
Palad is a regular employee and her job was necessary for petitioner’s business.
ILLEGAL TERMINATION
14. LC 277(b) and 279 provides for the basis of terminating the services of an employee for
just case and the required notice and hearing. 2 concurring requisites must happen: 1)
dismissal shall be for just cause; and 2) the employee must have a chance to defend
himself.
15. In this case, the LA held that petitioner terminated Palad for habitual absenteeism and
poor efficiency of performance. Under Sec. 25, Rule VI, Book II of the Implementing Rules
of the LC, habitual absenteeism and poor efficiency of performance are among the valid
causes for which the employer may terminate the apprenticeship agreement after the
probationary period. But this was reversed by the NLRC.
16. As to dismissal’s validity, the LA’s findings that Palad was dismissed due to failure to meet
the standards is nebulous. It appears is that Palad already passed the probationary status
of the apprenticeship agreement of 200 hours at the time she was terminated on 28
November 1997 which was already the fourth month of the apprenticeship period of 1000
hours. As such, under the LC, she can only be dismissed for cause, in this case, for poor
efficiency of performance on the job or in the classroom for a prolonged period despite
warnings duly given to the apprentice.
17. There was no clear and sufficient evidence exist to warrant her dismissal as an apprentice
during the agreed period. Besides the absence of any written warnings given to
complainant reminding her of "poor performance," petitioner’s evidence in this respect
consisted of an indecipherable or unauthenticated xerox of the performance evaluation
allegedly conducted on complainant. This is of doubtful authenticity and/or credibility,
being not only incomplete in the sense that appearing thereon is a signature (not that of
complainant) side by side with a date indicated as "1/16/98". From the looks of it, this
signature is close to and appertains to the typewritten position of "Division/Department
Head", which is below the signature of complainant’s immediate superior who made the
evaluation indicated as "11-15-97."
18. The only conclusion that could be inferred is that this evaluation was made belatedly,
specifically, after the filing of the case and during the progress thereof in the Arbitral level,
as shown that nothing thereon indicate that complainant was notified of the results. Its
authenticity therefor, is a big question mark, and hence lacks any credibility. Evidence, to
be admissible in administrative proceedings, must at least have a modicum of authenticity.
This, respondents failed to comply with. As such, complainant is entitled to the payment
of her wages for the remaining 2 months of her apprenticeship agreement.
19. LA’s ruling was based on Palad’s alleged poor performance as evaluated by petitioner but
Palad insisted that she was unaware of such evaluation and was uninformed of the results
of it. She did not receive any notice of dismissal nor was given a chance to be heard. But
petitioner claimed that it was due to her frequent absences that she was unable to receive
such documents.
20. Under LC 227, employer bears the burden of proving that the employee was validly
terminated for just cause. In this case. Petitioner failed to substantiate its claim that Palad
was terminated for valid reasons. In fact, the NLRC found that it failed to prove the
authenticity of the performance evaluation which petitioner claims to have conducted on
Palad, where Palad received a performance rating of only 27.75%. Petitioner merely relies
on the performance evaluation to prove Palad’s inefficiency. And it was not shown that
petitioner ever apprised Palad of the performance standards set by the company. When
the alleged valid cause for the termination of employment is not clearly proven, as in this
case, the law considers the matter a case of illegal dismissal. No due process was accorded
to her as no proof was furnished by petitioner.
FALLO: WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the Resolution
dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.
2.) Nitto Enterprises vs. NLRC
GR NO. 114337
September 29 1995
Topic: When apprentice may be employed
Petitioners: Nitto Enterprses
Respondent: National Labor Relations Commission and Roberto Capili
By: Martin
FACTS
1. Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum
products, hired Roberto Capili sometime in May 1990 as an apprentice machinist,
molder and core maker as evidenced by an apprenticeship agreement for a period
of six (6) months from May 28, 1990 to November 28, 1990
2. At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of
glass which he was working on, accidentally hit and injured the leg of an office
secretary who was treated at a nearby hospital.
3. Later that same day, after office hours, private respondent entered a workshop within
the office premises which was not his work station. There, he operated one of the
power press machines without authority and in the process injured his left thumb.
Petitioner spent the amount of P1,023.04 to cover the medication of private
respondent.
4. The following day, Roberto Capili was asked to resign in a letter
5. Private respondent executed a Quitclaim and Release in favor of petitioner for and
in consideration of the sum of P1,912.79.
6. 3 days after, private respondent formally filed before the NLRC a complaint for illegal
dismissal and payment of other monetary benefits.
7. Labor Arbiter rendered his decision finding the termination of private respondent as
valid and dismissing the money claim for lack of merit.
8. Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of
Roberto Capilian was valid. First, private respondent who was hired as an apprentice
violated the terms of their agreement when he acted with gross negligence resulting
in the injury not only to himself but also to his fellow worker. Second, private
respondent had shown that "he does not have the proper attitude in employment
particularly the handling of machines without authority and proper training.
9. The NLRC declared that private respondent was a regular employee of petitioner by
ruling thus:
10. As correctly pointed out by the complainant, we cannot understand how an
apprenticeship agreement filed with the Department of Labor only on June 7, 1990
could be validly used by the Labor Arbiter as basis to conclude that the complainant
was hired by respondent as a plain "apprentice" on May 28, 1990. Clearly,
therefore, the complainant was respondent's regular employee under Article 280
of the Labor Code, as early as May 28,1990, who thus enjoyed the security of
tenure guaranteed in Section 3, Article XIII of our 1987 Constitution.
ISSUE
WON Public Respondent NLRC committed grave abuse of discretion in holding that private
respondent was not an apprentice. (NO)
HELD/RATIO
1. Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot
plainly be considered an apprentice since no apprenticeship program had yet been
filed and approved at the time the agreement was executed.
2. Petitioner further insists that the mere signing of the apprenticeship agreement
already established an employer-apprentice relationship.
3. Petitioner's argument is erroneous.
4. The law is clear on this matter. Article 61 of the Labor Code provides:
a. Contents of apprenticeship agreement. — Apprenticeship
agreements, including the main rates of apprentices, shall conform to
the rules issued by the Minister of Labor and Employment. The period
of apprenticeship shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75% per cent of the applicable
minimum wage, may be entered into only in accordance with
apprenticeship program duly approved by the Minister of Labor and
Employment. The Ministry shall develop standard model programs of
apprenticeship.
5. In the case at bench, the apprenticeship agreement between petitioner and private
respondent was executed on May 28, 1990 allegedly employing the latter as an
apprentice in the trade of "care maker/molder." On the same date, an
apprenticeship program was prepared by petitioner and submitted to the
Department of Labor and Employment. However, the apprenticeship Agreement
was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced
the day it was signed.
6. Based on the evidence before us, petitioner did not comply with the requirements
of the law. It is mandated that apprenticeship agreements entered into by the
employer and apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor and Employment.
7. Prior approval by the Department of Labor and Employment of the proposed
apprenticeship program is, therefore, a condition sine quo non before an
apprenticeship agreement can be validly entered into.
8. The act of filing the proposed apprenticeship program with the Department of Labor
and Employment is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice relationship.
9. Article 57 of the Labor Code provides that the State aims to "establish a national
apprenticeship program through the participation of employers, workers and
government and non-government agencies" and "to establish apprenticeship
standards for the protection of apprentices." To translate such objectives into
existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement can
be fully enforced. The role of the DOLE in apprenticeship programs and agreements
cannot be debased.
10. Hence, since the apprenticeship agreement between petitioner and private
respondent has no force and effect in the absence of a valid apprenticeship
program duly approved by the DOLE, private respondent's assertion that he was
hired not as an apprentice but as a delivery boy ("kargador" or "pahinante")
deserves credence. He should rightly be considered as a regular employee of
petitioner as defined by Article 280 of the Labor Code:
a. Art. 280. Regular and Casual Employment. — The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade
of the employer, except 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 or where the work or services to be performed is seasonal
in nature and the employment is for the duration of the season.
11. An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists and pursuant to the constitutional mandate
to "protect the rights of workers and promote their welfare.
Other Issue WON private respondent was validly dismissed-NO
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three
days after he was made to sign a Quitclaim, a clear indication that such resignation was not
voluntary and deliberate. There was no proper due process given to the private respondent
Appealed Decision affirmed
Letter of Private Respondent
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung papaano
gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang paggamit ng tool at
may disgrasya at nadamay pa ang isang sekretarya ng kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya ay pumasok
sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at kinalikot ang makina at
nadisgrasya niya ang kanyang sariling kamay.
Nakagastos ang kompanya ng mga sumusunod:
Emergency and doctor fee P715.00
Medecines (sic) and others 317.04
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang tahi
ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng Agosto,
1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang kamay,
pagkatapos ng siyam na araw mula ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, kasama ng
kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.
Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking pagkakasala sa
hindi pagsunod sa alintuntunin ng kompanya.
(Sgd.) Roberto Capili
3. ATLANTA INDUSTRIES, INC. v. SEBOLINO, et. al.
26 January 2011 | Brion, J.
Employer-Employee Relationship: Apprenticeship Agreement
PETITIONER-APPELLANT: Atlanta Industries, Inc. and/or Robert Chan (COO)
RESPONDENT-APPELLEE: Aprilito R. Sebolino, Khim V. Costales, Alvin V. Almoite, And Joseph
S. Sagun (Workers)
SUMMARY: Complainants were engaged as apprentices in Atlanta Corp. and now suing the
corporation for illegal dismissal, among others, for its refusal to grant them regular status 6
months after commencing their apprenticeship.
DOCTRINE: An apprenticeship agreement only entered into after the probationary
employment expires does not bar the regularization of such employees
FACTS:
1. On March and February of 2005, respondents filed several complaints for illegal
dismissal, regularization, underpayment, nonpayment of wages and other money
claims, as well as claims for moral and exemplary damages and attorney’s fees
against the petitioners Atlanta Industries, Inc. and its President & COO Robert Chan
alleging that
a. They had attained regular status as they were allowed to work
with Atlanta for more than six (6) months from the start of a purported
apprenticeship agreement
b. They were illegally dismissed after the agreement expired.
2. In defense, petitioner argued
a. That the workers were not entitled to regularization and to their money
claims because they were engaged as apprentices under a government-
approved apprenticeship program.
b. The company offered to hire them as regular employees in the event
vacancies for regular positions occur in the section of the plant where they
had trained.
c. They claimed that their names did not appear in the list of employees prior
to their engagement as apprentices.
3. On April 24, 2006, Labor Arbiter Medroso
a. Dismissed the complaint with respect to dela Cruz, Magalang, Zao and
Chiong, but found the termination of service of the remaining nine to be
illegal.
b. Awarded the dismissed workers back wages, wage differentials, holiday
pay and service incentive leave pay amounting to P1,389,044.57 in the
aggregate.
4. Petitioner appealed to the National Labor Relations Commission (NLRC).
5. During the pendency of the case, Ramos, Alegria, Villagomez, Costales and Almoite
allegedly entered into a compromise agreement with Atlanta which agreed to pay
the workers a specified amount as settlement, and to acknowledge them at the same
time as regular employees except for Ramos.
6. On December 29, 2006, the NLRC modified the ruling of the labor arbiter,
a. Withdrawing the illegal dismissal finding with respect to Sagun, Mabanag,
Sebolino and Pedregoza;
b. Affirming the dismissal of the complaints of dela Cruz, Zao, Magalang and
Chiong;
c. Approving the compromise agreement entered into by Costales, Ramos,
Villagomez, Almoite and Alegria; and
d. Denying all other claims.
7. Respondents (Sebolino, Costales, Almoite, and Sagun) moved for the
reconsideration of the decision, but the NLRC denied the motion
8. The four then sought relief from the CA through certiorari charging that
a. NLRC committed grave abuse of discretion when it
i. Failed to recognize their prior employment with Atlanta;
ii. Declared the second apprenticeship agreement valid;
iii. Held that their dismissal is legal; and
iv. Upheld the compromise agreement involving Costales, Ramos,
Villagomez, Almoite and Alegria.
9. The CA granted their petition on the following reasons
a. That the respondents were already employees of the company before
they entered into the first and second apprenticeship agreements
b. That the first and second apprenticeship agreements were defective as
they were executed in violation of the law and the rules because it
i. Did not indicate the trade or occupation in which the
apprentice would be trained
ii. Was not approved by TESDA
c. That the positions occupied by the respondents (machine operator,
extruder operator, and scaleman) are necessary in the manufacture of
plastic building materials, the company’s main business.
d. That the dismissal was illegal for lack of a just or authorized cause and
notice.
e. That the compromise agreement was not binding on Costales and Almoite
because they did not sign the agreement.
ISSUE/S: W/N the termination of the employees after the expiration of the apprenticeship
agreement was valid cause for dismissal, NO
RULING:
● Based on company operations at the time material to the case, respondents were
already rendering service to the company as employees before they were made to
undergo apprenticeship. The company itself recognized the respondents’ status
through relevant operational records.
 ● The Master List (of employees) that the petitioners heavily rely upon as proof of their
position that the respondents were not Atlanta’s employees, at the time they were
engaged as apprentices, is unreliable and does not inspire belief. The list itself
contradicts a lot of Atlanta’s claims and allegations.
● The fact that respondents were already rendering service to the company when they
were made to undergo apprenticeship (as established by the evidence) renders the
apprenticeship agreements irrelevant as far as they are concerned. Such tasks and
their nature characterized the respondents as regular employees under Article 280
of the Labor Code. Thus, when they were dismissed without just or authorized cause,
without notice, and without the opportunity to be heard, their dismissal was illegal.
DISPOSITION: Petition, DENIED. CA decision, AFFIRMED.
4. Bernardo v. NLRC
G.R. No. 122917
July 12, 1999
By: JANINE
Topic: Training and Employment of Disabled Persons (Handicapped Workers): Rights and
Privileges
Petitioners: MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, et al.
Respondents: NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST
COMPANY
Ponente: PANGANIBAN, J.
____________________________________________________________________
FACTS:
● Complainants numbering 43 are deaf-mutes who were hired on various periods from
1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters
through a uniformly worded agreement called "Employment Contract for Handicapped
Workers".
● Their employments were renewed every six months such that by the time this case
arose, there were 56 deaf-mutes who were employed by respondent under the said
employment agreement.
● Disclaiming that complainants were regular employees, respondent Far East Bank and
Trust Company maintained:
o that complainants who are a special class of workers — the hearing impaired
employees were hired temporarily under a special employment arrangement
which was a result of overtures made by some civic and political personalities
to the respondent Bank;
o complainants were hired due to "pakiusap" which must be considered in the
light of the context career and working environment which is to maintain and
strengthen a corps of professionals trained and qualified officers and regular
employees who are baccalaureate degree holders from excellent schools
which is an unbending policy in the hiring of regular employees; in addition to
this, training continues so that the regular employee grows in the corporate
ladder;
o the idea of hiring handicapped workers was acceptable to them only on a
special arrangement basis;
o it was adopted the special program to help tide over a group of workers such
as deaf-mutes like the complainants who could do manual work for the
respondent Bank;
o the task of counting and sorting of bills which was being performed by tellers
could be assigned to deaf-mutes that the counting and sorting of money are
tellering works which were always logically and naturally part and parcel of
the tellers' normal functions;
o that from the beginning there have been no separate items in the respondent
Bank plantilla for sortes or counters;
o the tellers themselves already did the sorting and counting chore as a regular
feature and integral part of their duties;
o that through the "pakiusap" of Arturo Borjal, the tellers were relieved of this
task of counting and sorting bills in favor of deaf-mutes without creating new
positions as there is no position either in the respondent or in any other bank
in the Philippines which deals with purely counting and sorting of bills in
banking operations.
● The labor arbiter ruled against petitioners.
● NLRC affirmed the ruling of the labor arbiter:
o petitioners could not be deemed regular employees under Article 280 of the
Labor Code, as amended.
o complainants were hired as an accommodation to the recommendation of
civic oriented personalities whose employments were covered by Employment
Contracts with special provisions on duration of contract as specified under
Art. 80.
o Magna Carta for Disabled Persons was not applicable, "considering the
prevailing circumstances/milieu of the case."
ISSUE: WON petitioners have become regular employees.
HELD: Yes. However, only the employees, who worked for more than six months and whose
contracts were renewed are deemed regular.
The uniform employment contracts of the petitioners stipulated that they shall be
trained for a period of one month, after which the employer shall determine whether or not
they should be allowed to finish the 6-month term of the contract. Furthermore, the
employer may terminate the contract at any time for a just and reasonable cause. Unless
renewed in writing by the employer, the contract shall automatically expire at the end of the
term.
According to private respondent, the employment contracts were prepared in
accordance with Article 80 of the Labor code.
The stipulations in the employment contracts indubitably conform with the aforecited
provision. Succeeding events and the enactment of RA No. 7277 (the Magna Carta for
Disabled Persons), however, justify the application of Article 280 of the Labor Code.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from 1988 to
1993. Verily, the renewal of the contracts of the handicapped workers and the hiring of
others lead to the conclusion that their tasks were beneficial and necessary to the bank.
More important, these facts show that they were qualified to perform the responsibilities of
their positions. In other words, their disability did not render them unqualified or unfit for
the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms and conditions of employment as a qualified able-
bodied person. Section 5 of the Magna Carta provides:
Sec. 5. Equal Opportunity for Employment. — No disabled person shall be denied access
to opportunities for suitable employment. A qualified disabled employee shall be
subject to the same terms and conditions of employment and the same compensation,
privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied
person.
The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor
Code.
Without a doubt, the task of counting and sorting bills is necessary and desirable to the
business of respondent bank. With the exception of sixteen of them, petitioners performed
these tasks for more than six months.
As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the simple
expedient of extending to them probationary appointments, ad infinitum." The contract
signed by petitioners is akin to a probationary employment, during which the bank
determined the employees' fitness for the job. When the bank renewed the contract after
the lapse of the six-month probationary period, the employees thereby became regular
employees. No employer is allowed to determine indefinitely the fitness of its employees.
As regular employees, the twenty-seven petitioners are entitled to security of tenure;
that is, their services may be terminated only for a just or authorized cause. Because
respondent failed to show such cause, these twenty-seven petitioners are deemed illegally
dismissed and therefore entitled to back wages and reinstatement without loss of seniority
rights and other privileges. Considering the allegation of respondent that the job of money
sorting is no longer available because it has been assigned back to the tellers to whom it
originally belonged, petitioners are hereby awarded separation pay in lieu of reinstatement.
Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
In rendering this Decision, the Court emphasizes not only the constitutional bias in favor
of the working class, but also the concern of the State for the plight of the disabled. The
noble objectives of Magna Carta for Disabled Persons are not based merely on charity or
accommodation, but on justice and the equal treatment of qualified persons, disabled or not.
In the present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their work.
The eloquent proof of this statement is the repeated renewal of their employment contracts.
Why then should they be dismissed, simply because they are physically impaired? The Court
believes, that, after showing their fitness for the work assigned to them, they should be
treated and granted the same rights like any other regular employees.
WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995
Decision and the August 4, 1995 Resolution of the NLRC are REVERSED and SET ASIDE.
Respondent Far East Bank and Trust Company is hereby ORDERED to pay back wages and
separation pay to each of the following twenty-seven (27) petitioners…The NLRC is hereby
directed to compute the exact amount due each of said employees, pursuant to existing laws
and regulations, within fifteen days from the finality of this Decision.
5 MANILA TERMINAL CO,. INC. V CIR
GR # L-4148
By: JT
Topic: Regulation; Rationale
Petitioners: Manila Terminal Co, Inc.
Respondents: Manila Terminal Relief and Mutual Aid
Ponente: Paras, C. J.
Facts:
· On Sep. 1, 1945 Manila Terminal Company Inc, engaged in arrastre service in
Manila Port Area hired 30 men as watchmen on 12-hr shifts at a compensation
of 3 pesos per day for the day shift, and 6 pesos per day for the night shift.
· Dominador Jimenez, a member of Manila Terminal Relief and Mutual Aid
Association sent a letter to DOLE requesting for an investigation with regard to
their overtime pay from Manila Terminal Company Inc.
· DOLE did nothing. Subsequently, 5 other employees and members of the
Association filed a 5-point demand with the DOLE, including overtime pay but
the DOLE failed again to act on their demand.
· On May 27, 1947, Manila Terminal Company adopted the system of 8-hour shift
strictly.
· The Association filed an amended petition before the Court of Industrial Relations,
praying that the petitioner be ordered to pay its watchmen or police force
overtime pay from the commencement of their employment.
· On May 9, 1949 by virtue of Customs Administrative Order 81 and EO 228, the
entire watchmen of the petitioner was consolidated with Manila Harbor Police
of the Customs Patrol Service.
· Judge Yanson of the Court of Industrial Relations dismissed other demands of the
association on the ground of lack of jurisdiction. However, he granted the
prayer of the association with regard to overtime pay. He ordered that the
petitioner must pay its watchmen on the following mechanics:
o Base pay corresponding to 4 hours overtime plus 25% thereof as
additional overtime compensation from Sep. 1, 1945 to May 24, 1947;
o Additional 25% to those who worked from 6pm to 6am during Sep 1,
1945 to May 24, 1947;
o Additional 50% for work performed on Sundays and Legal Holidays
during Sep 1, 1945 to May 24, 1947;
o Additional 50% for work performed on Sundays and Legal Holidays from
May 24, 1947 to May 9, 1949;
o Additional 25% for work performed at night from May 29, 1947 to May
9, 1949.
· For overtime services after the Integration of the watchmen to the Manila Harbor
Police, Judge Yanson ruled that such issue is out of jurisdiction because it affects
Bureau of Customs, being an independent instrumentality of the Government.
 · Both of the parties filed a Motion for Reconsideration.
· Judge Lanting ruled that the decision of Judge Yanson must be affirmed in so far
it grants compensation for overtime on regular days. However, for Sundays and
Legal Holidays from Sep 1, 1945 to May 24, 1957, Manila Terminal Company is
only obliged to pay its watchmen corresponding to the overtime (excess of 8
hrs) at the regular rate only, without any additional amount.
· Manila Terminal Company filed a petition for certiorari alleging:
o The Court of Industrial Relations have no jurisdiction over the subject
matter;
o That the contract signed by the watchmen indicates that their salaries
already includes overtime pay;
o That the association is barred by estoppel and laches;
o That the employment contract being void, precludes any recovery by
the Association.
ISSUES/RULING:
1. WON the CIR has jurisdiction over the case - YES
- In the case of Detective & Protective Bureau, Inc. v Court of Industrial relations
and United Employees Welfare Association, the Court ruled that CIR has
jurisdiction to award a money judgment. An overtime pay is a monetary
judgment and under Commonwealth Act No. 103 the Court is empowered to
make such order for settling disputes between the employee and employer.
2. WON the salaries of the watchmen already includes overtime pay – NO
- People are urged by the instinct of self-preservation, hence in search for any
employment, regardless of its terms and conditions, their main concern in the
first place is being admitted to some work. (They don’t have the power to
bargain)
- In addition, if it is true that their salaries already include overtime pay, how
come their salaries remained the same when Manila Terminal strictly applied
the 8-hr shift rule. (Dapat mas mababa na salary if kasama talaga overtime pay
before)
3. WON The Association is barred by estoppel and laches – NO
- Laborers cannot waive their right to extra compensation as it is contrary to the
spirit of Eight Hour Labor Law.
- The law punishes the employer for its violation and leaves the employee or
laborer free and blameless.
4. WON the invalidity of the employment contract precludes recovery by the
Association - NO
- The employee in rendering extra service at the request of his employer has a
right to assume that the employer has complied with the requirement of the
law, and therefore has obtained the required permission to allow overtime
work from the DOLE.
- The 8-hr law benefits the laborer and employees. Hence, the employer cannot
invoke any violation of the act to exempt him from liability for extra
compensation. Only the employer can be liable for violation of the 8-hr Law.
- Petitioner herein is required to comply with the law and should therefore be
made liable for the consequences of its violation.
Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being
understood that the petitioner's watchmen will be entitled to extra compensation only from
the dates they respectively entered the service of the petitioner, hereafter to be duly
determined by the Court of Industrial Relations. So ordered, without costs.
6 SAN MIGUEL CORPORATION V LAYOC
GR # 149640
By: IÑIGO UNTALAN
Topic: MANAGERIAL EMPLOYEES
Petitioners: SAN MIGUEL CORPORATION, ANDRES SORIANO III, FRANCISCO C. EIZMENDI, JR.,
and FAUSTINO F. GALANG
Respondents: NUMERIANO LAYOC, JR., CARLOS APONESTO, PAULINO BALDUGO, QUEZON
BARIT, BONIFACIO BOTOR, HERMINIO CALINA, DANILO CAMINGAL, JUAN DE MESA, REYNOLD
DESEMBRANA, BERNARDITO DEUS, EDUARDO FILLARTA, MAXIMIANO FRANCISCO, MARIO
MARILIM, DEMETRIO MATEO, FILOMENO MENDOZA, CONRADO NIEVA, FRANCISCO PALINES,
FELIPE POLINTAN, MALCOLM SATORRE, and ALEJANDRO TORRES
Ponente: Carpio
FACTS:
● Respondents (Security Guards) were among the "Supervisory Security Guards" of the
Beer Division of the San Miguel Corporation (SMC)
o They started working as guards with the San Miguel Corporation assigned to
the Beer Division (SMC-BD) on different dates until such time that they were
promoted as supervising security guards
● From the commencement of their employment, the security guards were required to
punch their time cards for purposes of determining the time they would come in and
out of the company's work place
o They were availing the benefits for overtime, holiday and night premium duty
through time card punching
● In the early 90s, SMC embarked on a Decentralization Program aimed at enabling the
separate divisions of the San Miguel Corporation to pursue a more efficient and
effective management of their respective operations
● SMC-BD implemented on January 1, 1993 a "no time card policy" (policy) whereby the
Supervisory I and II composing of the supervising security guards of the Beer Division
were no longer required to punch their time cards
● In lieu of the OT and premium pay, the personnel of SMC-BD affected by the Policy were
given a 10% across-the-board increase on their basic pay while the supervisors who
were assigned in the night shift (6:00 p.m. to 6:00 a.m.) were given night shift allowance
ranging from P2,000.00 to P2,500.00 a month
● Respondents filed a complaint for unfair labor practice, violation of Article 100 of the
Labor Code of the Philippines, and violation of the equal protection clause and due
process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code of
the Philippines
o They allege that SMC-BD maliciously and fraudulently refused payment of
their overtime, holiday, and night premium pay from 1 to 15 January 1993
because of the "no time card policy."
o That SMC-BD had no written authority to stop respondents from punching
their time cards because the alleged memorandum authorizing such stoppage
did not include supervisory security guards
● SMC-BD maintained that respondents were supervisory security guards who were
exempt from the provisions of the Labor Code on hours of work, weekly rest periods,
and rest days
o That the policy was a valid exercise of management prerogatives and that it
granted granted respondents an across-the-board increase of 10% of basic
● LA: The facts and the evidence are in respondents' favor. Arbiter Canizares ruled that
rendering services beyond the regular eight-hour work day has become company
practice
o SMC-BD failed to show good faith in the exercise of their management
prerogative in altering company practice because it changed the terms and
conditions of employment from "hours of work rendered" to "result" only
with respect to respondents and not with other supervisors in other
departments
● NLRC: Affirmed (there was a violation of the principle of non-diminution of benefits;
there was already an established company practice)
● CA: Security guards were performing duties and responsibilities performed by those
who were considered as officers or members of the managerial staff
o But SMC-BD, while it exercised management prerogative, could not withdraw
the long-accepted practice of paying OT and premium pay
ISSUE: Whether the circumstances warrant an exception to the rule that supervisory
employees are not entitled to OT pay? No.
HELD/RATIO:
● Both SMC-BD and respondents agree that respondents are supervising security guards
and, thus, managerial employees
● Article 82 13 of the Labor Code states that the provisions of the Labor Code on working
conditions and rest periods shall not apply to managerial employees
o The other provisions in the Title include normal hours of work (Article 83),
hours worked (Article 84), meal periods (Article 85), night shift differential
(Article 86), overtime work (Article 87), undertime not offset by overtime
(Article 88), emergency overtime work (Article 89), and computation of
additional compensation (Article 90)
● It is thus clear that—
o General Rule: Managerial employees are not entitled to overtime pay for
services rendered in excess of eight hours a day
● Respondents failed to show that the circumstances of the present case constitute an
exception to this general rule
Diminution of Benefits
● Respondents assert that Article 100 14 of the Labor Code prohibits the elimination or
diminution of benefits
● SMC-BD did not freely give the payment for overtime work to respondents
o Petitioners paid OT pay as compensation for services rendered in addition to
the regular work hours
o Respondents rendered overtime work only when their services were needed
after their regular working hours and only upon the instructions of their
superiors
● Respondents were not able to present anything to prove that petitioners were obliged
to permit respondents to render overtime work and give them the corresponding
overtime pay
o Even if SMC-BD did not institute a "no time card policy," respondents could
not demand overtime pay from petitioners if respondents did not render
overtime work
● The requirement of rendering additional service differentiates OT pay from benefits
such as thirteenth month pay or yearly merit increase
o These benefits do not require any additional service from their beneficiaries
● OT pay does not fall within the definition of benefits under Article 100 of the Labor Code
Equal Protection
● Respondents allege that SMC-BD discriminated against them vis-a-vis supervising
security guards in other SMC divisions
o They should be treated in the same manner as supervising security guards in
the Packaging Products Division, who are allowed to render OT work and thus
receive overtime pay
● Petitioners counter by saying that the "no time card policy" was applied to all
supervisory personnel in the Beer Division
o That there would be discrimination if respondents were treated differently
from other supervising security guards within the Beer Division or if other
supervisors in the Beer Division are allowed to render overtime work and
receive overtime pay
o SMC-BD merely exercised its management prerogative of treating its
supervisors differently from its rank-and-file employees, both as to
responsibilities and compensation, as they are not similarly situated
● The discretion granted to the various divisions of SMC in the management and
operation of their respective businesses and in the formulation and implementation of
policies affecting their operations and their personnel, the "no time card policy"
affecting all of the supervisory employees of the Beer Division is a valid exercise of
management prerogative
● The "no time card policy" undoubtedly caused pecuniary loss to respondents
o But SMC-BD granted to respondents and other supervisory employees a 10%
across-the- board increase in pay and night shift allowance, in addition to their
yearly merit increase in basic salary, to cushion the impact of the loss
● So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold them

7. NAWASA v. NAWASA Consolidated Unions
GR NO. L-18939
August 31, 1964
By: Oman
Topic: Managerial Employees - Rationale
Petitioners: National Waterworks and Sewerage Authority
Respondents: NWSA Consolidated Unions et. al
Ponente:
DOCTRINE: Employees who have little freedom of action and whose main function is
merely to carry out the company's orders, plans and policies, are not managerial
employees and hence are covered by Commonwealth Act No. 444
FACTS
- President certified to the CIR a controversy between NAWASA and the
unions involving the implementation of the 40-hour work week law (RA
1880), alleged violations of the CBA concerning distress pay, minimum
wage of P5.25, promotional appointments and filling of vacancies of
newly created positions; additional compensation for night work; wage
increases to some laborers and employees; and strike duration pay.
Unions also raised the issue of whether the 25% additional
compensation for Sunday work should be included in computing the
daily wage and whether, in determining the daily wage of a monthly-
salaried employee, the salary should be divided by 30 days.
- Centeno, et al. are intervenors for the issue on additional compensation
for night work. Later they amended their petition by including a new
demand for overtime pay in favor of Jesus Centeno, Cesar Cabrera,
Feliciano Duiguan, Cecilio Remotigue, and other employees receiving
P4,200.00 p.a. or more
o Feb 5, 1958: petitioner filed a motion to dismiss the claim for
overtime pay
§ As mere intervenors, the latter cannot raise new issues
not litigated in the principal case, the same not being
the lis mota involved.
o CIR: allowed the issue to be litigated. Petitioner's MR having
been denied, it filed its answer to the petition for intervention.
- Jan 16, 1961: CIR ruled that
o NAWASA is an agency not performing governmental functions
and is thus liable to pay additional compensation for work on
Sundays and legal holidays conformably to CA 444 (8-Hour
Labor Law), even if said days should be within the staggered 5
work days authorized by the President
o intervenors do not fall within the category of "managerial
employees" as contemplated in RA 2377 and so are NOT
exempt from the coverage of the 8-Hour Labor Law
o computation followed by NAWASA in computing overtime
compensation is contrary to CA 444
o undertime of a worker should NOT be set-off against the worker
in determining whether he rendered service in excess of 8
hours for that day;
o in computing the daily wage of those employed daily, the
additional 25% compensation for Sunday work should be
included
o computation used by NAWASA for monthly salaried employees
(dividing the monthly basic pay by 30) is erroneous
o minimum wage awarded by CIR on Nov 25, 1950 in MWD
Workers Union v. Metropolitan Water District, applies even to
those who were employed long after the promulgation of the
award and even if their workers are hired only as temporary,
emergency and casual workers for a definite period and for a
particular project
o authority granted to NAWASA by the President to stagger the
working days of its workers should be limited exclusively to
those specified in the authorization and should not be
extended to others who are not therein specified
o CBA between NAWASA and unions on Dec 28, 1956 and Res No.
29 (1957) of the Grievance Committee, provide that even
those who work outside the sewerage chambers should be
paid 25% additional compensation as "distress pay"
- MR was denied, so NAWASA filed the present petition for review (only
questions of law)
ISSUE
W/N the intervenors are considered "managerial employees"
HELD/RATIO NO
· The intervenors are not managerial employees under RA 2377, hence
they are covered by CA 444. "MANAGERIAL EMPLOYEES" within the
meaning of RA 2377
o Sec. 2. This Act shall apply to all persons employed in any
industry or occupation, whether public or private with the
exception of farm laborers, laborers who prefer to be paid on
piece work basis, managerial employees, outside sales
personnel, domestic servants, persons in the personal service
of another and members of the family of the employer working
for him.
 The term "managerial employee" shall mean either (a) any
person whose primary duty consists of the management of the
establishment in which he is employed or of a customarily
recognized department or subdivision thereof, or (b) ally officer or
member of the managerial staff.
o Explanatory note: he is NOT subject to the rigid observance of
regular office hours. The true worth of his service does NOT
depend so much on the time he spends in office but more on
the results he accomplishes. In fact, he is free to go out of
office anytime
o Philosophy (behind exempting managerial employees from the
8-Hour Labor Law): such workers are not usually employed for
every hour of work; rather, their compensation is determined
considering their special training, experience or knowledge
which requires the exercise of discretion and independent
judgment, or perform work related to management policies or
general business operations along specialized or technical
lines. For these workers it is NOT feasible to provide a fixed
hourly rate of pay or maximum hours of labor
· In the Fair Labor Standards Act of the US (considered by the sponsors
of the present Act in defining the degree of work of a managerial
employee)
o Sec 23 (a) (1), EXECUTIVE EMPLOYEES are EXEMPTED from the
statutory requirements as to minimum wages and overtime
pay
§ EXEMPTION attaches only where it appears that the
employee's primary duty consists of the
management of the establishment or of a customarily
recognized department or subdivision thereof, that
he customarily and regularly directs the work of
other employees therein, that he has the authority
to hire or discharge other employees or that his
suggestions and recommendations as to the hiring or
discharging and as to the advancement and
promotion or any other change of status of other
employees are given particular weight, that he
customarily and, regularly exercises discretionary
powers
o "ADMINISTRATIVE EMPLOYEE" is one who is compensated for
his services at a salary or fee of NOT less than a prescribed sum
per month, and who regularly and directly assists an employee
employed in a bona fide executive or administrative capacity,
where such assistance is nonmanual in nature and requires the
exercise of discretion and independent judgment; or who
performs under only general supervision, responsible non-
manual office or field work, directly related to management
policies or general business operations, along specialized or
technical lines' requiring special training experience, or
knowledge, and the exercise of discretion and independent
judgment
o "PROFESSIONAL" EMPLOYEE is one who is engaged in work
predominantly intellectual and varied in character, and
requires the consistent exercise of discretion and judgment in
its performance and is of such a character that the output
produced cannot be standardized in relation to a given period
of time, and whose hours of work of the same nature as that
performed by non-exempt employees do NOT exceed 20% of
the hours worked in the work week by the non-exempt
employees, EXCEPT where such work is necessarily incident to
work of a professional nature; and which requires, first,
knowledge of an advanced type in a field of science or learning
customarily acquired by a prolonged course or specialized
intellectual instruction and study, or, second, predominantly
original and creative in character in a recognized field of
artistic endeavor
o Executive, administrative and professional workers are NOT
usually employed at hourly wages nor is it feasible in the case
of such employees to provide a fixed hourly rate of pay nor
maximum hours of labor
· Intervenors herein are holding position of responsibility.
o One of them is the Secretary of the Board of Directors. Another
is the private secretary of the general manager. Another is a
public relations officer, and many other chiefs of divisions or
sections and others are supervisors and overseers.
o Their primary duties do not bear any direct relation with the
management of the NAWASA, nor do they participate in the
formulation of its policies nor in the hiring and firing of its
employees. The chiefs of divisions and sections are given ready
policies to execute and standard practices to observe for their
execution. Hence, it concludes, they have little freedom of
action, as their main function is merely to carry out the
company's orders, plans and policies
o they are required to observe working hours and record their
time at work and are not free to come and go to their offices,
nor move about at their own discretion
‘
8. NATIONAL SUGAR REFINERIES CORP v. NLRC
 [G.R. No. 101761. March 24, 1993.]
By: EAY III
Topic: SUPERVISORY EMPLOYEES
Petitioner: NATIONAL SUGAR REFINERIES CORPORATION
Respondent: NATIONAL LABOR RELATIONS COMMISSION and NBSR SUPERVISORY UNION,
(PACIWU) TUCP,
Ponente: REGALADO, J.
FACTS:
1. Petitioner NASUREFCO, a corporation which is fully owned and controlled by the
Government, operates 3 sugar refineries.
2. The Batangas refinery was privatized. Private respondent union represents the
former supervisors of the NASUREFCO Batangas Sugar Refinery.
3. On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all
employees, from rank-and-􏰏le to department heads.
a. The JE Program was designed to rationalized the duties and functions of all
positions, reestablish levels of responsibility, and recognize both wage and
operational structures.
4. As a result, all positions were re-evaluated, and all employees including the members
of respondent union were granted salary adjustments and increases in benefits
commensurate to their actual duties and functions.
5. For about 10 years prior to the JE Program, the members of respondent union were
treated in the same manner as rank-and 􏰏le employees. As such, they used to be
paid overtime, rest day and holiday pay
6. With the implementation of the JE program, adjustments were made.
7. NASUREFCO recognized herein respondent union, which was organized pursuant to
RA6715 allowing supervisory employees to form their own unions, as the bargaining
representative of all the supervisory employees at the NASUREFCO Batangas Sugar
Refinery.
8. 2 years after the implementation of the JE Program,the members of herein
respondent union filed a complainant with the executive labor arbiter for non-
payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of
the Labor Code.
9. LA - 􏰏finding for the members therein respondent union, the labor ruled that the
along span of time during which the bene􏰏ts were being paid to the supervisors has
accused the payment thereof to ripen into contractual obligation;
10. NLRC - affirmed the decision of the labor arbiter on the ground that the members of
respondent union are not managerial employees, as defined under Article 212 (m)
of the Labor Code and, therefore, they are entitled to overtime, rest day and holiday
pay.
11. In this petition, NASUREFCO contends that that the members of respondent union
are members of the managerial staff who are not entitled to overtime, rest day and
holiday pay.
ISSUE: W/N the union members, as supervisory employees, are to be considered as officers or
members of the managerial staff - YES
RATIO:
● We are constrained to agree with petitioner that the union members should be
considered as of􏰏cers and members of the managerial staff and are, therefore,
exempt from the coverage of Article 82. Perforce, they are not entitled to overtime,
rest day and holiday.
● it is apparent that the members of respondent union discharge duties and
responsibilities which ineluctably qualify them as of􏰏cers or members of the
managerial staff, as de􏰏ned in Section 2, Rule I Book III of the aforestated Rules to
Implement the Labor Code, viz.:
o (1) their primary duty consists of the performance of work directly related
to management policies of their employer;
o (2) they customarily and regularly exercise discretion and independent
judgment;
o (3) they regularly and directly assist the managerial employee whose
primary duty consist of the management of a department of the
establishment in which they are employed
o (4) they execute, under general supervision, work along specialized or
technical lines requiring special training, experience, or knowledge;
o (5) they execute, under general supervision, special assignments and tasks;
and
o (6) they do not devote more than 20% of their hours worked in a work-
week to activities which are not directly and clearly related to the
performance of their work hereinbefore described.
● A cursory perusal of the Job Value Contribution Statements of the union members
will readily show that these supervisory employees are under the direct supervision
of their respective department superintendents and that generally they assist the
latter in planning, organizing, staf􏰏ng, directing, controlling communicating and in
making decisions in attaining the company's set goals and objectives. These
supervisory employees are likewise responsible for the effective and efficient
operation of their respective departments. More speci􏰏cally, their duties and
functions include, among others, the following operations whereby the employee:
1) assists the department superintendent in the following:
a) planning of systems and procedures relative to department activities;
b) organizing and scheduling of work activities of the department, which
includes employee shifting scheduled and manning
complement;
c) decision making by providing relevant information data and other
inputs;
d) attaining the company's set goals and objectives by giving his full
support;
e) selecting the appropriate man to handle the job in the department; and
f) preparing annual departmental budget;
2) observes, follows and implements company policies at all times and recommends
disciplinary action on erring subordinates;
3) trains and guides subordinates on how to assume responsibilities and become
more productive;
4) conducts semi-annual performance evaluation of his subordinates and
recommends necessary action for their development/advancement;
5) represents the superintendent or the department when appointed and authorized
by the former;
 6) coordinates and communicates with other inter and intra department supervisors
when necessary;
7) recommends disciplinary actions/promotions;
8) recommends measures to improve work methods, equipment performance,
quality of service and working conditions;
9) sees to it that safety rules and regulations and procedure and are implemented
and followed by all NASUREFCO employees, recommends revisions or
modi􏰏cations to said rules when deemed necessary, and initiates and
prepares reports for any observed abnormality within the refinery;
10) supervises the activities of all personnel under him and goes to it that
instructions to subordinates are properly implemented; and
11) performs other related tasks as may be assigned by his immediate superior.
WHEREFORE, the impugned decision and resolution of respondent National Labor Relations
Commission promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby
ANNULLED and SET ASIDE for having been rendered and adopted with grave abuse of
discretion, and the basic complaint of private respondent union is DISMISSED.
9. Penaranda v. Baganga Plywood Corporation
G.R. No. 159577
May 3, 2006
By: HRTA
Topic: Supervisors are Managerial Employees
Petitioners: Charlito Penaranda
Respondents: Baganga Plywood Corporation (BPC) and Hudson Chua
Ponente: J. Del Castillo
Doctrine: Managerial employees and members of the managerial staff are exempted from the
provisions of the LC on labor standards. Since Penaranda belongs to this class of employees,
he is not entitled to overtime pay and premium pay for working on rest days.
Facts:
· Penaranda was hired by BPC to take charge of the operations and maintenance of its
steam plant boiler. He filed a Complaint for illegal dismissal with money claims with
BPC and the General Mngr. Hudson Chua (Chua) with the NLRC.
· Penaranda through counsel alleged that he was illegally dismissed due to being
terminated without he benefit of due process and valid grounds in accordance with
law. Moreover, he was not paid his overtime(OT) pay, premium pay for working
during holidays/rest days, night shift differentials.
· While BPC alleged that Penaranda’s service was based on Art. 283 of LC. BPC was on
temporary closure due to repair and general maintenance and it applied for
clearance with DOLE to shut down and dismiss employees. Moreover, Penaranda
was given his separation benefits due to his insistence.
· Consequently, BPC partially reopened but Penaranda failed to reapply. Hence,
Penaranda was not terminated from employment much less illegally. He opted to
sever employment when he insisted payment of his separation benefits.
Furthermore, being a managerial employee he is not entitled to overtime pay and
if ever he rendered services beyond the normal hours of work, there was no office
order or authorization for him to do so.
· LA held that there was no illegal dismissal. But it found that Penaranda was entitled
to OT pay, premium pay for working on rest days, and atty's fees.
· NLRC deleted the award of OT pay, premium pay and atty’s fees. It held that he was
not entitled to these awards because he was a managerial employee. CA dismissed
Penaranda’s Petition for Certiorari as he failed to attach pleadings filed before NLRC.
MR was also denied
Issues:
W/N Penaranda is a regular/common employee, hence entitled to monetary benefits (OT pay,
etc). (NO, he is a member of the managerial staff)
Ruling:
Art. 82 of LC exempts managerial employees from the coverage of labor standards. Labor
standards provide the working conditions of employees, including entitlement to overtime pay
and premium pay for working on rest days. Such article also states that managerial employees
are "those whose primary duty consists of the management of the establishment in which they
are employed or of a department or subdivision."
The Implementing Rules of the LC provides the conditions to become managerial employees:
"(1) Their primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof;
"(2) They customarily and regularly direct the work of two or more employees therein;
"(3) They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to the hiring and firing and as to the promotion or any other change
of status of other employees are given particular weight."
While the Court ruled that Penaranda is not a managerial employee, he was however a
member of the managerial staff, which also takes him out of the coverage of labor standards.
Managerial staff are also not not entitled to the law provisions law on labor standards. The
Implementing Rules also define managerial staff and its duties.
"(1) The primary duty consists of the performance of work directly related to management
policies of the employer;
"(2) Customarily and regularly exercise discretion and independent judgment;
"(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of the management of the establishment in which he is employed or subdivision
thereof; or (ii) execute under general supervision work along specialized or technical lines
requiring special training, experience, or knowledge; or (iii) execute under general supervision
special assignments and tasks; and
"(4) who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in
paragraphs (1), (2), and (3) above."

The job description of Penaranda is as follows:
"1. To supply the required and continuous steam to all consuming units at minimum cost.
"2. To supervise, check and monitor manpower workmanship as well as operation of boiler
and accessories.
"3. To evaluate performance of machinery and manpower.
"4. To follow-up supply of waste and other materials for fuel.
"5. To train new employees for effective and safety white working.
"6. Recommend parts and suppliers purchases.
"7. To recommend personnel actions such as: promotion, or disciplinary action.
"8. To check water from the boiler, feedwater and softener, regenerate softener if beyond
hardness limit.
"9. Implement Chemical Dosing.
"10. Perform other task as required by the superior from time to time.
Such enumeration, particularly 1, 2, 3, 5 and 7 illustrates that he was a member of managerial
staff. His duties conform to the definition of a member of a managerial staff under the
Implementing Rules.
He supervised the engineering section of the steam plant boiler. His work involved overseeing
the operation of the machines and the performance of the workers in the engineering section.
This work necessarily required the use of discretion and independent judgment to ensure the
proper functioning of the steam plant boiler. As supervisor, he is deemed a member of the
managerial staff.
Furthermore, Penaranda himself admitted that he was a supervisor. He alleged that he was
the foreman responsible for the operation of the boiler. The term foreman implies that he was
the representative of management over the workers and the operation of the department.
He also showed that he was the supervisor of the steam plant. His classification as supervisors
is further evident from the manner his salary was paid. He belonged to the 10% of respondent's
354 employees who were paid on a monthly basis; the others were paid only on a daily basis.
10. Far East Agricultural Supply v Jimmy Lebatique
G.R. No. 162813
February 12, 2007
----------------------------------------------------------------------------------------------------------------------------
TOPIC: Field Personnel
Petitioner: FAR EAST AGRICULTURAL SUPPLY, INC. and/or ALEXANDER UY
Respondent: JIMMY LEBATIQUE and THE HONORABLE COURT OF APPEALS
Doctrine: “Field personnel” is not merely concerned with the location where the employee
regularly performs his duties but also with the fact that the employee’s performance is
unsupervised by the employer. They are those who regularly perform their duties away from
the principal place of business, and whose actual hours of work in the field cannot be
determined with reasonable certainty. To determine w/n an employee is a field personnel, an
inquiry on the time and performance constantly supervised by the employer must be sought.
FACTS
- Mar 4, 1996-Respondent Jimmy Lebatique was hired by Far East as truck driver.
- Daily wage: P223.50;
- His job was to deliver animal feeds to company’s clients
- Jan 24, 2000 – Lebatique complained of nonpayment of overtime work.
- 4 days ago, he was required to make a 2nd delivery in Novaliches but Manuel Uy,
brother of Far East’s Gen. Manager, and Alexander Uy suspended him for illegal use
of company vehicle.
- He attempted to work the next day but was barred from entering the premises.
Jan 26, 2000 – Lebatique sought help of DOLE Public Assistance and Complaints Unit.
- 2 days later, he got a telegram from petitioners requiring him to report for work.
He went the next day. Alexander then asked him why he was claiming overtime pay.
Lebatique claimed that he had never been paid for OT work since he started working
for the company. He was then fired and told to look for another work.
Mar 20, 2000 – Lebatique filed a complaint for illegal dismissal and nonpayment of overtime
pay.
- LA found Lebatique was illegally dismissed, ordered his reinstatement and
payment of his full back wages, 13th month pay, service incentive leave pay, and OT
pay.
o Total award: P196,659.72
- NLRC reversed LA, dismissed the complaint for lack of merit. It held that
Lebatique was merely suspended. Also, it found that Lebatique was a field
personnel, hence, not entitled to OT pay and service incentive leave pay.
o Lebatique filed an MR – denied
- Lebatique filed a petition for certiorari with the CA. The appellate court reversed
NLRC, saying Lebatique was suspended on Jan. 24, 2000 but was illegally dismissed
on Jan. 29 when Alexander told him to look for another job. Lebatique was not a
field personnel hence entitled to money claims.
o Petitioners moved for reconsideration – denied.
Petitioners’ arguments:
· Lebatique not dismissed, only suspended for a day due to violation of company
rules
· Lebatique was not barred from entering company premises since he never
reported back to work
· Lebatique is estopped from claiming he was illegally dismissed because his
complaint before the DOLE was only for OT pay
· Lebatique, as a driver, is not entitled to OT pay since he is a field personnel whose
time outside the company premises cannot be ascertained. Drivers do not observe
regular working hours as they may report in the morning or afternoon depending on
the production of animal feeds and traffic conditions.
o Lebatique worked less than 8 hours a day
ISSUES
1.) W/N Lebatique was illegally dismissed – YES
2.) [IMPORTANT] W/N Lebatique was a field personnel, not entitled to OT
pay – NO
RULING:
 § In cases of illegal dismissal, the burden is on the employer to prove that the
termination was for a valid cause. Petitioners failed to discharge such burden.
o To constitute abandonment as a just cause for dismissal, there must
be: absence without justifiable reason, and clear intention manifested by
an overt act to sever Employer-employee relationship.
o In the instant case, there was no showing of a clear intention on the
part of respondent to sever Employer-Employee relationship. Petitioners
failed to prove that Lebatique abandoned his job.
o When he was told to look for another job, it was in effect a dismissal.
§ Even assuming he was merely suspended, the records do not show that he was
afforded the opportunity to explain his side.
§ It is very clear that Respondent’s complaint for non-payment of OT that provoked
the management to dismiss him, on the premise that a truck driver is a field
personnel not entitle to OT pay.
o An employee who takes steps to protest his layoff cannot by any stretch
of imagination be said to have abandoned his work and the filing of the
complaint is proof enough of his desire to return to work, thus negating
any suggestion of abandonment.
o Also, his filing of the complaint was well within the prescriptive period
allowed under law as it was filed on the day he was suspended.
2.) [IMPORTANT] W/N Lebatique was a field personnel, not entitled to OT pay – NO
§ “Field personnel” as defined in Article 82 of the Labor Code:
ART. 82. Coverage. — The provisions of this title [Working Conditions and
Rest Periods] shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government employees,
managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who are paid by
results as determined by the Secretary of Labor in appropriate regulations.
xxx xxx xxx
"Field personnel" shall refer to non-agricultural employees who regularly
perform their duties away from the principal place of business or branch
office of the employer and whose actual hours of work in the field cannot
be determined with reasonable certainty.
§ (Auto Bus Transport System, Inc. v. Bautista) “Field personnel” is not merely
concerned with the location where the employee regularly performs his duties but
also with the fact that the employee’s performance is unsupervised by the employer.
o They are those who regularly perform their duties away from the
principal place of business, and whose actual hours of work in the field
cannot be determined with reasonable certainty.
o A question of w/n the employee’s time and performance are constantly
supervised by the employer
§ Applying such to the case, Respondent is NOT a field personnel for the following
reasons:
o Company drivers are directed to deliver the goods at a specified time
and place
o They are not given the discretion to solicit, select and contact
prospective clients
o Far East issued a directive that company drivers should stay at the
client’s premises during truck-ban hours (5AM-9AM and 5PM-9PM).
Petitioners admit that they can report early in the morning or early in the
afternoon to make deliveries
o Drivers are under the control and supervision of management
§ Lebatique à regular employee whose tasks are usually necessary and desirable
to the usual business of the company. He is entitled to the benefits accorded to
regular employees of Far East + OT pay and service incentive leave pay.
§ Lebatique timely filed his claim for service incentive leave pay which was within
the prescriptive period of 3 years from date of termination. However, for his OT pay,
he can only demand for what was withheld for the period within 3 years
preceding(before) the filing of the complaint on March 20, 2000. The Court stated
that the selected time records presented by the petitioners to compute for his OT
pay was insufficient.
11. UNION OF FOLIPRO EMPLOYEES (UFE) v. VIVAR, JR.
GR NO. 79255
20 January 1992
By: Ju
Topic: Field Personnel
Petitioners: Union of Filpro Employees (UFE)
Respondents: Benigno Vivar, Jr., National Labor Relations Commissions and Nestlé Philippines,
Inc.
Ponente: J. Gutierrez, Jr.
DOCTRINE:
Field personnel are evaluated by the result of their work and not by the actual hours of field
work which are hardly susceptible to determination.
FACTS:
• Respondent Filipro, Inc. (now Nestlé Philippines, Inc.) filed with the NLRC a petition for
declaratory relief seeking a ruling on its rights and obligations respecting claims of its
monthly paid employees for holiday pay.
• Both Filipro and the Union of Filipro Employees (UFE) agreed to submit the case for voluntary
arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator.
• Arbitrator Vivar rendered a decision directing Filipro to:
• "pay its monthly paid employees holiday pay pursuant to Article 94 of the Code,
subject only to the exclusions and limitations specified in Article 82 and such other
legal restrictions as are provided for in the Code."
• Filipro filed a motion for clarification seeking, among others, the exclusion of salesmen, sales
representatives, truck drivers, merchandisers and medical representatives (hereinafter
 referred to as sales personnel) from the award of the holiday pay.
• Petitioner UFE answered that their sales personnel are not field personnel and are therefore
entitled to holiday pay.
• The Respondent Arbitrator, however, adjudged that the company's sales personnel are field
personnel and, as such, are not entitled to holiday pay.
• The Petitioner insists that Respondent's sales personnel are not field personnel under Article
82 of the Labor Code. It maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m.
comprises the sales personnel's working hours, which can be determined with reasonable
certainty.
• The Petitioner claims that the fact that these sales personnel are given incentive bonus every
quarter based on their performance is proof that their hours of work can be determined.
ISSUE:
W/N the actual hours of work of Respondent’s sales personnel in the field can be determined
with reasonable certainty.
(NO)
HELD/RATIO :
• The Court finds that in deciding whether or not an employee's actual working hours in the
field can be determined with reasonable certainty, query must be made as to whether or
not such employee's time and performance is constantly supervised by the employer.
• Since the Supervisor of the Day (SOD) schedule of these personnel does not in the least
signify that these sales personnel's time and performance are supervised, it fails to see how
the company can monitor the number of actual hours spent in field work by an employee.
The purpose of this schedule is merely to ensure that the sales personnel are out of the
office not later than 8:00 a.m. and are back in the office not earlier than 4:00 p.m.
• Moreover, the criteria for granting incentive bonus of Respondent’s sales personnel are:
1. attaining or exceeding sales volume based on sales target;
2. good collection performance;
3. proper compliance with good market hygiene;
4. good merchandising work;
5. minimal market returns; and
6. proper truck maintenance.
• The above criteria indicate that these personnel are given incentive bonuses precisely
because of the difficulty in measuring their actual hours of field work. These employees are
evaluated by the result of their work and not by the actual hours of field work which are
hardly susceptible to determination.
• In San Miguel Brewery, Inc. v. Democratic Labor Organization (1963), the Court had occasion
to discuss the nature of the job of a salesman. Citing the case of Jewel Tea Co. v. Williams,
C.C.A. Okla., 118 F. 2d 202, the Court stated:
• “The reasons for excluding an outside salesman are fairly apparent. Such a
salesman, to a greater extent, works individually. There are no restrictions
respecting the time he shall work and he can earn as much or as little, within the
range of his ability, as his ambition dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away from his employer's place of
business, is not subject to the personal supervision of his employer, and his
employer has no way of knowing the number of hours he works per day.”
DISPOSITION:
WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used
in computing holiday pay shall be 251 days. The holiday pay as above directed shall be
computed from October 23, 1984. In all other respects, the order of the respondent arbitrator
is hereby AFFIRMED.
SO ORDERED.
12.Mercidar Fishing Corp v NLRC
GR# 112574
October 8,1998
MJB
Topic: Field Personnel
Petitioners: Mercidar Fishing Corporation represented by President Domingo Naval
Respondents: NLRC and Fermin Agao
Ponente: Mendoza
DOCTRINE:
● Field personnel shall refer to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined with reasonable certainty.
● In deciding whether or not an employee’s actual working hours in the field can be
determined with reasonable certainty, query must be made as to whether or not such
employees’ time and performance is constantly supervised by the employer.
FACTS :
● Private respondent, Fermin Agao, Jr., had been employed as a bodegero or ships
quartermaster on February 12, 1988.
● He filed a complaint against petitioner Mercidar for for illegal dismissal, violation of P.D.
No. 851, and non-payment of five days service incentive leave for 1990.
● Agao alleged:
o That he had been sick and thus allowed to go on leave without pay for one
month;
o That when he reported to work at the end of such period with a health
clearance, he was told to come back another time as he could not be reinstated
immediately;
o That petitioner refused to give him work thereafter;
o That for this reason, private respondent asked for a certificate of employment
from petitioner;
o That Mercidar refused to issue the certificate unless he submitted his
resignation; and
o That since he refused to submit such letter unless he was given separation pay,
Mercidar prevented him from entering the premises.
● Mercidar alleged:
o That it was Agao who actually abandoned his work;
o That the he failed to report for work after his leave had expired and was, in fact,
absent without leave for three months;
o That, nonetheless, it assigned private respondent to another vessel, but the
Agao was left behind;
 o That private respondent asked for a certificate of employment on the pretext
that he was applying to another fishing company; and
o That he refused to get the certificate and resign unless he was given separation
pay.
● LA: ordered Mercidar to reinstate Agao with backwages and, to pay him his 13th month
pay and incentive leave pay for 1990.
● NLRC:
o Dismissed the appeal for lack of merit;
o Dismissed petitioners claim that it cannot be held liable for service incentive
leave pay by fishermen in its employ as the latter supposedly are field personnel
and thus not entitled to such pay under the Labor Code; and
o Denied petitioners motion for reconsideration.
ISSUE:
● Whether fishing crew members, like Agao, can be classified as field personnel under
Article 82 of the Labor Code. - NO
HELD/RATIO:
● Mercidar argues that since Agao’s work is performed away from its principal place of
business, it has no way of verifying his actual hours of work on the vessel.
o It contends that private respondent and other fishermen in its employ should
be classified as field personnel who have no statutory right to service incentive
leave pay.
● Art. 82 of the Labor Code provides:
ART. 82. Coverage. - The provisions of this Title [Working Conditions and Rest
Periods] shall apply to employees in all establishments and undertakings whether for
profit or not, but not to government employees, field personnel, members of the
family of the employer who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who are paid by results as
determined by the Secretary of Labor in appropriate regulations.
..........
Field personnel shall refer to non-agricultural employees who regularly perform
their duties away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be determined with
reasonable certainty.
● The requirement that actual hours of work in the field cannot be determined with
reasonable certainty must be read in conjunction with Rule IV, Book III of the
Implementing Rules which provides:
Rule IV Holidays with Pay
Section 1. Coverage - This rule shall apply to all employees except:
..........
(e) Field personnel and other employees whose time and performance is
unsupervised by the employer xxx
● While contending that such rule added another element not found in the law, the
Mercidar nevertheless attempted to show that its affected members are not covered
by the abovementioned rule.
● The petitioner asserts that the company’s sales personnel are strictly supervised as shown
by the SOD (Supervisor of the Day) schedule and the company circular dated March 15,
1984.
● The Court finds that the aforementioned rule did not add another element to the Labor
Code definition of field personnel.
● The clause whose time and performance is unsupervised by the employer did not amplify
but merely interpreted and expounded the clause whose actual hours of work in the field
cannot be determined with reasonable certainty.
● The former clause is still within the scope and purview of Article 82 which defines field
personnel.
o Hence, in deciding whether or not an employee’s actual working hours in the
field can be determined with reasonable certainty, query must be made as to
whether or not such employees’ time and performance is constantly
supervised by the employer.
● During the entire course of their fishing voyage, fishermen employed by petitioner have
no choice but to remain on board its vessel.
● Although they perform non-agricultural work away from petitioner’s business offices, the
fact remains that throughout the duration of their work they are under the effective
control and supervision of petitioner through the vessels’ patron or master as the NLRC
correctly held.
● Petition Dismissed
13. Dasco v. Philtranco Services Enterprise Inc.
G.R. No. 211141
June 29, 2016
LB
Topic: Field Personnel
Petitioners: HILARIO DASCO, REYMIR PARAFINA, RICHARD PARAFINA, EDILBERTO ANIA,
MICHAEL ADANO, JAIME BOLO, RUBEN E. GULA, ANTONIO CUADERNO and JOVITO CATANGUI
Respondents: PHILTRANCO SERVICE ENTERPRISES, INC./CENTURION SOLANO, Manager
Ponente: Reyes
DOCTRINE:
●
FACTS :
● On various dates from 2006 to 2010, the petitioners were employed by the respondents
as bus drivers and/or conductors with travel routes of Manila (Pasay) to Bicol, Visayas and
Mindanao, and vice versa.
● 4 July 2011: Petitioners filed a case against the respondents PSEI, alleging that -
○ They were already qualified regular employment status since they have been
working with the respondents for several years;
○ They were paid only P404 per round trip which lasts from 2-5 days, without
overtime pay and below the min. wage rate;
○ They cannot be considered as field personnel because their working hours are
controlled by the respondents from dispatching to end point, and their travel
time is monitored and measured by the distance because they are in the
business of servicing passengers where time is of the essence; and
 ○ They had not been given their yearly five-day service incentive leave (SIL) since
the time they were hired by the respondents.
● Respondents asserted that:
○ The petitioners were paid on a fixed salary rate of P0.49 centavos per kilometer
run, or minimum wage, whichever is higher;
○ The petitioners are seasonal EEs since their contracts are for a fixed period and
their employment was dependent on the exigency of the extraordinary public
demand for more buses during peak months of the year; and
○ The petitioners are not entitled to overtime pay and SIL pay because they are
field personnel whose time outside the company cannot be determined with
reasonable certainty since they ply provincial routes and are left alone in the
field unsupervised.
● LA: In favor of respondents but declared petitioners are regular employees.
○ Held that the respondents were able to prove that the petitioners were paid on
a fixed salary of P0.49 per kilometer run, or minimum wage, whichever is higher
○ Also found that the petitioners are not entitled to holiday pay and SIL pay
because they are considered as field personnel
● NLRC: Modified the LA’s decision.
○ Held that the petitioners are not field personnel considering that they ply
specific routes with fixed time schedules determined by the respondents; thus,
they are entitled to minimum wage, SIL pay, and overtime benefits
○ With regard to the respondents' claim that the petitioners have a fixed term
contract, the NLRC concurred with the findings of the LA that the respondents
failed to show any document, such as employment contracts and employment
records, that would show the dates of hiring, as well as the fixed period agreed
upon.
○ MR denied.
● CA: Reversed and set aside the NLRC ruling and reinstated the LA’s decisions.
○ Considered the petitioners as field workers and, on the basis, denied their claim
for benefits.
○ MR of petitioners denied.
● Hence, this appeal by petition for review on certiorari.
ISSUE: Whether the petitioners as bus drivers and/or conductors are field personnel, and thus
entitled to overtime pay and SIL pay.
HELD/RATIO: No. The petition is granted.
● As a general rule, [field personnel] are those whose performance of their job/service is
not supervised by the employer or his representative, the workplace being away from
the principal office and whose hours and days of work cannot be determined with
reasonable certainty; hence, they are paid specific amount for rendering specific service
or performing specific work. If required to be at specific places at specific times,
employees including drivers cannot be said to be field personnel despite the fact that they
are performing work away from the principal office of the employee.
● At this point, it is necessary to stress that the definition of a "field personnel" is not merely
concerned with the location where the employee regularly performs his duties but also
with the fact that the employee's performance is unsupervised by the employer. As
discussed above, field personnel are those who regularly perform their duties away from
the principal place of business of the employer and whose actual hours of work in the
field cannot be determined with reasonable certainty. Thus, in order to conclude whether
an employee is a field employee, it is also necessary to ascertain if actual hours of work
in the field can be determined with reasonable certainty by the employer. In so doing,
an inquiry must be made as to whether or not the employee's time and performance are
constantly supervised by the employer.
● Guided by the following norms, the NLRC properly concluded that the petitioners are not
field personnel to the respondents’ business. Evidently, the petitioners are not field
personnel because:
1. The petitioners, as bus drivers and/or conductors, are directed to transport
their passengers at a specified time and place;
2. They are not given the discretion to select and contract with prospective
passengers;
3. Their actual work hours could be determined with reasonable certainty, as well
as their average trips per month; and
4. The respondents supervised their time and performance of duties.
● In order to monitor their drivers and/or conductors, as well as the passengers and the bus
itself, the bus companies put checkers, who are assigned at tactical places along the travel
routes that are plied by their buses. The drivers and/or conductors are required to be at
the specific bus terminals at a specified time.
● In addition, there are always dispatchers in each and every bus terminal, who supervise
and ensure prompt departure at specified times and arrival at the estimated proper time.
Obviously, these drivers and/or conductors cannot be considered as =eld personnel
because they are under the control and constant supervision of the bus companies while
in the performance of their work.
14 Hisoler v Filipino Travel Center Corp
G.R. 232949 | November 20, 2017 | Shang
Topic: Field Personnel
Petitioner: JOSE V. HISOLER III
Respondents: FILIPINO TRAVEL CENTER CORPORATION/JOHAN HENK VAN WEERDEN, A.K.A.
HANS VAN WEERDEN
Court notice lang so it’s really short
● This Court denied the petition for failure to show that the CA committed erred in
issuing the assailed Decision and Resolution in "G.R. No. 232949 —Jose V. Hisoler III
v. Filipino Travel Center Corporation/Johan Henk Van Weerden, a.k.a. Hans Van
Weerdenas to warrant the exercise of this Court's discretionary appellate
jurisdiction.
● LA, NLRC, and CA found that petitioner was validly dismissed
○ As long as their decision is supported by facts and the evidence, the matter
of evaluating the merits and demerits of the case is left to their sound
discretion.
○ Petitioner, indeed, committed a serious misconduct and violation of
company rules when he allowed other persons to ride with paying
 customers which compromised their safety. An employer cannot be
compelled to retain an employee who is guilty of acts inimical to the
interests of the employer. The dismissal of petitioner who is guilty of such
a serious infraction is, therefore, reasonable.
● NLRC and CA also correctly held that petitioner is a field personnel
○ Under Article 82 of the Labor Code, a field personnel is defined as "non-
agricultural employees who regularly perform their duties away from the
principal place of business or branch office of the employer and whose
actual hours of work in the 􏰏eld cannot be determined with reasonable
certainty." Petitioner insists that he is not a 􏰏eld worker as his hours of
work can be determined with reasonable certainty, claiming that with the
advent of modern technology such as the global positioning system (GPS)
and cellular phone, his work hours and performance as driver were
effectively monitored by his employer.
● Certainly, with the help of petitioner's cellular phone and the company vehicle's GPS,
respondents can monitor the progress of petitioner's trip and location. However, the
definition of a "field personnel" is not merely concerned with the location where
the employee regularly performs his duties but also with the fact that the
employee's performance is unsupervised by the employer.
○ As correctly observed by the NLRC, petitioner's activity remains
unsupervised as he was even able to let unauthorized persons join the tour
without the knowledge of respondents. The CA observed that the hours
spent to the actual 􏰏eld work were left to the control of petitioner.
Obviously, petitioner is not under constant supervision of the company
while in the performance of his work. Consequently, being a field
personnel, petitioner is not entitled to overtime pay, holiday pay, rest day
premium and service incentive leave pay.
15. Ultra Villa Food Haus v. Genistos
G.R. No. 120473
June 23, 1999
By:
Topic: Persons in the Personal Service of Another
Petitioners: Ultra Villa Food Haus
Respondents: Genistos
Ponente: J. Apunan
Doctrine:
Facts:
Private respondent Renato Geniston was employed by petitioner Ultra Villa Food House
and/or its alleged owner Rosie Tio. Private respondent alleged that he was employed as a
"do it all guy" acting as waiter, driver and maintenance man, in said restaurant. During the
elections of May 11, 1992, private respondent acted as Poll Watcher. The counting of votes
lasted until 3:00 p.m. the next day, May 12. Private respondent did not report for work on
both days on account of his poll watching. As a result, his employment was terminated by
petitioner Tio on the ground of abandonment.
Private respondent filed a case of illegal dismissal against petitioners. Petitioner Tio
maintained that private respondent was her personal driver, not an employee of Ultra Villa
Food Haus and denied dismissing private respondent whom she claimed abandoned his
job.
The Labor Arbiter found that private respondent was indeed petitioner's personal driver. The
Labor Arbiter concluded that private respondent, being a personal driver, was not entitled to
overtime pay, premium pay, service incentive leave and 13th month pay.On appeal, the
NLRC reversed the decision of the labor arbiter and ordered the reinstatement of private
respondent and payment of backwages, overtime pay, premium pay for holiday and rest
days, etc. The NLRC also granted private respondent separation pay in lieu of reinstatement
on account of the establishment's closure but denied his prayer for moral, actual and
exemplary damages, and attorney's fees. Petitioner moved for reconsideration but was
denied.
Issues:
1. (Main issue) W/N private respondent was an employee of the Ultra Villa Food Haus
or the personal driver of petitioner (Just a Driver)
2. (Second issue) W/N Whether private respondent was illegally dismissed from
employment. (Yes)
Ruling:
I. THE LABOR ARBITER CORRECTLY RULED THAT PRIVATE RESPONDENT WAS
PETITIONER'S PERSONAL DRIVER AND NOT AN EMPLOYEE OF THE SUBJECT
ESTABLISHMENT. — We find that private respondent was indeed the personal driver of
petitioner, and not an employee of the Ultra Villa Food Haus. There is substantial evidence stable and relatively well paying job as petitioner's family driver to work as an election
to support such conclusion, namely: watcher.

(1) Private respondent's admission during the mandatory conference that he was petitioner's Though the latter may pay more in a day, elections in this country are so far in between that
personal driver. it is unlikely that any person would abandon his job to embark on a career as an election
watcher, the functions of which are seasonal and temporary in nature. Consequently, we do
(2) Copies of the Ultra Villa Food Haus payroll which do not contain private respondent's not find private respondent to have abandoned his job. His dismissal from petitioner's employ
name. being unjust, petitioner is entitled to an indemnity under Article 149 of the Labor Code.
(3) Affidavits of Ultra Villa Food Haus employees attesting that private respondent was never Petitioner likewise concedes that she failed to comply with due process in dismissing private
an employee of said establishment. respondent since private respondent had already abandoned his job. As we have shown
earlier however, petitioner's theory of abandonment has no leg to stand on, and with it, her
(4) Petitioner Tio's undisputed allegation that she works as the branch manager of the CFC
attempts to justify her failure to accord due process must also fall. Accordingly, private
Corporation whose office is located in Mandaue City. This would support the Labor Arbiter's
respondent is ordered to pay private respondent the sum of P1,000.00.
observation that private respondents' position as driver would be "incongruous" with his
functions as a waiter of Ultra Villa Food Haus.
Dispositive :
(5) The Joint Affidavit of the warehouseman and warehouse checker of the CFC Corporation
stating that: Renato Geniston usually drive[s] Mrs. Tio from her residence to the office.
WHEREFORE, the decision of the National Labor Relations Commission is hereby
Thereafter, Mr. Geniston will wait for Mrs. Tio in her car. Most of the time, Renato Geniston
REVERSED and a new one entered declaring:chanrob1es virtual 1aw library
slept in the car of Mrs. Tio and will be awakened only when the latter will leave the office for
(1) Private respondent Renato Geniston, the personal driver of petitioner Rosie Tio, and not
lunch. Mr. Geniston will again drive Mrs. Tio to the office at around 2:00 o'clock in the
an employee of the Ultra Villa Food Haus;
afternoon and thereafter the former will again wait for Mrs. Tio at the latter's car until Mrs.
Tio will again leave the office to make her rounds at our branch office at the downtown area.
(2) The dismissal of private respondent to be without a valid cause and without due process.
In contrast, private respondent has not presented any evidence other than his self-serving
Accordingly, petitioner Rosie Tio is ordered to pay private respondent:chanrob1es virtual
allegation to show that he was employed in the Ultra Villa Food Haus.
1aw library
On this issue, therefore, the evidence weighs heavily in petitioner's favor. The Labor Arbiter
thus correctly ruled that private respondent was petitioner's personal driver and not an (a) Thirteenth Month Pay to be computed in accordance with the Rules and Regulations,
employee of the subject establishment. Accordingly, the terms and conditions of private and the Revised Guidelines, Implementing Presidential Decree No. 851;
respondent's employment are governed by Chapter III, Title III, Book III of the Labor Code
as well as by the pertinent provisions of the Civil Code. (b) Indemnity equal to 15 days of his salary as personal driver at the time of his unjust
dismissal; and
I. PETITIONER IS NOT OBLIGED UNDER THE LAW TO GRANT PRIVATE
RESPONDENT OVERTIME PAY, HOLIDAY PAY, PREMIUM PAY AND (c) Indemnity in the sum of P1,000.00.
SERVICE INCENTIVE LEAVE.
II. RIVATE RESPONDENT IS ENTITLED TO BE INDEMNIFIED FOR HIS UNJUST
DISMISSAL AND FOR PETITIONER'S FAILURE TO COMPLY WITH THE
REQUIREMENTS OF DUE PROCESS IN EFFECTING HIS DISMISSAL.

To constitute abandonment, two requisites must concur: (1) the failure to report to work or
absence without valid or justifiable reason, and (2) a clear intention to sever the employer-
employee relationship as manifested by some overt acts, with the second requisite as the
more determinative factor.

The burden of proving abandonment as a just cause for dismissal is on the employer.
Petitioner failed to discharge this burden. The only evidence adduced by petitioner to prove
abandonment is her affidavit. It is quite unbelievable that private respondent would leave a

16 David v Macasio
GR 195466; Jul 2 2014
Calaguas
Topic: Hours of Work; exemptions; workers paid by result
Petitioner: Ariel L. David, doing business under the name and style “Yiels Hog Dealer”
Respondent: John Macasio
Ponente: Brion, J.
Facts:
1. Macasio filed a complaint before the LA against petitioner for:
a. Non-payment of OT pay, holiday pay, and 13 month pay
b. Payment for moral and exemplary damages, and atty’s fees
c. Payment for service incentive leave (SIL)
2. Macasio alleged that he had been working as a butcher for petitioner since Jan 6 1995
a. That petitioner exercised effective control and supervision over his work
i. Set the work day, reporting time, and hogs to be chopped
ii. As well as the manner by which he was to perform his work
iii. Paid his daily salary of Php700.00 (last increase)
iv. Approved and disapproved his leaves
b. That petitioner owned the hogs delivered for chopping and the work tools as
well as the workplace
c. Petitioner employes about 25 butchers and delivery drivers
3. Petitioner put up the defense that he only began his business in 2005
a. Only 10 EEs
b. Macasio was hired on a pakyaw or task basis – and is not entitled to OT, holiday,
and 13 month pay pursuant to the IRR of the Labor Code
c. Pointed out:
i. Macasio usually starts his work at 10pm and ends at 2am depending
on the volume of work to be done
ii. Was paid Php700.00 per engagement regardless of the number of
hours spent chopping and delivering
iii. Not engaged to report for work nor get paid when no hogs were
delivered
4. Macasio disputed Petitioner’s defenses
a. Provided a certificate of employment – however this only shows that his
employment began in Jan 2000 (not 1995)
b. That a payroll or time record could easily prove that he reported to work
everyday, if only petitioner submitted them in evidence
5. LA dismissed macasio’s complaint
a. Gave credence to David’s claim that he engaged Macasio only on a pakyaw or
task basis
b. Harked on the fact that Php700.00 fixed wage exceeded tha prevailing
minimum wage at that time – which was at Php382.00
6. NLRC confirmed LA’s decision
a. Macasio was not required to observe an 8-hr work schedule to earn the
Php700.00 fixed wage
b. Macasio was performing a non-time work – paid a fixed amount regardless of
the amount of time to complete the work
c. Macasio is not covered by the Labor Standards on OT, Holiday, 13th month, and
SIL pay under the IRR
7. CA partly granted Macasio’s certiorari petition
a. Macasio is entitled to his monetary claims as a tasked basis EE
b. Those not covered by the OT, Holiday, 13th month, SIL pay are those tasked
based EEs who are also “field personnel”
i. Field personnel – one who performs the work away from the office or
place of work, and whose regular work hours cannot be determined
with reasonable certainty
c. Macasio was not a field personnel since he was working at the dealer owned by
petitioner
d. But no damages was awarded
Issue: Whether Macasio was entitled to OT, holiday, 13th month, SIL pay? (Yes, except 13th
month pay)
Held:
Yes, Macasio is entitled to OT, holiday, and SIL pay BUT not 13th month pay. Macasio is entitled
to OT, Holiday, SIL pay since he is not a field personnel BUT he is not entitled to 13th month
pay since he is employed on a task basis. The GR as to the monetary benefits sought by Macasio
in this case is that all EEs are entitled to the same. The XPNs are however provided by the
pertinent Arts in the LC and their pertinent provisions of their IRRs (13th month pay has
separate law and IRR). In relation to this case, Holiday and SIL pay are not given to field
personnel regardless if they are task based (or pakayaw) EEs. In contrast to this, 13th month
pay makes no qualification as to whether the EE is a field personnel or not; as long as said EE
is employed on a task basis, then the same is not entitled to 13th pay.
GR: Holiday and SIL pay provisions cover all EEs
XPN: those EEs who are expressly exempt from said provisions
TITLE I
Working Conditions and Rest Periods
CHAPTER I
Hours of Work
ARTICLE 82. Coverage – the provisions of this Title shall apply to employees in
establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the employer
who are dependent on him for support, domestic helpers, persons in the personal service
of another, and workers who are paid by results as determined by the Secretary of Labor in
appropriate regulations.
As used herein, "managerial employees" refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department or
subdivision thereof, and to other officers or members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.
● XPNs under Art 82:
o Government EEs, managerial EEs, field personnel, members of the family of the
EE who are dependent on him for support, domestic helpers, persons in the
personal service of another, workers who are paid by results as determined by
the SOLE in appropriate regulations
ARTICLE 94. Right to Holiday Pay. —
(a) Every worker shall be paid his regular daily wage during regular holidays, except
in retail and service establishments regularly employing less than ten (10)
workers;
(b) The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate; and
(c) (c) As used in this Article, "holiday" includes: New Year's Day, Maundy Thursday,
Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of
July, the thirtieth of November, the twenty-fifth and thirtieth of December and
the day designated by law for holding a general election.
● XPNs under Art 94 (holiday pay):
o those EEs in retail and service establishments regularly employing less than 10
workers,
● XPNs under the pertinent IRR provision of Art 94:
o field personal, other EEs whose time and performance is unsupervised by the
EE including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof
ARTICLE 95. Right to Service Incentive Leave. —
(a) Every employee who has rendered at least one year of service shall be entitled to
a yearly service incentive leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit herein
provided, those enjoying vacation leave with pay of at least five days and those
employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor and
Employment after considering the viability or financial condition of such
establishment.
(c) The grant of benefit in excess of that provided herein shall not be made a subject
of arbitration or any court or administrative action.
● XPNs under Art 95:
o Those already enjoying the benefit herein provided, those enjoying vacation
leave with pay of at least 5 days an those employed in establishments regularly
employing less than 10 EEs or in establishments exempted from granting this
benefit by the SOLE after considering the viability or financial condition of such
establishment
● XPNs under the pertinent IRR provision of Art 95:
o Field personnel and other employees whose performance is unsupervised by
the employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof.
In interpreting the above provisions in relation to a pakyaw basis employment, it must be
understood that payment of an employee on task or pakyaw basis alone is insufficient to
exclude one from the coverage of SIL and holiday pay.
● They are exempted only if they qualify as field personnel
● This applies to both Holiday and SIL pay
the presence (or absence) of employer supervision as regards the worker's time and
performance is the key:
o if the worker is simply engaged on pakyaw or task basis
▪ then the GR: he is entitled to a holiday pay and SIL pay
▪ XPN: unless exempted from the exceptions specifically provided
under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor
Code.
o Basically, if the worker engaged on pakyaw or task basis also falls within the
meaning of "field personnel" under the law, then he is not entitled to Holiday
or SIL pay
● In this case, Macasio did not fall under the meaning of field personnel
o (1) Macasio regularly performed his duties at David's principal place of business;
o (2) his actual hours of work could be determined with reasonable certainty; and,
o (3) David supervised his time and performance of duties.
o Since Macasio cannot be considered a "field personnel," then he is not
exempted from the grant of holiday, SIL pay even as he was engaged on
"pakyaw" or task basis.
With respect to 13th month pay
● 13th month ifs covered by PD 851
● GR: covers all employees
● XPN: those expressly enumerated to be exempt
● Sec 3 of the IRR of PD 851 enumerates the exemptions from coverage of 13th moth pay
o Included in which are those who:
▪ paid on task basis; and
▪ those who are paid a fixed amount for performing a specific work,
irrespective of the time consumed in the performance thereof
o Note: there is no reference as to being a field personnel
▪ The law did not intend to qualify the exemption as it did with Holiday
and SIL pay
● Clearly Macasio falls under this enumeration
● Thus, Macasio is NOT entitled to 13th month pay
WHEREFORE, in light of these considerations, we hereby PARTIALLY GRANT the petition insofar
as the payment of 13th month pay to respondent is concerned. In all other aspects, we AFFIRM
the decision dated November 22, 2010 and the resolution dated January 31, 2011 of the Court
of Appeals in CA-G.R. SP No. 116003.
17. UNION CARBIDE LABOR UNION v. UNION CARBIDE
GR NO. L-41214
Nov. 13, 1992
BDC
Topic: Management Prerogative
Petitioners: UNION CARBIDE LABOR UNION (NLU)
Respondents: UNION CARBIDE PHILIPPINES, INC. AND THE HON. SECRETARY OF LABOR
Ponente: MELO, J.
FACTS
● Sometime in July 1972, there was a change in the working schedule form Monday-
Friday as contained in the CBA. The night shift were required to work from Sunday
thru Thursday.
o UC has 3 shifts – morning, afternoon and night. Before, the night shift work
from Monday to Saturday. The last working day being Friday for 40hrs a
week.
● In November, they filed a demand to maintain the old working schedule. This
demand was referred to the labor management relation committee and was
discussed.
o It was decided that all night shift operating personnel were allowed to start
their work Monday and on Saturday. This excepted the employees in the
maintenance and preparation crews whose work schedule is presumed to
be maintained from Sunday to Thursday. The work schedule between
management representatives and the alleged officers of the Union (Varias
group) was approved and disseminated to take effect.
● 3 employees, Duro, Torio and Javillonar, did not report for work on Nov. 16, 1972, a
Sunday, since it was not a working day according to the CBA.
● They were then dismissed from employment after an application for clearance to
terminate them premised on willful violation of Company regulations, gross
insubordination and refusal to submit to a company investigation was approved by
SOLE.
● The 3 filed an action contending that change in the working schedule violated CBA,
thus, they cannot be dismissed.
● LA – Reinstatement with backwages.
● NLRC – Added separation pay to the complainants.
ISSUE
WON complainants could be validly dismissed from their employment on the ground of
insubordination for refusing to comply with the new work schedule
HELD/RATIO
Although Article XIX of the CBA provides for the duration of the agreement, which provides:
“This agreement shall become effective on September 1, 1971 and shall remain in full
force and effect without change until August 31, 1974. Unless the parties hereto
agree otherwise, negotiation for renewal, or renewal and modification, or a new
agreement may not be initiated before July 1, 1974."
This does not necessarily mean that the company can no longer change its working schedule,
for Section 2, Article II of the same CBA expressly provides for the right of the management to
direct operations and working force of its business in all respects.
Verily and wisely, management retained the prerogative, whenever exigencies of the service
so require, to change the working hours of its employees. And as long as such prerogative is
exercised in good faith for the advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or
under valid agreements, this Court will uphold such exercise.
Although no serious objections may be offered to the Arbitrator’s conclusion to order
reinstatement with backwages of the complainants, We now refrain from doing so considering
that reinstatement is no longer feasible due to the fact that the controversy started more than
20 years ago aside from the obviously strained relations between the parties.
WHEREFORE, the decision appealed from is hereby AFFIRMED.
18. Sime Darby v. NLRC
G.R. No. 119205 / 15 Apr 1998 / Bellosillo, J.
By: RAD
Topic: Change in work hours; a management prerogative
Petitioner: Sime Darby Pilipinas, Inc.
Respondents: NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY
SALARIED EMPLOYEES ASSOCIATION (ALU-TUCP)
Facts:
● Sime Darby is engaged in the manufacture of automotive tires, tubes and other rubber
products. ALU-TUCP is an association of monthly salaried employees of petitioner at its
Marikina factory.
● Prior to the controversy, all company factory workers in Marikina including members of
private respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on
call" lunch break.
● 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, a change in work schedule:
○ 7:45 A.M. - 4:45 P.M. (Monday to Friday)
○ 7:45 A.M. - 11:45 A.M. (Saturday).
○ Coffee break time will be ten minutes only anytime between:
■ 9:30 A.M. - 10:30 A.M. and
■ 2:30 P.M. - 3:30 P.M.
○ Lunch break will be between:
■ 12:00 NN - 1:00 P.M. (Monday to Friday).
● Since private respondent felt affected adversely by the change in the work schedule and
discontinuance of the 30-minute paid "on call" lunch break, it filed on behalf of its
members a complaint with the LA for unfair labor practice, discrimination and evasion of
liability pursuant to the resolution of this Court in Sime Darby International Tire Co., Inc.
v. NLRC.
● LA dismissed the complaint on the ground that the change constituted a valid exercise of
management prerogative and that the new work schedule, break time and one-hour
lunch break did not have the effect of diminishing the benefits granted to factory workers
as the working time did not exceed 8 hours.
● The Labor Arbiter further held that the factory workers would be unjustly enriched if they
continued to be paid during their lunch break even if they were no longer "on call" or
required to work during the break.
● LA also ruled that the decision in the earlier Sime Darby case was not applicable to the
instant case because the former involved discrimination of certain employees who were
not paid for their 30-minute lunch break while the rest of the factory workers were paid;
hence, this Court ordered that the discriminated employees be similarly paid the
additional compensation for their lunch break.
● The NLRC sustained the LA and dismissed the appeal. Reversed itself upon MR.
● NLRC declared that the new work schedule deprived the employees of the benefits of a
time-honored company practice of providing its employees a 30-minute paid lunch break
resulting in an unjust diminution of company privileges prohibited by Art. 100 of the Labor
Code, as amended.
Issue: Whether the change in work schedule was a valid exercise of management prerogative.
YES.
Ruling:
● The right to fix the work schedules of the employees rests principally on their employer.
● While the old work schedule included a 30-minute paid lunch break, the employees could
be called upon to do jobs during that period as they were "on call." Even if denominated
as lunch break, this period could very well be considered as working time because the
factory employees were required to work if necessary and were paid accordingly for
working.
● With the new work schedule, the employees are now given a one-hour lunch break
without any interruption from their employer. For a full one-hour undisturbed lunch
break, the employees can freely and effectively use this hour not only for eating but also
for their rest and comfort which are conducive to more efficiency and better performance
in their work.
● Since the employees are no longer required to work 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 8 hours without violating the Labor
Code.
● Consequently, it was grave abuse of discretion for public respondent to equate the earlier
Sime Darby case with the facts obtaining in this case. The issue in that case involved the
matter of granting lunch breaks to certain employees while depriving the other
employees of such breaks. This Court affirmed in that case the NLRC's finding that such
act of management was discriminatory and constituted an unfair labor practice.
● As shown by the records, the change effected by management with regard to working
time is made to apply to all factory employees engaged in the same line of work whether
or not they are members of private respondent union. Hence, it cannot be said that the
new scheme adopted by management prejudices the right of private respondent to self-
organization.
● Every business enterprise endeavors to increase its profits. In the process, it may devise
means to attain that goal. 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.
● Thus, management is free to regulate, according to its own discretion and judgment, all
aspects of employment, including hiring, work assignments, working methods, time, place
and manner of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay off workers and discipline,
dismissal and recall of workers.
● Further, management retains the prerogative, whenever exigencies of the service so
require, to change the working hours of its employees. So long as such prerogative is
exercised in good faith for the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or
under valid agreements, this Court will uphold such exercise.
● While the Constitution is committed to the policy of social justice and the protection of
the working class, it should not be supposed that every dispute will be automatically
decided in favor of labor. Management also has rights which, as such, are entitled to
respect and enforcement in the interest of simple fair play.
WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations
Commission dated 29 November 1994 is SET ASIDE and the decision of the Labor Arbiter dated
26 November 1993 dismissing the complaint against petitioner for unfair labor practice is
AFFIRMED.
19 Bisig Mangagawa sa Tryco V NLRC
G.R. No. 1513098
October 15, 2008
By: Euge
Topic: Compressed workweek
Petitioners: BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as Union President,
JOSELITO LARIÑO, VIVENCIO B. BARTE, SATURNINO EGERA and SIMPLICIO AYA-AY
Respondents: NATIONAL LABOR RELATIONS COMMISSION, TRYCO PHARMA CORPORATION,
and/or WILFREDO C. RIVERA,
Ponente: NACHURA, J
Tryco Pharma Corporation, manufacturer of veterinary medicines with principal office in
Caloocan City, and petitioner union Bisig Manggagawa Sa Tryco (BMT), the exclusive bargaining
representative of the rank-and-file employees, signed separate Memoranda of Agreement
providing for a compressed workweek schedule to be implemented in the company.
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.
BMT and Tryco negotiated for the renewal of their CBA but failed to arrive at a new agreement.
Meanwhile, Tryco received a letter from the Bureau of Animal Industry of the Department of
Agriculture reminding the former that its production should be conducted in Bulacan City and
not in Caloocan City. Accordingly, Tryco issued a memo directing petitioners herein who are
members of BMT to report to the plant site in Bulacan.
Contending that the transfer of its members constitutes unfair labor practice, BMT declared a
strike.
Later, petitioner employees filed separate complaints for illegal dismissal and added that the
transfer of petitioners to the Bulacan site is intended to paralyze the union. LA dismissed the
complaint. NLRC and CA affirmed.
Issues:
(1) WON the MOA is not enforceable as it is contrary to law.
(2) Whether the transfer of petitioners amounted to constructive dismissal; and
(3) Whether the transfer of petitioners amounted to unfair labor practice.
Ruling:
(1) NO
The MOA is enforceable and binding against the petitioners. Where it is shown that the person
making the waiver did so voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized
as a valid and binding undertaking.
D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the
employees will derive from the adoption of a compressed workweek scheme, thus:
The compressed workweek scheme was originally conceived for establishments wishing to
save on energy costs, promote greater work efficiency and lower the rate of employee
absenteeism, among others.
Workers favor the scheme considering that it would mean savings on the increasing cost of
transportation fares for at least one (1) day a week; savings on meal and snack expenses;
longer weekends, or an additional 52 off-days a year, that can be devoted to rest, leisure,
family responsibilities, studies and other personal matters, and that it will spare them for at
least another day in a week from certain inconveniences that are the normal incidents of
employment, such as commuting to and from the workplace, travel time spent, exposure to
dust and motor vehicle fumes, dressing up for work, etc.
Thus, under this scheme, the generally observed workweek of six (6) days is shortened to five
(5) days but prolonging the working hours from Monday to Friday without the employer being
obliged for pay overtime premium compensation for work performed in excess of eight (8)
hours on weekdays, in exchange for the benefits abovecited that will accrue to the employees.
Moreover, the adoption of a compressed workweek scheme in the company will help temper
any inconvenience that will be caused the petitioners by their transfer to a farther workplace.
Notably, the MOA complied with the following conditions set by the DOLE, under D.O. No. 21,
to protect the interest of the employees in the implementation of a compressed workweek
scheme:
1. . The employees voluntarily agree to work more than eight (8) hours a day the total in a
week of which shall not exceed their normal weekly hours of work prior to adoption of the
compressed workweek arrangement;
2. There will not be any diminution whatsoever in the weekly or monthly take-home pay and
fringe benefits of the employees;
3. If an employee is permitted or required to work in excess of his normal weekly hours of
work prior to the adoption of the compressed workweek scheme, all such excess hours shall
be considered overtime work and shall be compensated in accordance with the provisions of
the Labor Code or applicable Collective Bargaining Agreement (CBA);
4. Appropriate waivers with respect to overtime premium pay for work performed in excess
of eight (8) hours a day may be devised by the parties to the agreement.
5. The effectivity and implementation of the new working time arrangement shall be by related to the workers’ right to self-organization and to the observance of a CBA. Without that
agreement of the parties. element, the acts, no matter how unfair, are not unfair labor practices.

PESALA v. NLRC, cited by the petitioners, is not applicable to the present case. In that case, an WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated July 24, 2001 and
employment contract provided that the workday consists of 12 hours and the employee will Resolution dated December 20, 2001 are AFFIRMED.
be paid a fixed monthly salary rate that was above the legal minimum wage. However, unlike
the present MOA which specifically states that the employee waives his right to claim overtime
pay for work rendered beyond eight hours, the employment contract in that case was silent
on whether overtime pay was included in the payment of the fixed monthly salary. This
necessitated the interpretation by the Court as to whether the fixed monthly rate provided
under the employment contract included overtime pay.

The Court noted that if the employee is paid only the minimum wage but with overtime pay,
the amount is still greater than the fixed monthly rate as provided in the employment contract.
It, therefore, held that overtime pay was not included in the agreed fixed monthly rate.

Considering that the MOA clearly states that the employee waives the payment of overtime
pay in exchange of a five-day workweek, there is no room for interpretation and its terms
should be implemented as they are written.

NO.
(2) 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.

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. 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. The distance from Caloocan to San Rafael, Bulacan is not
considerably great so as to compel petitioners to seek living accommodations in the area and
prevent them from commuting to Metro Manila daily to be with their families.

(3) We cannot see how the mere transfer of its members can paralyze the union. The union
was not deprived of the membership of the petitioners whose work assignments were only
transferred to another location. More importantly, there was no showing or any indication
that the transfer orders were motivated by an intention to interfere with the petitioners’ right
to organize. Unfair labor practice refers to acts that violate the workers’ right to organize. With
the exception of Article 248(f) of the Labor Code of the Philippines, the prohibited acts are
 8. In his explanation, private respondent asserted that he is entitled to a thirty-minute
meal break; that he immediately left his residence after being informed by the nurse
about the emergency; that the nurse panicked and brought the patient to the hospital
without waiting for him.

9. Finding his explanation unacceptable, the management charged private respondent

with abandonment of post while on duty. In his answer, private respondent denied the
charge.

10. He said that he only left his clinic to have his dinner at home and he returned at 7:51
in the evening upon being informed of the emergency.

11. After evaluating the charge, as well as the answer of private respondent, petitioner
company decided to suspend private respondent for three months.

12. Private respondent filed a complaint for illegal suspension against petitioner. The
20. Philippine Airlines v NLRC Labor Arbiter rendered a decision finding the suspension illegal. Petitioner appealed to
G.R. No. the NLRC.
1999
13. The NLRC dismissed the appeal after finding that the decision of the Labor Arbiter is
supported by the facts on record and the law on the matter. Hence, the present petition
Topic: Regular Meal period (1 Hour)
14. Petitioner argues that being a full-time employee, private respondent is obliged to
stay in the company premises for a minimum of eight (8) hours. Hence, he may not leave
Doctrine: the company premises during such time, even to take his meals.

1. The eight-hour work period does not include the meal break.
2. Employees are not prohibited from going out of the premises as long as they return to their
posts on time. Issue: W/N the act of the private respondent in leaving the company premises during meal
break constitutes abandonment?
Facts:
Held:
1. Private respondent was employed as flight surgeon at petitioner company Philippine
Air Lines (PAL). NO! There was no Abandonment of post.

2. He was assigned at the PAL Medical Clinic at Nichols.

3. On February 17, 1994, at around 7:00 in the evening, private respondent left the
clinic to have his dinner at his residence, which was about five minute-drive away.
4. A few minutes later, the clinic received an emergency call.
5. The nurse on duty called private respondent at home to inform him of the
emergency.
6. When private respondent reached the clinic around 7:50 in the evening, the nurse
on duty had already left with the patient.
● The facts do not support petitioner's allegation that private respondent abandoned
his post on the evening of February 17, 1994.
● Private respondent left the clinic that night only to have his dinner at his house,
which was only a few minutes' drive away from the clinic.
● His whereabouts were known to the nurse on duty so that he could be easily reached
in case of emergency.
● Upon being informed of Mr. Acosta's condition, private respondent immediately left
his home and returned to the clinic.
Articles 83 and 85 of the Labor Code read:

7. The patient died the following day. As a result, the Chief Flight Surgeon required ARTICLE 83. Normal hours of work. — The normal hours of work of any
private respondent to explain why no disciplinary sanction should be taken against him. employee shall not exceed eight (8) hours a day.
 Health personnel in cities and municipalities with a population of at least
one million (1,000,000) or in hospitals and clinics with a bed capacity of at
least one hundred (100) shall hold regular office hours for eight (8) hours
a day, for five (5) days a week, exclusive of time for meals,
except where the exigencies of the service require that such personnel
work for six (6) days or forty-eight (48) hours, in which case they shall be
entitled to an additional compensation of at least thirty per cent (30%) of
their regular wage for work on the sixth day.
For purposes of this Article, "health personnel" shall include: resident
physicians, nurses, nutritionists, dieticians, pharmacists, social workers,
laboratory technicians, paramedical technicians, psychologists, midwives,
attendants and all other hospital or clinic personnel. (emphasis supplied)
ARTICLE 85. Meal periods. — Subject to such regulations as the Secretary
of Labor may prescribe, it shall be the duty of every employer to give his
employees not less than sixty (60) minutes time-off for their regular meals.
The eight-hour work period does not include the meal break. Nowhere in the law
may it be inferred that employees must take their meals within the company
premises. Employees are not prohibited from going out of the premises as long as
they return to their posts on time. Private respondent's act, therefore, of going
home to take his dinner does not constitute abandonment.
ISSUE: Whether the change of work schedule, which management deems necessary to
increase production, constitutes unfair labor practice? No!
HELD:
21 Sime Darby Pilipinas v NLRC
GR 119205 / April 15, 1998 / Madrid
TOPIC: Regular period (one hour)
Petitioners: Sime Darby Pilipinas, Inc
Respondents: NLRC and Sime Darby Pilipinas, Inc Salaried Employees Association (ALU-TCP)
FACTS:
● Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive
tires, tubes and other rubber products. Sime Darby Salaried Employees Association
(ALU- TUCP), private respondent, is an association of monthly salaried employees of
petitioner at its Marikina factory.
● Prior to the present controversy, all company factory workers in Marikina including
members of private respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30-
minute paid "on call" lunch break.
● A new memorandum was issued advising a change in the work schedule of its
employees from 7:45 a.m. — 3:45 p.m. to 7:45 a.m. — 4:45 p.m. with one-hour lunch
break from 12:00 nn to 1:00 p.m. and “coffee break time will be ten minutes only
anytime between: 9:30 A.M. — 10:30 A.M. and 2:30 P.M. — 3:30 P.M.”
● The affected workers filed a complaint with the LA for unfair labor practice,
discrimination and evasion of liability but thid was dismissed on the ground that:
○ the change in the work schedule and the elimination of the 30-minute paid
lunch break of the factory workers constituted a valid exercise of
management prerogative and that the new work schedule, break time and
one-hour lunch break did not have the effect of diminishing the bene􏰏fits
granted to factory workers as the working time did not exceed eight (8)
hours.
○ the factory workers would be unjustly enriched if they continued to be paid
during their lunch break even if they were no longer "on call" or required
to work during the break.
● On appeal before the NLRC, LA decision was affirmed. Upon MR, NLRC reversed its
decision and LA decision
○ The new work schedule deprived the employees of the honored bene􏰏ts
of a time-honored company practice of providing its employees a 30-
minute paid lunch break resulting in an unjust diminution of company
privileges prohibited by Art. 100 of the Labor Code, as amended.
● The right to fi􏰏x the work schedules of the employees rests principally on their
employer. In the instant case petitioner, as the employer, cites as reason for the
adjustment the e􏰏cient conduct of its business operations and its improved
production.
○ While the old work schedule included a 30-minute paid lunch break, the
employees could be called upon to do jobs during that period as they were
"on call."
○ With the new work schedule, the employees are now given a one-hour
lunch break without any interruption from their employer. For a full one-
hour undisturbed lunch break, the employees can freely and effectively
use this hour not only for eating but also for their rest and comfort which
are conducive to more efficiency and better performance in their work.
○ Since the employees are no longer required to work 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. Besides, the new schedule applies to all
employees in the factory similarly situated whether they are union members or not.
 ● As shown by the records, the change effected by management with regard to
working time is made to apply to all factory employees engaged in the same line of
work whether or not they are members of private respondent union. Hence, it
cannot be said that the new scheme adopted by management prejudices the right
of private respondent to self-organization.
● Management is free to regulate, according to its own discretion and judgment, all
aspects of employment, including hiring, work assignments, working methods, time,
place and manner of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay off of workers and
discipline, dismissal and recall of workers.
● Further, management retains the prerogative, whenever exigencies of the service so
require, to change the working hours of its employees. So long as such prerogative
is exercised in good faith for the advancement of the employer's interest and not for
the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold such exercise.
22. Katolec Philippines Labor Union v. Katolec Philippines Corporation
G.R. No. 235667. August 13, 2018(NOTICE)
Topic: Shorter meal period
Petitioner: Katolec Philippines Corporation Labor Union-Philippine Metalworkers Alliance
Respondent: Katolec Philippines Corporation
Doctrine: One-hour work period is mandatory except a.) in the cases mentioned in Sec. 7,
Rule I, Book III of the Omnibus Rules Meal and Rest period, and b.) when the parties
voluntarily agreed to a stipulation not contrary to the labor code
FACTS
Previously, the Court of Appeals affirmed the Department of Labor and Employment Decision
that the shortened meal period voluntarily agreed upon by respondent and its employees is
not compensable under the Labor Code and its Omnibus Rules and Regulations.
Issue: Whether or not the agreement stipulating that a meal period less than hour is not
compensable is valid
Held:: Yes. The governing rule is Section 7, Rule I, Book III of the Omnibus Rules, which states,
to wit:
Sec. 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex,
not less than one (1) hour time-off for regular meals, except in the following cases when a
meal period of not less than twenty (20) minutes may be given by the employer provided
that such shorter meal period is credited as compensable hours worked of the employee:
(a) Where the work is non-manual work in nature or does not involve strenuous physical
exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day;
(c) In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Under this rule, the shortened meal period is compensable when one of the four instances is
present. In this case, however, there is no showing that any of these instances obtains. The
CA is correct in ruling that the rules do not bar the parties from entering into a voluntary
agreement which, when taken as a whole, complies with the provisions of the Labor Code, as
in this case. The reasoning is all the more sensible considering that under the facts of this
case, the CA made a finding that the agreement was even more favorable to the employees
because the compensable 10-minute morning and afternoon breaks will give them more
time to rest.
WHEREFORE, the petition is DENIED. The Court of Appeals' Decision dated June 27, 2017 and
Resolution dated November 16, 2017 in CA-G.R. SP No. 145249 are AFFIRMED.
23. Arica vs NLRC
GR NO. 78210
Feb. 28, 1989
By; DPA
Topic: Waiting Time
Petitioners: Teofilo Arica et. al.
Respondents: NLRC & Standard Fruit Corp.
FACTS:
- Petitioners Teofilo Arica et al filed a complaint against Standard Fruits Corporation
(STANFILCO) Philippines for allegedly not paying the workers for their assembly time which
takes place every work day from 5:30am to 6am.
- The assembly time consists of the following activities:
1. Roll call of the workers;
2. Getting their assignments from the foreman;
3. Filling out the Laborer’s Daily Accomplishment Report;
4. Getting tools and equipments from the stockroom; and
5. Going to the field to work.
- They contended that these activities are necessarily for private respondent’s benefit
- The private respondent averred that the thirty-minute assembly time has been a long time
company practice, thus, not considered as waiting time.
- The LA dismissed the complaint. The LA agreed that the the thirty-minute assembly time long
practiced cannot be considered waiting time or work time and, therefore, not compensable.
- The NLRC upheld the decision of the LA for the same reason.
ISSUE:
W/N the 30-minute activity of the petitioners before the scheduled working time is
compensable under the Labor Code.
HELD/RATIO: NO
- The thirty minute assembly time long practiced and institutionalized by mutual consent of
the parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be
considered as ‘waiting time’ within the purview of Section 5, Rule I, Book III of the Rules and
Regulations Implementing the Labor Code.
- The thirty (30)-minute assembly is a deeply-rooted, routinary practice of the employees, and
the proceedings attendant thereto are not infected with complexities as to deprive the
workers the time to attend to other personal pursuits. In short, they are not subject to the
absolute control of the company during this period, otherwise, their failure to report in the
assembly time would justify the company to impose disciplinary measures.
- Furthermore, their houses are situated right on the area where the farm are located, such
that after the roll call, which does not necessarily require the personal presence, they can go
back to their houses to attend to some chores. In short, they are not subject to the absolute
control of the company during this period.
24. Union of Sual Power Plant vs Team Sual
GR 215188
PM
Facts:
● Petitioners Rey J. Bual (Bual) and Ernesto G. Cardona, Sr. (Cardona), represented by
petitioner Union of Sual Power Plant Employees (USPPE), were regular employees of
respondent Team Sual Corporation (TSC), a corporation engaged in the business of
providing electric power. They were both assigned as scaffolders in the Maintenance
Department under Supervisor Joseleo E. Vicaldo (Vicaldo).
● On July 21,2008 TSC issued Station Standing Order with regard to the fact that the
Company shall compensate an employee accordingly for on-call and call-out work
rendered beyond regular work hours
● On December 20, 2011, Vicaldo entered into an agreement with Bual and Cardona,
specifying the following terms:
o It was agreed that R. Bual and E. Cardona will alternate monthly during call out,
this will start on January 1, 2012. Rey will be on call out in the month of January,
March, May, July, September and November, while Erning will be on call out in
the month of February, April, June, August, October and December. The
meaning of Call out is that you are being called at night to work without
notifying you earlier in the day. (Unscheduled or Emergency Call)
o Supervisor will coordinate with transport to fetch the scaffolder at their
residence during call-out. (Incoming and Outgoing).
o Inform co supervisor regarding our agreement during call out. Scaffolder on
duty for call out shall activate his cell phone 24 hours.
o There shall be one regular scaffolder on duty during regular time whenthere is
a call out at night.
o If ever that you have a commitment or sick and you are on assigned call out for
the month, inform supervisor and co scaffolder regarding this before hand. Co
scaffolder shall be the duty call out."
● On July 9, 2013, Bual and Cardona brought the matter of their agreement to the USPPE
claiming that they should have been paid for their waiting time during their duty for the
call-out. They sought USPPE's assistance to le a complaint against TSC for non-
compensation of on-call services for more than one and a half years.
● USPPE then referred the complaint to the Grievance Machinery as provided for in the CBA
for non-payment of overtime pay for allegedly working on call from Jan 1 2012 to July 15
2013. Bual claimed 5002 hours of overtime pay for Bual. (1.295M) and 4636 hours for
Cardona (1.13m)
o Parties failed to reach an agreement and it was brought before the National
Conciliation and Mediation Board
● Office of the Voluntary Arbitrator (OVA) found Bual and Cardona's claims without factual
and legal basis. It did not find anything to support their claim that they were deprived of
their time to move freely and far away from their respective places of residence and in
their claim that they were con ned to the four corners of their houses waiting for, and
expecting anytime, a call for their needed services at the Plant, which amounted to
"house con nement or house arrest."
● CA also dismissed the case. No evidence to support their point that they were deprived
of their free time while on call
Issue: Whether petitioners are to be considered “on-call (NO)
Held:
There was no showing that they were deprived of their time to move freely far away from
their respective place of residence.
Waiting time spent by the employee shall be considered as working time if waiting is an integral
part of his work or the employee is required or engaged by the employer to wait. An employee
who is required to remain on call in the employer's premises or so close thereto that he cannot
use the time effectively and gainfully for his own purpose, shall be considered as working while
on call. Here, as aptly pointed out by respondent, even if Bual and Cardona were on call, they
were not deprived of the time to attend to their personal pursuits; their physical presence
were not required in TSC's premises; and were not subjected to the absolute control of TSC
during the period they were on call, such that their failure to report would justify the TSC to
impose disciplinary measures. Thus, such time cannot be considered as compensable waiting
time, notwithstanding the fact that they were required to activate their mobile phones 24
hours
Contract clearly defined what the On call and Call-out are. In this case, petioners had the
burden of proving that they were on-call employees. They were not able to prove such.
25. University of Pangasinan Faculty Union v. University of Pangasinan and National Labor
Relations Commission
G.R. No. L-63122. February 20, 1984
Jared
Topic: Inactive due to work interruptions
Petitioners: University of Pangasinan Faculty Union
Respondents: University of Pangasinan and National Labor Relations Commission
Ponente: GUTIERREZ, JR., J.
Doctrine:
The "No work, no pay" principle does not apply in the instant case. These semestral breaks are
in the nature of work interruptions beyond the employees’ control. The duration of the
semestral break varies from year to year dependent on a variety of circumstances affecting at
times only the private respondent but at other times all educational institutions in the country.
As such, these breaks cannot be considered as absences within the meaning of the law for
which deductions may be made from monthly allowances. The employee faculty members
received their regular salaries during this period. It is clear from the aforequoted provision of
law that it contemplates a "no work" situation where the employees voluntarily absent
themselves.
FACTS:
1) Petitioner University of Pangasinan Faculty Union is a labor union composed of faculty
members of the respondent University of Pangasinan, an educational institution duly
organized and existing by virtue of the laws of the Philippines.
2) Th Petitioner University of Pangasinan Faculty Union filed a complaint against the
University of Pangasinan with the Arbitration Branch of the NLRC- Dagupan City seeking:
(a) the payment of Emergency Cost of Living Allowances (ECOLA) for November 7
to December 5, 1981, a semestral break;
(b) salary increases from the 60% of the incremental proceeds of increased tuition
fees; and
(c) payment of salaries for suspended extra loads.
3) The Petitioner Members of University of Pangasinan Faculty Union are full-time
professors, instructors, and teachers of respondent University.
- The teachers in the college level teach for a normal duration of 10 months a
school year, divided into 2 semesters of 5 months each, excluding the 2 months
summer vacation.
- These teachers are paid their salaries on a regular monthly basis.
4) During the semestral break (Nov. 7- Dec. 5, 1981), Petitioner Members were not paid
their ECOLA.
- The respondent University of Pangasinan 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.
5) During the same school year (1981-1982), the respondent University of Pangasinan was
authorized by the Ministry of Education and Culture to collect, from its students a 15%
increase of tuition fees.
- Petitioner Members demanded a salary increase effective the first semester of
said schoolyear to be taken from the 60% percent incremental proceeds of the said
increased tuition fees as mandated by the PD 451. Private respondent refused.
ISSUES: W/N petitioner members of University of Pangasinan Faculty Union are entitled to
Emergency Cost of Living Allowances (ECOLA) during the semestral break? YES.
RULING:
Yes. According to various Presidential Decrees on ECOLAs
“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 . . .”; 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 petitioner’s members are full-time employees receiving their monthly salaries irrespective
of the number of working days or teaching hours in a month. However, they find themselves
in a situation where they are forced to go on leave during semestral breaks.
These semestral breaks are in the nature of work interruptions beyond the employees’ control.
As such, these breaks cannot be considered as absences within the meaning of the law for
which deductions may be made from monthly allowances.
The “No work, no pay” principle does not apply in the instant case. The petitioner’s members
received their regular salaries during this period. It is clear from the provision of law that it
contemplates a “no work” situation where the employees voluntarily absent themselves.
Petitioners, in the case at bar, do not voluntarily 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.
The intention of the law is to grant ECOLA upon the payment of basic wages. Hence, we have
the principle of “No pay, no ECOLA” the converse of which finds application in the case at bar.
Petitioners cannot be considered to be on leave without pay so as not to be entitled to ECOLA,
for, as earlier stated, the petitioners were paid their wages in full for the months of November
and December of 1981, notwithstanding the intervening semestral break.
Although said to be on forced leave, professors and teachers are, nevertheless, burdened with
the task of working during a period of time supposedly available for rest and private matters.
There are papers to correct, students to evaluate, deadlines to meet, and periods within which
to submit grading reports.
Although they may be considered by the respondent University of Pangasinan to be on leave,
the semestal break could not be used effectively for the teacher’s own purposes for the nature
of a teacher’s job imposes upon him further duties which must be done during the said period
of time.
Arduous preparation is necessary for the delicate task of educating our children. Teaching
involves not only an application of skill and an imparting of knowledge, but a responsibility
which entails self dedication and sacrifice. It would be unfair for the private respondent to
consider these teachers as employees on leave without pay to suit its purposes and, yet, in the
meantime, continue availing of their services as they prepare for the next semester or
complete all of the last semester’s requirements.
Thus, the semestral break may also be considered as “hours worked.” For this, the teachers
are paid regular salaries and, for this, they should be entitled to ECOLA. The purpose of the law
is to augment the income of employees to enable them to cope with the harsh living conditions
brought about by inflation; and to protect employees and their wages against the ravages
brought by these conditions
OTHER ISSUE:
W/N 60% of the incremental proceeds of increased tuition fees shall be devoted exclusively to
salary increase? NO.
2. With regard to the second issue, under Section 3 of Presidential Decree 451,
“no increase in tuition or other school fees or charges shall be approved unless 60% 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: Provided, That in no case
shall the return to investments exceed twelve (12%) per centum of the incremental proceeds;
. . .”
Such allowances must be taken in resources of the school not derived from tuition fees.
If the school happen to have no other resources to grant allowances and benefits, either
mandated by law or secured by collective bargaining, such allowances and benefits should be
charged against the return to investments referred.
The law is clear. The 60% incremental proceeds from the tuition increase are to be devoted
entirely to wage or salary increases which means increases in basic salary.
The law cannot be construed to include allowances which are benefits over and above the
basic salaries of the employees. To charge such benefits to the 60% incremental proceeds
would be to reduce the increase in basic salary provided by law.
Law provides that 60% of tuition fee increase should go to wage increases and 40% to
institutional developments, student assistance, extension services, and return on investments.
Framers of the law intended this portion (return on investments) of the increases in tuition
fees to be a general fund to cover up for the university’s miscellaneous expenses.
26. DURABUILT RECAPPING PLANT & COMPANY v. NLRC
GR. NO. 76746 / July 27, 1987
Bea
Topics: LABOR I – Labor Standards; Hours of Work; Specific Rules; Inactive due to work
interruptions
Petitioners: DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO, GENERAL
MANAGER
Respondents: NATIONAL LABOR RELATIONS COMMISSION, HON. COMM. RICARDO C. CASTRO,
HON. ARBITER AMELIA M. GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT and
REYNALDO BODEGAS
Ponente: GUTIERREZ, JR., J
FACTS:
● On July 11, 1983, a complaint for illegal dismissal was filed by private respondent
Reynaldo Bodegas, against petitioner Durabuilt, a tire recapping company.
● LA ruled in favor of Bodegas. Durabuilt was ordered to reinstate Bodegas to his
former position with full backwages, from the time he was terminated up to the time
he is actually reinstated, without loss of seniority rights and benefits accruing to him.
● The petitioners failed to file a seasonable appeal and entry of final judgment was
made on July 8, 1985.
● On August 8, 1985, the Acting Chief of Research and Information and the Corporation
Auditing Examiner of the then Ministry of Labor and Employment submitted a
computation of backwages, ECOLA, 13th month pay, sick and vacation leave benefits
in favor of Reynaldo Bodegas in the total amount of P24,316.38.
● Durabuilt filed its opposition to the computation on the ground that it contemplated
a straight computation of 26 working days in one month when the period covered
by the computation was intermittently interrupted due to frequent brownouts and
machine trouble and that respondent Bodegas had only a total of 250.75 days of
attendance in 1982 due to absences. According to the petitioner, Bodegas is entitled
only to the amount of P3,834.05 broken down as follows: salaries — P1,993.00;
ECOLA-P1,433.50, and 13th month pay — P407.55.
● LA denied the opposition to the computation. On appeal, NLRC affirmed the order
of LA.
● Hence, this instant appeal via certiorari.
● Durabuilt concedes that respondent was illegally dismissed and is willing to pay
backwages. However, the petitioner 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.
ISSUE: Whether the backwages of the illegally dismissed employees were properly computed?
HELD: No. Durabuilt computation was the correct one.
● Backwages, in general, are granted on grounds of equity for earnings which a worker
or employee has lost due to his dismissal from work. The general principle is that an
employee is entitled to receive as backwages all the amounts he may have lost
starting from the date of his dismissal up to the time of his reinstatement.
● There has been an established a policy fixing the amount of backwages to a just and
reasonable level without qualification or deduction. That is to fix the amount of
backwages without qualification or deduction simply means that the workers are to
be paid their backwages fixed as of the time of their dismissal or strike without
deduction for their earnings elsewhere during their lay-off and without qualification
of their backwages as thus fixed; i.e. unqualified by any wage increases or other
benefits that may have been received by their co-workers who were not dismissed
or did not go on strike.
● The principle is justified "as a realistic, reasonable and mutually beneficial solution
for it relieves the employees from proving their earnings during their lay-offs and the
employer from submitting counterproofs.
● The age-old rule governing the relation between labor and capital, or management
and employee of a "fair day's wage for a fair day's labor" remains as the basic factor
in determining employees' wages, and for that matter backwages. If there is no work
performed by the employee there can be no wage or pay unless, of course, the
laborer was able, willing and ready to work but was illegally locked out, or
suspended.
● From the indubitable facts on record, it appears that petitioners have valid reasons
to claim that certain days should not be considered days worked for purposes of
computing private respondent's backwages since their 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.
● 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.
● Petitioners heeding the government's call, participated in the VLCP as indicated in
their statement of conformity dated November 23, 1982. Thus, beginning March
21, 1983 and every Wednesday thereafter, petitioner's business was not in actual
operation. No less than the former Minister of Trade and Industry expressed his
gratitude to petitioners for participating in the VLCP. Petitioners substantiated claim
therefore, that the days during which they were not in operation due to the VLCP
should be excluded in the number of days worked for purposes of computing private
respondents backwages stands reasonable and should have been considered by the
corporation auditing examiner.
Moreover, as early as May 1978, the Ministry of Labor and Employment, thru Policy
Instruction No. 36, has said 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 electrical power interruptions, petitioners business was not
in operation. This was never disputed by private respondent.
● Petitioners' claim that the period (December 1983) during which they effected
retrenchment of workers owing to economic crisis then prevailing likewise appears
plausible. There is substantial evidence consisting of reports to MOLE and SSS
showing that petitioners had laid off workers due to lack of raw materials. The
petitioners payrolls submitted to support their objection to computation indicate
that the number of working days was reduced from the normal weekly six working
days to four working days for a great number of petitioners' workers. Obviously,
private respondent could not have been among those laid off, as at that time he was
already dismissed by petitioner.
 ● Where the failure of workers to work was not due to the employer's fault, the
burden of economic loss suffered by the employees should not be shifted to the
employer. Each party must bear his own loss.
● To allow payment of backwages of P24,316.68 as ordered by public respondents
instead of P3,834.16 as petitioners claim and which appears to be just and
reasonable under the circumstances of this case would not only be unconscionable
but would be grossly unfair to other employees who were not paid when petitioners'
business was not in operation.

● Indeed, it would neither be fair nor just to allow respondent to recover something
he has not earned and could not have earned and to further penalize the petitioner
company over and above the losses it had suffered due to lack of raw materials and
the energy-saving programs of the government. The private respondent cannot be
allowed to enrich himself at the expense of the petitioner company. 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.
● Finally, what strengthens petitioners claim for mitigated liability is their evident good
faith as manifested by their reinstatement of private respondent while the case for
illegal dismissal was still pending and their willingness to pay backwages. While it is
true that as a general rule order of reinstatement carries with it an award of
backwages (Art. 280, Labor Code) this Honorable Court did not only mitigate but
absolved employers from liability of backwages where good faith is evident. There is
no indication that private respondent was a 'victim of arbitrary and high handed
action.

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The order of the
Labor Arbiter, Amelia M. Guloy in NLRC Case No. NCR-7-3162083, dated October 23, 1985, as
affirmed by the NLRC is SET ASIDE. The petitioner is ordered to pay private respondent his
backwages from the time he was terminated up to the time he was actually reinstated
computed on the basis of the number of days when petitioner's business was in actual
operation. The number of days where no work was required and could be done by petitioner's
employees on account of shutdowns due to electrical power interruptions, machine repair,
and lack of raw materials are not considered hours worked for purposes of computing the
petitioner's obligation to respondent employee. In no case shall the award exceed three
year's backpay as above computed. SO ORDERED.