Labor Law 1 Disini: 213 SCRA 621 GUTIERREZ JR September 4, 1992

Labor Law 1 A2010 - 173 - Disini
PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY - Generally, since petitioner is a GOCC with a special charter, it
is under the scope of the civil service. However, the guards are
V NLRC
not employees of PFDA. Since no EER, can’t invoke jurisdiction
213 SCRA 621 of Civil Service Commission. The contract entered was merely
GUTIERREZ JR; September 4, 1992 job contracting, PFDA being an indirect employer. Therefore,
under NLRC.
NATURE 2. YES
PETITION to review the resolutions of the National Labor Ratio A decision on the merits is proper where the issues raised
Relations Commission by the parties did not involve intricate questions of law.
Reasoning
FACTS - The Wage Orders are statutory and mandatory and can not be
- Petitioner, PFDA is a GOCC created by PD977. waived. The petitioner can not escape liability since the law
- November 1, 1984, Wage Order No. 6 was already in effect. provides the joint and solidary liability of the principal and the
After bidding, Odin Security Agency (Odin) and PFDA entered contractor for the protection of the laborers. There can be no
into a Security Services Contract for the Iloilo Fishing Port question that the security guards are entitled to wage
Complex on November 11, 1985. The compensation to be paid adjustments. The computation of the amount due to each
for the security guards would supposedly include, among individual guard can be made during the execution of the
others, the minimum wage based on Wage Order No. 5 (NOTE: decision where hearings can be held. (See Section 3, Rule VIII of
not based on the latest Wage Order, which was already in effect the New Rules of Procedure of the NLRC)
1 yr before the contract was entered into). 3. ESTOPPED FROM QUESTIONING VALIDITY
- On October 24, 1987, during the effectivity of the said Security Reasoning
Agreement, Odin requested PFDA to adjust the contract rate in - Cannot question validity on the ground that it did not comply
accordance with Wage Order No. 6. Among the important with the bidding requirements set by law. Undeniably, services
provisions in the said Order was that the increases in the were rendered already and the petitioner benefitted from said
minimum wage and allowance rates shall be borne by the contract for two (2) years now.
principal/client and the contracts shall be deemed amended 4. YES. But Odin would pay first, subject to reimbursement of ½
accordingly (Sec9). The Security Services Contract provided for from PFDA.
an automatic escalation of the rate per guard in case of wage Ratio In job contracting, the petitioner as principal is jointly and
increase. The request for adjustment was made further on two severally liable with the contractor for the payment of unpaid
more occasions but were ignored by PFDA. So, Odin filed a wages. The Statutory basis for the joint and several liability is
complaint for unpaid amound of re-adjustment rate under Wage set forth in Articles 107, and 109 in relation to Article 106 of the
Order No. 6 together with wage salary differentials from the Labor Code.
integration of the COLA under Wage Order No. 1, 2, 3, and 5 - Eagle Security vs. NLRC (explained interpretation of
pursuant to EO 178 plus P25k as atty’s fees and cost of wage order): If explicitly say that payment of the increase are
litigation. PFDA filed a Motion to Dismiss (no jurisdiction, “to be borne” by the principal or client, doesn’t mean that
security guards no legal personality, if ever they have, action principal would DIRECTLY pay the security guards the wage and
involves interpretation of contract – Labor Arbiter has no allowance because NO PRIVITY of CONTRACT between them.
authority) Security guards’ contractual relationship is with their immediate
- LA: dismissed complaint: PFDA under scope and jurisdiction of employer (Security Agency). Security agency tasked as an
the Civil Service Commission – Odin appealed to the NLRC employer with the payment of the wages. In order for the
- NLRC: set aside order, entered decision in favor of Odin – MFR security agency to comply with the new wage order and
filed by PFDA (due process violation, resolution granting relief allowance rates, amendment of the contract between security
without legal basis; if with legal basis for the award, stipulation agency and the principal as to the consideration to cover the
allowing an increase of wage rate void ab initio) – MFR denied service contractor the payment of the increases mandated
Petitioner’s contention should be done. In the end, therefore, ultimate liability for
(1) The National Labor Relations Commission failed to ob serve the payment of the increases rests with the principal."
due process Reasoning
(2) Granting the award of the National Labor Relations - As was held in the stated case, the security guard’s direct
Commission is valid, reliefs granted are not legal recourse is from their direct employer – Odin. Also Odin is
(3) Assuming the award complies with the requirements of due equally guilty when it entered into the contract with PFDA
process, the National Labor Relations Commission erred when it without considering Wage Order No. 6, which was already in
failed to declare the contract for security services void. effect on the date when they entered into the bidding for the
security contract.
ISSUES - on the fixing of contract rate of security agencies by
1. WON NLRC had jurisdiction over the case the Philippine Association of Detective and Protective
2. WON due process was observed Agency Operators: no moment. Their memo was not
3. WON the contract for security services void necessary to make Wage Order No. 6 effective upon Odin; it
4. WON PFDA should carry the burden of the wage increase was merely an internal agreement among the operators to set
the ceiling of the contract rates. This was aimed to curb the
HELD practice of security agencies which were in cutthroat
1. YES competition to request for wage adjustments after proposals
Ratio Notwithstanding that the petitioner is a government were accepted in good faith to the prejudice of the parties.
agency, its liabilities, which are joint and solidary with that of -The private respondent is the employer of the security guards
the contractor, are provided in Articles 106, 107 and 109 of the and as the employer, it is charged with knowledge of labor laws
Labor Code. This places the petitioner's liabilities under the and the adequacy of the compensation that it demands for
scope of the NLRC. Moreover, Book Three, Title 11 on Wages contractual services is its principal concern and not any other's.
specifically provides that the term "employer" includes any By filing the complaint in its own behalf and in behalf of the
person acting directly or indirectly in the interest of an security guards, the private respondent wishes to exculpate
employer in relation to an employee and shall include the itself from liability on the strength of the ruling in the Eagle
Government and all its branches, subdivisions and case that the ultimate liability rests with the principal.
instrumentalities, all government-owned or controlled Disposition the questioned resolutions of the National Labor
corporations and institutions as well as non-profit private Relations Commission are hereby AFFIRMED with the
institutions, or organizations (Art. 97 [b], Labor Code..) modification that both the petitioner and the private respondent
Reasoning are ORDERED to pay jointly and severally the unpaid wage
differentials under Wage O rder No. 6 without prejudice to the employee's wages without satisfying the following: (a) proof
right of reimbursement for one-half of the amount which either that such facilities are customarily furnished by the trade; (b)
the petitioner or the private respondent may have to pay to the the provision of deductible facilities is voluntarily accepted in
security guards writing by the employee; and (c) the facilities are charged at
fair and reasonable value. The records are clear that
petitioners failed to comply with these requirements. There
CHAVEZ V NLRC
was no proof of respondents’ written authorization. Indeed, the
[PAGE 59] Labor Arbiter found that while the respondents admitted that
they were given meals and merienda, the quality of food served
MAYON HOTEL AND RESTAURANTS V ADANA to them was not what was provided for in the Facility Evaluation
458 SCRA 609 Orders and it was only when they filed the cases that they came
to know of this supposed Facility Evaluation Orders. Petitioner
PUNO; May 16, 2005 Josefa Po Lam herself admitted that she did not inform the
respondents of the facilities she had applied for.
NATURE - More important, we note the uncontroverted testimony of
This is a petition for certiorari to reverse and set aside the respondents on record that they were required to eat in the
Decision issued by the Court of Appeals and the Resolution hotel and restaurant so that they will not go home and there is
denying petitioners’ motion for reconsideration. no interruption in the services of Mayon Hotel. Food or snacks
or other convenience provided by the employers are deemed as
FACTS supplements if they are granted for the convenience of the
- Petitioner Mayon Hotel & Restaurant is a single proprietor employer. The criterion in making a distinction between a
business registered in the name of petitioner Pacita O. Po, supplement and a facility does not so much lie in the kind (food,
whose mother, petitioner Josefa Po Lam, manages the lodging) but the purpose. Considering, therefore, that hotel
establishment. The hotel and restaurant employed about workers are required to work different shifts and are expected
sixteen employees. to be available at various odd hours, their ready availability is a
- Due to the expiration and non-renewal of the lease contract necessary matter in the operations of a small hotel, such as
for the rented space occupied by the said hotel and restaurant petitioners’ business.
at Rizal Street, the hotel operations of the business were Disposition petition is hereby DENIED. The Decision of
suspended. The operation of the restaurant was continued in its January 17, 2003 of the Court of Appeals in CA-G.R. SP No.
new location at Elizondo Street, Legazpi City, while waiting for 68642 upholding the Joint Decision of July 14, 2000 of the Labor
the construction of a new Mayon Hotel & Restaurant. Only nine Arbiter in RAB V Case Nos. 04-00079-97 and 04-00080-97 is
of the sixteen employees continued working at its new site. AFFIRMED, with the following MODIFICATIONS:
- On various dates, the 16 employees filed complaints for (1) Granting separation pay of one-half (1/2) month
underpayment of wages and other money claims against for every year of service to respondents Loveres,
petitioners. Macandog and Llarena;
- Executive Labor Arbiter rendered a Joint Decision in favor of (2) Granting retirement pay for respondents Guades,
the employees. Nicerio, and Alamares;
- On appeal to the NLRC, the decision of the Labor Arbiter was (3) Removing the deductions for food facility from the
reversed, and all the complaints were dismissed. amounts due to all respondents;
- Respondents filed a motion for reconsideration with the NLRC (4) Awarding moral damages of P20,000.00 each for
and when this was denied, they filed a petition for certiorari respondents Loveres, Macandog, Llarena, Guades,
with the CA which rendered the now assailed decision. Nicerio, Atractivo, and Broñola;
(5) Deleting the award of exemplary damages of
ISSUE P10,000.00 from all respondents except Loveres,
WON the cost of the food and snacks provided to respondents Macandog, Llarena, Guades, Nicerio, Atractivo, and
as facilities should have been included in reckoning the Broñola; and
payment of respondents’ wages (6) Granting attorney’s fees of P10,000.00 each to all
respondents.
HELD The case is REMANDED to the Labor Arbiter for the
NO RECOMPUTATION of the total monetary benefits awarded and
- While petitioners submitted Facility Evaluation Orders issued due to the employees concerned in accordance with the
by the DOLE Regional Office whereby the cost of meals given by decision. The Labor Arbiter is ORDERED to submit his
[petitioners] to [respondents] were specified for purposes of compliance thereon within thirty (30) days from notice of this
considering the same as part of their wages, We cannot decision, with copies furnished to the parties.
consider the cost of meals in the Orders as applicable to
[respondents]. [Respondents] were not interviewed by the
DOLE as to the quality and quantity of food appearing in the
AKLAN ELECTRIC V NLRC
applications of [petitioners] for facility evaluation prior to its [PAGE 144]
approval to determine whether or not [respondents] were
indeed given such kind and quantity of food. Also, there was no INTERNATIONAL SCHOOL ALLIANCE V QUISUMBING
evidence that the quality and quantity of food in the Orders
were voluntarily accepted by [respondents]. On the contrary;
[PAGE 32]
while some [of the respondents] admitted that they were given
meals and merienda, the quality of food serve[d] to them were
not what were provided for in the Orders and that it was only
when they filed these cases that they came to know about said
Facility Evaluation Orders. [Petitioner] Josefa herself, who
applied for evaluation of the facility (food) given to PHILEX GOLD VS PHILEX BULAWAN SUPERVISORS
[respondents], testified that she did not inform [respondents] 468 SCRA 111
concerning said Facility Evaluation Orders. AZCUNA; August 25, 2005
- Even granting that meals and snacks were provided and
indeed constituted facilities, such facilities could not be NATURE
deducted without compliance with certain legal requirements. Petition for certiorari to review CA decision
The employer simply cannot deduct the value from the
FACTS FACTS
- Philex Gold operates a gold mining concession in Sipalay, - Bankard, Inc. (Bankard) classifies its employees by levels. On
Negros Occidental where the sole and exclusive bargaining May 28, 1993, its Board of Directors approved a "New Salary
representative of all supervisors is the Philex Bulawan Scale" for the purpose of making its hiring rate competitive in
Supervisors Union. On July 1, 1997, Philex Gold made the the industry’s labor market. The "New Salary Scale" increased
employees of its Benguet operations supervisory employees in the hiring rates of new employees. Accordingly, the salaries of
its Sipalay operations. employees who fell below the new minimum rates were also
- As it turned out, the salaries of the Padcal employees were adjusted to reach such rates under their levels.
higher than those locally hired in Bulawan despite the fact that - Bankard’s move drew the Bankard Employees Union-WATU
they were of similar rank and classification doing parallel duties (petitioner), the duly certified exclusive bargaining agent of the
and functions. regular rank and file employees of Bankard, to press for the
- The union filed a complaint against Philex for discriminatory increase in the salary of its old, regular employees. Bankard
wage policy which Article 248 (e)1 of the Labor Code prohibits took the position, however, that there was no obligation on the
and defines as Unfair Labor practice. part of the management to grant to all its employees the same
- The Voluntary Arbitrator initially found for the Union but on increase in an across-the-board manner.
motion for reconsideration reversed its original order and - Petitioners filed Notices of Strike on the ground of
instead ordered an P800 across the board increase. In its order, discrimination and other acts of Unfair Labor Practice. The
the Voluntary Arbitrator also decreed that the principal officers strike was averted, however, when the dispute was certified by
of Philex be solidarily liable for the payment of the increase. the Secretary of Labor and Employment for compulsory
- On appeal to the CA, the original ruling of the arbitrator was arbitration.
reinstated. Hence this appeal to the SC - NLRC, finding no wage distortion, dismissed the case for lack
of merit. MFR was denied. Hence, this petition for certiorari.
ISSUES
1. WON the notice sent through petitioner’s Liaison office can ISSUE
be considered as notice to counsel WON the unilateral adoption by an employer of an upgraded
2. WON the petitioners-corporate officer are solidarily liable salary scale that increased the hiring rates of new employees
3. WON the doctrine of equal pay for equal work should not without increasing the salary rates of old employees amounts to
remove management prerogative to institute difference in discrimination
salary on the basis of seniority, skill, experience, and dislocation
factor in the same class of supervisory workers doing the same HELD
kind of work NO
Ratio Absent any indication that the voluntary increase of
HELD salary rates by an employer was done arbitrarily and illegally
1. NO for the purpose of circumventing the laws or was devoid of any
- Section 4, Rule III of the NCMB Procedural Guidelines in the legitimate purpose other than to discriminate against the
Conduct of Voluntary Arbitration Proceedings states that “where regular employees, this Court will not step in to interfere with
a party is represented by counsel or authorized representative, this management prerogative.
service shall be made on the latter”. As the notice was sent to a Reasoning
place other than that of the counsel, the receipt of the notice by - Petitioner cannot make a contrary classification of private
the counsel shall be the reckoning date for the 10-day respondent’s employees without encroaching upon recognized
reglementary period to file a motion for reconsideration. management prerogative of formulating a wage structure, in
2. NO this case, one based on level.
- The corporation is a juridical entity with legal personality - While seniority may be a factor in determining the wages of
separate and distinct from those acting for and in its behalf, and employees, it cannot be made the sole basis in cases where the
in general, from the people comprising it. The rule is that nature of their work differs. Moreover, for purposes of
obligations incurred by the corporation, acting through its determining the existence of wage distortion, employees cannot
directors, officers and employees, are its sole liabilities. There create their own independent classification and use it as a basis
are circumstances where the director, trustee or officer of the to demand an across-the-board increase in salary.
corporation may be held solidarily liable with the corporation. - Apart from the findings of fact of the NLRC and the Court of
These include acts by these individuals which are in bad faith or Appeals that some of the elements of wage distortion are
with gross negligence. absent, petitioner cannot legally obligate Bankard to correct the
3. NO alleged "wage distortion" as the increase in the wages and
- In this case, the petitioner failed to differentiate the basic salaries of the newly-hired was not due to a prescribed law or
salary from any kind of salary increase or additional benefit wage order. The wordings of Article 124 are clear. If it was the
which may have been given to the Padcal supervisors due to intention of the legislators to cover all kinds of wage
their seniority, experience and other factors. The records only adjustments, then the language of the law should have been
show that an ex-Padcal supervisor is paid a higher salary than a broad, not restrictive as it is currently phrased.
locally hired supervisor of he same rank. The company’s - Moreover, Bankard’s right to increase its hiring rate, to
prerogative must be exercised in good faith and with due establish minimum salaries for specific jobs, and to adjust the
regard to the rights of labor. A priori, they are not absolute rates of employees affected thereby is embodied under Section
prerogatives but are subject to legal limits, collective bargaining 2, Article V (Salary and Cost of Living Allowance) of the parties’
agreements, and the general principles of fair play and justice. Collective Bargaining Agreement (CBA).
Disposition Petition is denied Disposition present petition is hereby DENIED.
BANKARD EMPLOYEES UNION V NLRC (BANKARD F. MINIMUM WAGES

INC)
423 SCRA 148
CARPIO-MORALES; February 17, 2004 9.19 WAGES AND THE
CONSTITUTION
1
Art 248 (e) – to discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership in any
MINIMUM WAGES
labor organization …
manner as the value of living quarters. Whether or not bonus
forms part of wages depends upon the circumstances or
ATOK BIG WEDGE MINING CO INC V ATOK BIG
conditions for its payment. If it is an additional
WEDGE MUTUAL BENEFIT ASSOCIATION compensation which the employer promised and agreed
92 PHIL 755 to give without any conditions imposed for its payment,
LABRADOR; March 3, 1953 such as success of business or greater production or
output, then it is part of the wage. But if it is paid only if
NATURE profits are realized or a certain amount of productivity
PETITION for review by certiorari of a decision of the Court of achieved, it can not be considered part of the wages. In
Industrial Relations the case at bar, it is not payable to all but to laborers only. It is
also paid on the basis of actual production or actual work
FACTS accomplished. If the desired goal of production is not obtained,
- On September 4, 1950, a demand was submitted to petitioner or the amount of actual work accomplished, the bonus does not
by respondent union through its officers for various accrue. It is evident that under the circumstances it is paid only
concessions, among which were (a) an increase of P0.50 in when the labor becomes more efficient or more productive. It is
wages, (b) commutation of sick and vacation leave if not only an inducement for efficiency, a prize therefore, not a part
enjoyed during the year, (c) various privileges, such as free of the wage.
medical care, medicine, and hospitalization, (d) right to a closed 3. NO
shop, check off, etc., (e) no dismissal without prior just cause - Both parties agreed that any award should be retroactive to
and with a prior investigation, etc. the date of the presentation of the demands, which is
- Some of the demands, were granted by the petitioner, and the September 4, 1950. The terms of the stipulation are clearly
others were rejected. Hearings were held in the respondent against petitioner's contention. There being no question as to
court (CIR) its agreement, the same must be given force and effect.
- After the hearings the respondent court rendered a decision Disposition Dismissed with costs
fixing the minimum wage for the laborers at P3.20, declaring
that additional compensation representing efficiency bonus
should not be included as part of the wage, and making the BENEFICIARIES
award effective from September 4, 1950 (the date of the
presentation of the original demand, instead of from April 5, PEOPLE V GATCHALIAN
1951, the date of the amended demand).
104 PHIL 664
BAUTISTA ANGELO; September 30, 1958
ISSUES
1. WON the Court of Industrial Relations erred in fixing the FACTS
minimum wage at P3.20 - Alfonso Gatchalian owner or manager of the New Life Drug
2. WON the Court of Industrial Relations erred in declaring that Store was charged with a violation of Section 3 of Republic Act
the additional compensation representing the efficiency bonus No. 602 for paying Expedito Fernandez, a monthly salary of P60
should not be included as part of the wage to P90 on or about August 4, 1951, up to and including
3. WON the Court of Industrial Relations erred in making the December 31, 1953 which is less than that provided for by law,
award effective from September 4, 1950 thereby leaving a difference of an unpaid salary to the latter in
the total amount of P1,016.64 for the period above-mentioned.
HELD - He filed a written motion to dismiss based on two grounds
1. NO which in substance merely consist in that the violation charged
- Petitioner contends that the laborer and his family need only does not constitute a criminal offense but carries only a civil
the amount of P2.58 for food so this should be the basis for the liability, and even if it does, the section of the law alleged to
determination of his wage, not what he actually spends. have been violated does not carry any penalty penalizing it.
Furthermore, that it is not justifiable to fix a wage higher than - The city Attorney of Zamboanga filed his answer to the motion
that provided by Republic Act No. 602 and that respondent to dismiss contending that the law which was violated by the
union made the demand in accordance with a pernicious accused carries with it both civil and criminal liability, the latter
practice of claiming more after an original demand is granted. being covered by Section 15 which provides for the penalty for
- The respondent court found that P2.58 is the minimum all willful violations of any of the provisions of the Minimum
amount actually needed by the laborer and his family. But this Wage Law.
does not mean that it is his actual expense. A person's needs - The Court issued an order dismissing the informations with
increase as his means increase. This is true not only as to food costs de oficio and cancelling the bail bond filed by the accused.
but as to everything else-education, clothing, entertainment, The court in the same order directed the Regional
etc. The law guarantees the laborer a fair and just wage. Representative of the Department of Labor to immediately
The minimum must be fair and just. The "minimum institute a civil action against the erring employer for the
wage" can by no means imply only the actual minimum. collection of the alleged underpayment of wages due the
Some margin or leeway must be provided, over and employees.
above the minimum, to take care of contingencies, such - A motion for reconsideration having been denied, the
as increase of prices of commodities and increase in Government took the present appeal.
wants, and to provide means for a desirable
improvement in his mode of living. That the P3 minimum ISSUE
wage fixed in the law is still far below what is considered a fair WON law which violated by the accused carries with it both civil
and just minimum is shown by the fact that this amount is only and criminal liability
for the year after the law takes effect, as thereafter the law
fixes it at P4. Neither may it be correctly contended that the HELD
demand for increase is due to an alleged pernicious practice. YES
Frequent demands for increase are indicative of a healthy spirit - It is clear from the provisions of Republic Act 602 that while
of wakefulness to the demands of a progressing and an Section 3 explicitly requires every owner of an establishment
increasingly more expensive world. located outside of Manila or its environs to pay each of its
2. NO employees P3.00 a day on the effective date of the Act, and one
- Petitioner contends that the efficiency bonus paid the laborer year thereafter P4.00 a day, Section 15 imposes both a criminal
should have been included in his minimum wage, in the same penalty for a wilful violation of any of the above provisions and
a civil liability for any underpayment of wages due an - These provisions are substantive in nature and had been
employee. adopted for common observance by the persons affected. They
- The intention of the law is clear: to slap not only a criminal cannot be eluded nor subverted lest the erring employer runs
liability upon an erring employer for any willful violation of the into the sanction of the law. On the other hand, the provisions
acts sought to be enjoined but to attach concurrently a civil adverted to by counsel are merely administrative in character
liability for any underpayment he may commit as a result which had been adopted to set the machinery by which the law
thereof. is to be enforced. They are provisions established for
- The law speaks of a willful violation of 11 any of the provisions observance by the officials entrusted with its enforcement.
of this Act", which is all-embracing, and the same must include Failure to comply with them would therefore subject them
what is enjoined in Section 3 thereof which embodies the very merely to administrative sanction. They do not come under the
fundamental purpose for which the law has been adopted. penal clause embodied ed in Section 15(a).
- The Minimum Wage Law (Republic Act 602) was patterned - It is true that Section 3 under which appellee was charged
after the U. S. Fair Labor Standards Act of 1938. does not state that it shall be unlawfull for an employer to pay
- While in substance they are similar, they however contain his employees wages below the minimum wage but merely
some differences in their phraseology and in the apportionment requires that the employer shall pay wages not below the
of their provisions. Thus, while Section 15 (a), paragraph 2, of minimum wage. But failure of such declaration does not make
the Fair Labor Standards Act makes it unlawful for an employer the non-observance of the provisions less unlawful than
not to pay the minimum wage prescribed therein, our Minimum otherwise, for such provision embodies precisely the raison
Wage Law does not contain a similar provision. Again, the Fair d'etre of the law itself. Indeed, Section is the very provision on
Labor Standards Act enumerates in one single section all those which all the other provisions of the law are built.
acts which are declared unlawful and are not spread out in Disposition The order appealed from was set aside. It was
different sections as done in our law. ordered that the cases be remanded to the court a quo for
- It should also be noted that while Section 16 of the Fair Labor further proceedings, with costs against appellee.
Standards Act which provides for the penalties to be imposed
for any willful violation of the provisions of the Act specifically
SEPARATE OPINION
states that those penalties refer to acts declared unlawful under
Section 15 of the same Act, our law does not contain such
specification. REYES JBL [concur]
- This distinction is very revealing. It clearly indicates that while - The act complained of, therefore, is an offense penalized
the Fair Labor Standards Act intends to subject to criminal tinder the Act. Our duty being to interpret the Act in
action only acts that are declared unlawful, our law by consonance with its primary purpose to benefit the laborer, we
legislative fiat intends to punish not only those expressly should consider that the only sanction for not paying the
declared unlawful but even those not so declared but are minimum wage were to be the payment of interest on the
clearly enjoined to be observed to carry out the fundamental unpaid salary, the situation of the wage earner would have
purpose of the law. One such provision is undoubtedly that been in no way advanced and the Minimum Wage Act would be
which refers to the payment of the minimum wage embodied in practically nullified, for a laborer is in no position to, engage in
Section 3. protracted litigation with his employer. As pointed in the opinion
- Indeed, the main objective of the law is to provide for a rock- of Justice Bautista Angelo the criminal liability is the only
bottom wage to be observed and followed by all employers of effective sanction under the circumstances.
all agricultural and industrial establishment. This objective
would be defeated were we to adopt a restrictive interpretation BENGZON [dissent]
of the above penal clause, for all employer who knows that he - Sec.. 15, subsections (a) and (e) should be read together
cannot be amenable to a criminal action would be prone to substantially as follows:
subvert the law because if he is detected it would be easy for Any person who violates any provision of this Act shall be
him to pay the underpayment and the corresponding interest as punished with fines, etc. * * * cxcept that where the
would be the case were he to assume merely a civil liability. violation consist in paying, the employee less than the
- This would be a mockery and a decision of the law not minimum wage the employer shall be punished by
contemplated by our lawmaker which would certainly render it requiring him to satisfy the difference, plus attorney's fees.
nugatory and abortive. If the law is to survive, it must be real, - Subsection (e) punishes the particular "violation" of paying
militant and effective. less than the minimum wage. It is a special provision, which
- "The establishment of the maximum wage benefits directly the under well-known rules of construction, should prevail over the
low-paid employees, who now receive inadequate wages on general provision in subsection (a). In other words, although the
which to support themselves and their families. It benefits all Act does not expressly say so, subsection (e) is an exception1
wage earners indirectly by setting a floor below which their to subsection (a).
remuneration cannot fail. It raises the standards of competition - It is a mistake to suppose that this interpretation fails to
among employers, since it would protect the fair-minded punish the employer who disregards the Act; because the
employer who voluntarily pays a wage that supports the wage liability imposed by subsection (e) is unquestionably a sanction,
earner from the competition of the employer who operates at penal in nature, which except for the the law, would not be
lower cost by reasons of paying his workers a wage below demandable.
subsistence. If, in fact, the employer cannot pay a subsistence Additional liability, is their prevailing idea. And yet, why should
wage then he should riot continue his operation unless he the law impose on the employer (who pays in accordance with a
improves his methods and equipment so as to make the contract freely entered into), additional burdens not imposed on
payment of the minimum wage feasible for him otherwise the the other employers willfully violating other fundamental
ernployer is wasting the toil of the worker and the material provisions of the Act.
resources used in the employment. Second methods of - It may be argued that subsection (e) is not really a sanction
operation, progressive and fair-minded Management, and an independent of subsection (a), or additional thereto, because it
adequate minimum wage go hand in hand." merely repeats the well-known principle that "every person
- Counsel for appellee however entertains a different criminally liable is also civily liable."
interpretation. He contends that if Section 15 (a) should be - The answer is twofold: first, attorney's fees are not usually
interpreted in a manner that would embrace a wilful violation of included in such principle-a robber is not required to pay
any of the provisions of the law we would have a situation attorney's fees; second, the employee is not really the injured
where even the officials entrusted with its enforcement may be party because he accepted the employment under a contract
held criminally liable which is not contemplated in the law. "Scienti et volenti nulla fit injuria." There is no violation of any
right of the employee for which reparation is due. There is only
a breach of the statute, for which the Government can choose, and severe, specially at the. beginning of the operation of the
and did choose the proper sanction, namely, payment of the law, upon which Senator Tañada, withdrew his amendment,
salary differential under subsection (e). The Congress did not with the understanding that in a year or so after the
choose more than that; contrary to what it did in analogous promulgation of the law, it will be amended.
situations. - The majority of this Tribunal on its own initiative would make
the Minimum Wage Law militant and effective by a blanket and
indiscriminate application of Section 15(a) to all violators of its
MONTEMAYOR [dissent]
provisions, whether or not such violation is expressly or
- Under the interpretation given by the majority, any employer
specifically declared unlawful by the law itself. Stated
who underpays his employees in violation of the Minimum Wage
otherwise, this Tribunal steps in, nay, rushes in to put teeth in a
Law (Section 3) would be subject to criminal prosecution. The
legislation which it considers toothless and would make
net result would be the unjust punishment of innocent
effective and militant what it regards would otherwise be
government officials and the discouragement and destruction of
ineffectual and inadequate. This Tribunal would, like one
infant and small industries.
unlicensed to practice medicine, prescribe a cure for a
- From the explanatory note of Senate Bill No. 202, we may
supposed legislational malady. That is not and has never been
have an idea of the attitude of the Legislature on this particular
the province, much less,
point:
the prerogative of the Judiciary. Otherwise, the courts would be
"One thing to be remembered is that the country has not yet
indulging in judicial legislation.
attained that degree of industrialization where wages can be
- If the Minimum Wage Law is found to be inadequate and
set at fully satisfactory levels from the viewpoints of human
ineffective, let the Legislature make the necessary changes and
values. Compromises must still be made until this full industrial
amendments. In fact, that was the legislative plan from the
status is attained. Another thing is that hasty and unjudicioas
beginning-observe the operation and working of the law and
action in passing minimum wage laws may be deterrent to
then make changes, if deemed necessary. But evidently, the
private capital which, on the contrary needs to be encouraged
Legislature is satisfied with the operation and mode of
to invest in local industries if the industrialization of our country
application of the law, because although approved on April 6,
must someday be a fact." -- As the majority opinion correctly
1951, and made effective 120 days thereafter, in other words,
observes, our Minimum Wage Law is patterned after that of the
after a seven-year operation, it (Legislature) has not seen fit to
United States Fair Labor Standards Act (F. L. S. A.) of 1938, as
introduce any major changes4 specially in the application of the
amended. The establishment of this minimum wage in this
penalty.
country being a sort of experiment, it being the first time that it
- Anyway, after all is said and done, the least that could be said
was being tried out, and not knowing whether or not it would be
about the applicability of Section 15(a) of the Minimum Wage
a success, it is to be presumed that the Legislature acted
law to violations of Section 3 is doubtful. Even brushing aside
cautiously and warily, and even while adopting as a pattern the
and not considering the grave doubts entertained by the
United States F.L.S.A., it did not wish or Intend to make our law
undersigned as to the applicability of said Section 15(a) to
more stern and strict in its enforcement and application,
violations of Section 3, we have in evidence the opinion of the
particularly as regards its penalties. But the majority opinion
Court of First Instance of Zamboanga and according to it, the
would make our law more rigorous and severe, more
opinion of the major sector of the Zamboanga bar, sustaining
comprehensive and more devastating in the application of its
the view that Section 15(a) is not applicable to violations of
penal provisions.
Sections 3 of the Minimum Wage Law. We have the well settled
- What the Legislature intended to penalize with fine and prison
principle in the interpretation of penal laws that in case of
sentence were only those acts which it enumerated and
doubt, the interpretation favorable to the accused should be
declared unlawful, not the mere failure to follow and comply
adopted.
with the obligations imposed upon an employer, such as, the
nonpayment of the minimum wage.
- It will be noticed that our law expressly provides that any REYES A [dissent]
employer underpaying an employee in violation of the Act shall - It is doubtful if the penal sanction prescribed in section 15(a)
be liable to said employee in the amount of the underpayment, of that Act-presumably for the acts and practices therein
with legal interest, plus a reasonable amount for attorney's declared unlawful-could be rightfully applied to the act of
fees. This amount may be recovered not only by the employee underpaying an employee, since paragraph (e) of that same
himself, but by the Secretary of Labor on his behalf. In my section already provides a specific remedy therefor.
opinion, this civil responsibility to be enforced with the aid of Considering that penal statutes are strictly construed against
the Department of Labor, was regarded as sufficient the state and in case of doubt courts must adopt the
punishment and deterrent on the employer. Being a civil action, construction favorable to the accused, the courts should not
the employee only needs preponderance of evidence to win his presume to legislate by putting into the law more teeth than the
suit. The Legislature may have been of the belief that
application of the penal sanction in the form of fine and prison
sentence would be too radical a measure, would scare and
discourage new and infant industries, besides inducing violators
to resort to underhanded but effective measures to hide and
conceal infringement of the law, to say nothing of the added
difficulty in securing conviction, which requires not only EFFECT INABILITY TO PAY
preponderance of evidence, but proof of guilt beyond
reasonable doubt.
- To show that the Legislature did not intend to be too severe PHIL. APPAREL WORKERS UNION V NLRC (PHIL
and stern in the application of this new law which was merely APPAREL INC)
being tried out, while House Bill No, 1732 was being discussed 106 SCRA 444
in the Senate, Senator Tañada believing that the bill was too MAKASIAR; July 31, 1981
lenient for those who violated its provisions by providing for a
fine of only not more than P1,000.00 or imprisonment of not
more than six months, he proposed that the fine be increased NATURE
to not more than P10,000.00-half the amount of the fine Petition for review on certiorari of the NLRC decision
provided in Section 16(a) of the U.S. Fair Labor Standards Act;
but the committee sponsoring the bill, through Senator Torres, FACTS
objected to the proposed amendment as being too excessive - Phil. Apparel, Inc. (a corporation engaged in the garments
industry) had a 1973-1976 CBA with the Phil. Apparel Workers
Union (representing its approximately 2000 employees). Prior to The preservation of the lives of citizens is a basic duty of the
said CBA’s expiry (31 July 1976), the union submitted to the State, more vital than the preservation of corporate profits.
company proposals for its renewal. Negotiations were held - Par. (k), Sec. 1 of the Rules Implementing Pd 1123 is null and
thereafter. void as the Secretary of Labor exceeded his authority in
- 2 April 1977: the company and the union agreed, partially, enacting it.
that the employees would be given an across-the-board Disposition Certiorari granted. NLRC decision set aside.
increase in regular wages of P0.80 per day retroactive to April Company directed to pay, in addition to the increased
1st. A memorandum of undertaking was signed to this effect. allowance provided for in PD 1123, the negotiated wage
Because there were other unresolved issues, the new CBA was increase of P0.80 daily, as well as other wage increases
not signed until 3 September 1977. embodied in the CBA. Costs against company.
- In the meantime, PD 1123 was issued by the President on 21
April 1977 to take effect 1 May 1977. Section 4 of said decree
SEPARATE OPINION
provided that employees then receiving P50/month as ECOLA
should be given an increase in the sum of P60/month, but
“distressed employers may be exempted while in such TEEHANKEE [concur]
condition.” - The memorandum of agreement signed by the parties clearly
- The Secretary of Labor subsequently promulgated the IRR, shows that the negotiated staggered wage increases were
Section 1(k) of which also exempts employers “that have intended to be exclusive of any statutory increase in the
granted, in addition to the allowance under PD 525, at least P60 minimum wage and the ECOLA is in effect another increase in
monthly wage increase on or after 1 January 1977, provided the minimum wage.
that those who paid less than this amount shall pay the - There is basis for the majority holding that the questioned
difference.” portion of the rules implementing PD1123 is void, but I do not
- 1 May 1977: the company gave its employees the P60 ECOLA deem it necessary to concur in such a ruling given that the
provided in PD1123. issue of validity is not the lis mota of the case.
- 13 May 1977: the company wrote to DOLE asking if the wage
increase of P0.80/day agreed upon between the company and MELENCIO-HERRERA [dissent]
the union could be credited against the ECOLA provided in - It is inequitable that an employer, who has granted increases
PD1123. The reply of 15 July 1977 was in the affirmative “if in pay on a given day, is further ordered to give additional
management and labor had agreed to grant said amount.” increases a few days thereafter.
- After the new CBA was signed in 3 Sept 1977, the union raised - Section 1(k) of the Implementing rules of PD1123 is part of the
the question of creditability of the April 1 increase of P0.80/day law and binding on the courts. Great weight should be given to
to the May 1 ECOLA. The matter was taken up in grievance the interpretation of a given statute by the government agency
procedure but no agreement was reached. The union thereafter called upon to implement it.
filed a complaint with the DOLE against the company for ULP.
- 30 May 1978: Labor Arbiter dismissed the union’s complaint
saying that the issue should be resolved through further 9.20 AGENCIES FOR WAGE
proceedings under the grievance machinery established in the
CBA. NLRC set aside LA’s decision, and dismissed the complaint FIXING MACHINERY
upon its merits. Hence, this petition for review.
A. NATIONAL WAGES AND PRODUCTIVITY
ISSUE
WON the company’s application of the negotiated wage COMMISSION
increase as partial compliance with PD 1123 is proper
HELD B. REGIONAL TRIPARTITE WAGES AND

NO PRODUCTIVITY BOARD
- The company cannot fall within the exceptions provided for in
par. (k) of the Rules implementing PD 1123 on the grant of
ECOLA because when said decree took effect on May 1, 1977 FUNCTIONS
there was neither a perfected CBA (signed 3 Sept 1977) nor an
actual payment of the negotiated wage increase made NASIPIT LUMBER CO V NLRC (NWPC)
retroactive to April 1, 1977.
- The letter of Undersecretary Inciong dated 13 May 1977 that 289 SCRA 339 (03)
there was an agreement between the parties on the wage SANDOVAL-GUTIERREZ; September 8, 2003
increase was based on a wrong premise because there were
still other unresolved bargaining items and it was only on 3 NATURE
September 1977 that the parties reached an agreement A petition for certiorari with prayer for issuance of a temporary
thereon. restraining order and/or writ of preliminary injunction.
- There being no actual agreement yet and actual payment of
the agreed P0.80 wage increase, there could have been no FACTS
“grant” of wage increases by the employer w/in the - November 19, 1993: the Regional Tripartite Wages and
contemplation of par. k, Sec. 1 of the implementing rules of PD Productivity Board (RTWPB) of Region X, Northern Mindanao,
1123 to exempt the employer. Cagayan de Oro City, issued a Wage Order mandating a P7.00
- In this case, the company is guilty of bad faith when it signed increase in the minimum daily wage of all workers and
the CBA on 3 September 1977 without letting the union know employees in the private sector in Region X receiving a daily
that it was going to apply part of the allowances being paid wage of not more than P130.00 per day and, an additional
under PD 1123 to the wage increases provided for in the CBA. P10.00 allowance per day.
- The stability of the economy does not depend on the employer - Nasipit Lumber Company et al. filed their separate application
alone, but on government economic policies concerning for exemption from compliance, claiming they are distressed
productivity in all areas. It is the living wage of the workers establishments whose paid-up capital has been impaired by at
which is the basis of a stable economy. If a company cannot least 25%.
pay a living wage, it has no business operating at the - After finding that the petitioners indeed sustained financial
expense of the lives of its workers from the very start. losses which impaired their respective paid-up capital, the
RTWPB granted petitioners a full exemption from compliance
with the said Wage Order for a period of one (1) year or from
December 8, 1993 to December 7, 1994. NATURE
- Petitioners, citing the continuous business decline in the wood Petition for certiorari impugning the Decision of the Secretary of
processing industry, filed a consolidated petition for extension Labor upholding the Order of the Regional Director finding
of their full exemption from compliance for another year. petitioner guilty of violating Regional Wage Order No. RO2-02
RTWPB denied the application, relying on Section 7 of the NWPC
Revised Guidelines No. 1: “Establishments shall be granted full FACTS
exemption of one (1) year from effectivity of the Order for all - Regional Wage Order No. RO2-02 was issued by the Regional
categories of exemption.” Tripartite Wage and Productivity Board of the DOLE. It provided
- National Wages and Productivity Commission denied the that the statutory minimum wage rates applicable to workers
appeal interposed by the petitioners, stating that the rationale and employees in the private sector in Region II shall be
behind the policy is to afford protection to workers who may be increased by P14.00 per day in Cagayan. Labor inspectors from
unfairly affected by the deleterious effect of a prolonged DOLE found that petitioner violated the wage order as it did not
exemption which is not in accord with the very purpose of the implement an across the board increase in the salary of its
issuance of a Wage Order. employees. At the hearing at the DOLE Regional Office for the
alleged violation, petitioner maintained that it complied with the
ISSUE wage order as it paid the mandated increase in the minimum
WON NWPC exceeded its jurisdiction wage. Regional Director Martinez ruled that petitioner violated
RO2-02. He ordered petitioner to pay the deficiency in the
salary of its employees in the total amount of P555,133.41.
- Petitioner appealed to public respondent Labor Secretary
Quisumbing. On the same date, the Regional Wage Board
HELD issued Wage Order No. RO2-02-A amending the earlier wage
NO, NWPC did not exceed its jurisdiction. order in providing that the workers and employees in the
Reasoning private sector shall receive an across the board wage increase
- ART. 121. Powers and Functions of the Commission. – of P14.00 in Cagayan, retroacting to the date of effectivity of
The Commission shall have the following powers and functions: RO2-02. Private respondent CARSUMCO EMPLOYEES UNION
“x x x moved for execution of the order. Regional Director Martinez
(c) To prescribe rules and guidelines for the determination of granted the motion and issued the writ of execution. Petitioner
appropriate minimum wage and productivity measures at moved for reconsideration. The DOLE regional sheriff served on
the regional, provincial or industry levels; petitioner a notice of garnishment of its account with the Far
(d) To review regional wage levels set by the Regional East Bank and Trust Company. The sheriff also seized
Tripartite Wages and Productivity Boards to determine if petitioner's dump truck and scheduled its public sale. Hence,
these are in accordance with prescribed guidelines and this petition, with a prayer for the issuance of a TRO.
national development plans;
- JUSTICE PANGANIBAN: “The foregoing clearly grants the ISSUE
NWPC, x x x, the power to ‘prescribe the rules and guidelines’ WON RO2-02-A violates petitioner’s right to due process
for the determination of minimum wage and productivity
measures. x x x, the NWPC has the power not only to prescribe HELD
guidelines to govern wage orders, but also to issue exemptions YES
therefrom, x x x. In short, the NWPC lays down the guidelines Ratio RO2-02-A is invalid for lack of public consultations and
which the RTWPB implements.” hearings and non-publication in a newspaper of general
- In affirming the RTWPB’s Resolution denying petitioners’ circulation, in violation of the Labor Code.
application for extension for another year of their full exemption Reasoning
from compliance with Wage Order No. RX-03, the NWPC did not - Article 123 of the Labor Code provides that in the performance
act with grave abuse of discretion. On the contrary, it merely of their wage-determining functions, the Regional Board shall
applied its own Guideline No. 01, Series of 1992 limiting the conduct public hearings and consultations, giving notices to
duration of exemption to only one (1) year. interested parties. Moreover, it mandates that the Wage Order
Disposition Petition is dismissed. Decision of the NWPC is shall take effect only after publication in a newspaper of general
affirmed. circulation in the region. In passing RO2-02-A without going
through the process of public consultation and hearings, the
9.21 AREA MINIMUM WAGES Regional Board deprived petitioner and other employers of due
process as they were not given the opportunity to ventilate
AND CRITERIA their positions regarding the proposed wage increase. The
contention that, despite the wording of RO2-02 providing for a
statutory increase in minimum wage, the real intention of the
Regional Board was to provide for an across the board increase
9.22 WAGE ORDER is absurd. There was no ambiguity in the provision of RO2-02 as
it provided in clear and categorical terms for an increase in
METHODS OF FIXING statutory minimum wage of workers in the region. The
subsequent passage of RO2-02-A changed the essence of the
original Order.
EMPLOYERS CONFEDERATION OF THE PHIL V Disposition petition is GRANTED.
NATIONAL WAGES AND PRODUCTIVITY
COMMISSION PIECE WORKER
[PAGE]
LAMBO V NLRC
REQUIREMENTS VAILIDITY 317 SCRA 420
CAGAYAN SUGAR MILLING CO V SECRETARY MENDOZA; October 26, 1999
284 SCRA 150 NATURE
PUNO; January 15, 1998 Petition for certiorari
against PULP AND PAPER DISTRIBUTORS INC., [petitioner
FACTS herein] She alleges that she was a regular employee of the
- Petitioners Avelino Lambo and Vicente Belocura were corporation having served thereat as Wrapper sometime in
employed as tailors by private respondents J.C. Tailor Shop September 1975. On November 29, 1991, for unknown reasons,
and/or Johnny Co on September 10, 1985 and March 3, 1985, she was advised verbally of her termination and was given a
respectively. Petitioners were paid on a piece-work basis, prepared form of Quitclaim and Release which she refused to
according to the style of suits they made. Regardless of the sign. Instead she brought the present complaint for illegal
number of pieces they finished in a day, they were each given a dismissal. In charging the company of underpayment of wages,
daily pay of at least P64.00 complainant in the same position paper alleges that, rarely
- On January 17, 1989, petitioners filed a complaint against during her employment with the respondent she received her
private respondents for illegal dismissal and sought recovery of salary, a salary which was in accordance with the minimum
overtime pay, holiday pay, premium pay on holiday and rest wage law. She was not paid overtime pay, holiday pay and five-
day, service incentive leave pay, separation pay, 13th month day service incentive leave pay, hence she is claiming for
pay, and attorney’s fees. The Labor Arbiter ruled in their favor. payments thereof by instituting the present case.
- The NLRC reversed the decision of the labor arbiter. It found - Company denied having terminated the services of the
that the petitioners were not dismissed but merely threatened complainant and alleges inter alia that starting 1989 the orders
with a closure of a business if they insisted on their demand for from customers became fewer and dwindled to the point that it
a “straight payment of their minimum wage,” after petitioners, is no longer practical to maintain the present number of
on January 17, 1989, walked out of a meeting with private packer/wrappers. Maintaining the same number of
respondents and other employees. In that meeting, the packers/wrappers would mean less pay because the work
employees voted to maintain the company policy of paying allocation is no longer the same as it was. Such being the case,
them according to the volume of their work. Only the the respondent has to reduce temporarily the number of
petitioners insisted that they be paid the minimum wage and packers/wrappers. Complainant was among those who were
other benefits. The NLRC held petitioners guilty of temporarily laid-off from work. Complainant last worked with
abandonment of work. the company on June 29, 1991.
- Petitioners deny that they abandoned their work. They allege - As regards complainant's allegation that on November 29,
that they were dismissed as they were about to file a petitione 1991, she was forced to sign a quitclaim and release by the
with DOLE for payment of benefits. respondent, the latter clarified that considering that five months
from the time the complainant last worked with the company,
ISSUES the management decided to release the complainant and give
1. WON the petitioners are regular employees her a chance to look for another job in the meantime that no job
2. WON the petitioners abandoned their work is available for her with the company. In other words,
complainant was given the option and considering that she did
HELD not sign the documents referred to as the Quitclaim and
1. There are two categories of employees paid by results: (1) Release, the respondent did not insist, and did not terminate
those whose time and performance are supervised by the the services of the complainant. It was just surprise [sic] to
employer. (Here, there is an element of control and supervision receive the present complaint. In fact, respondent added that
over the manner as to how the work is to be performed. A the reason why the complainant was called on November 29,
piece-rate worker belongs to this category especially if he 1991 was not to work but to receive her 13th month pay of
performs his work in the company premises.); and (2) those P636.70 as shown by the voucher she signed.
whose time and performance are unsupervised. (Here, the - As regards the claim of the complainant for underpayment,
employer’s control is over the result of the work. Workers on respondent did not actually denied the same but give the
pakyao and takay basis belong to this group.). Petitioners reservation that should the same be determined by this Office it
belong to the 1st group. is willing to settle the same considering the fact that
- The relationship at bar passes the four-fold test. The mere fact complainant herein being paid by results, it is not in a proper
that they were employed on a per piece basis does not negate position to determine whether the complainant was underpaid
their status as regular employees. Payment by the piece is just or not.
a method of compensation and does not define the essence of
the relations. Nor does the fact that petitioners are not covered ISSUES
by the SSS affect the employer-employee relationship 1. WON the computation should apply the minimum wage and
2. To justify a finding of abandonment of work, there must be not the wage rate of workers
proof of a deliberate and unjustified refusal on the part of an 2. WON the private respondent's separation pay should not
employee to resume his employment. Private respondents have been computed at one month's pay for every year of
failed to discharge this burden. Other than the self-serving service because private respondent should be considered
declarations in the affidavits of their two employees, private retrenched, the separation pay should be "one month's pay or
respondents did not adduce proof of overt acts of petitioners at least one/half (1/2) month pay for every year of service,
showing their intention to abandon their work. On the contrary, whichever is higher, and not one (1) month's pay for every year
the evidence shows that petitioners lost no time in filing the of service as public respondent had ruled."
case for illegal dismissal against private respondent. This fact 3. WON petitioner's challenge to the computation of salary
negates any intention on their part to sever their employment differential must be dismissed as "the work of the private
relationship respondent is seasonal, being dependent upon the availability
Disposition Petition granted of job-orders" and not "twenty-six (26) days a month because
as a piece worker whose work was seasonal."
PULP AND PAPER INC V NLRC (ANTONIO)
HELD
279 SCRA 408 1. Minimum wage is applicable.
PANGANIBAN; September 24, 1997 - In the absence of wage rates based on time and motion
studies determined by the labor secretary or submitted by the
NATURE employer to the labor secretary for his approval, wage rates
Instant petition for certiorari of piece-rate workers must be based on the applicable
daily minimum wage determined by the Regional
FACTS Tripartite Wages and Productivity Commission. To ensure
- A case of illegal dismissal and underpayment of wages was the payment of fair and reasonable wage rates, Article 101 of
filed by MS. EPIFANIA ANTONIO [private respondent herein] the Labor Code provides that "the Secretary of Labor shall
regulate the payment of wages by results, including representatives from both workers' and employers'
pakyao, piecework and other nontime work." The same organization which would have applied to its piece-rate
statutory provision also states that the wage rates should be workers. Without those submissions, the labor arbiter
based, preferably, on time and motion studies, or those arrived had the duty to use the daily minimum wage rate for
at in consultation with representatives of workers' and non-agricultural workers prevailing at the time of
employers' organizations. In the absence of such prescribed private respondent's dismissal, as prescribed by the
wage rates for piece-rate workers, the ordinary Regional Tripartite Wages and Productivity Boards. Put
minimum wage rates prescribed by the Regional differently, petitioner did not take the initiative of proposing an
Tripartite Wages and Productivity Boards should apply. appropriate wage rate for its piece-rate workers. In the absence
This is in compliance with Section 8 of the Rules Implementing of such wage rate, the labor arbiter cannot be faulted for
Wage Order Nos. NCR-02 and NCR-02-A the prevailing wage applying the prescribed minimum wage rate in the computation
order at the time of dismissal of private respondent, viz: of private respondent's separation pay. In fact, it acted and
Sec. 8. Workers Paid by Results. a) All workers paid by ruled correctly and legally in the premises.
results including those who are paid on piece work, takay, - It is clear, therefore, that the applicable minimum wage for an
pakyaw, or task basis, shall receive not less than the eight-hour working day is the basis for the computation of the
applicable minimum wage rates prescribed under the Order separation pay of piece-rate workers like private respondent.
for the normal working hours which shall not exceed eight (8) The computed daily wage should not be reduced on the basis of
hours work a day, or a proportion thereof for work of less than unsubstantiated claims that her daily working hours were less
the normal working hours. than eight. Aside from its bare assertion, petitioner presented
- The adjusted minimum wage rates for workers paid by results no clear proof that private respondent's regular working day
shall be computed in accordance with the following steps: was less than eight hours. Thus, the labor arbiter correctly used
1) Amount of increase in AMW x 100 = % increase Previous the full amount of P118.00 per day in computing private
AMW respondent's separation pay. We agree with the following
2) Existing rate/piece x % increase = increase in rate/piece; computation:
3) Existing rate/piece + increase in rate/piece = adjusted - Considering therefore that complainant had been laid-off for
rate/piece. more than six (6) months now, we strongly feel that it is already
b) The wage rates of workers who are paid by results shall reasonable for the respondent to pay the complainant her
continue to be established in accordance with Art. 101 of the separation pay of one month for every year of service, a
Labor Code, as amended and its implementing regulations. fraction of six (6) months to be considered as one whole year.
- On November 29, 1991, private respondent was orally Separation pay should be computed based on her minimum
informed of the termination of her employment. Wage Order salary as will be determined hereunder.
No. NCR-02, in effect at the time, set the minimum daily wage Separation pay 1 month = 16 yearsP118.00 x 26 x 16 years =
for non-agricultural workers like private respondent at P118.00. P49,088.00
This was the rate used by the labor arbiter in computing the
separation pay of private respondent. We cannot find any abuse The amount "P118.00" represents the applicable daily minimum
of discretion, let alone grave abuse, in the order of the labor wage per Wage Order Nos. NCR-02 and NCR-02-A; "26", the
arbiter which was later affirmed by the NLRC. number of working days in a month after excluding the four
- Moreover, since petitioner employed piece-rate workers, it Sundays which are deemed rest days; "16", the total number of
should have inquired from the secretary of labor about their years spent by private respondent in the employ of petitioner.
prescribed specific wage rates. In any event, there being no 2. NO
such prescribed rates, petitioner, after consultation with its - Petitioner misapprehended the ground relied upon by public
workers, should have submitted for the labor secretary's respondent for awarding separation pay. In this case, public
approval time and motion studies as basis for the wage rates of respondent held that private respondent was constructively
its employees. This responsibility of the employer is clear under dismissed, pursuant to Article 286 of the Labor Code which
Section 8, Rule VII, Book III of the Omnibus Rules Implementing reads:
the Labor Code: - Art. 286. When employment not deemed terminated. The
Sec. 8. Payment by result. bonafide suspension of the operation of a business or
(a) On petition of any interested party, or upon its initiative, undertaking for a period not exceeding six (6) months, or the
the Department of Labor shall use all available devices, fulfillment by the employee of a military or civic duty shall not
including the use of time and motion studies and terminate employment. In all such cases, the employer shall
consultations with representatives of employers' and workers' reinstate the employee to his former position without loss of
organizations, to determine whether the employees in any seniority rights if he indicates his desire to resume his work not
industry or enterprise are being compensated in accordance later that one (1) month from his resumption of operations of
with the minimum wage requirements of this Rule. his employer or from his relief from the military or civic duty.
(b) The basis for the establishment of rates for piece, output - Petitioner failed to discern that public respondent, in finding
or contract work shall be the performance of an ordinary that the services of private respondent were terminated, merely
worker of minimum skill or ability. adopted by analogy the rule on constructive dismissal. Since
(c) An ordinary worker of minimum skill or ability is the private respondent was not reemployed within six (6) months
average worker of the lowest producing group representing from the "suspension" of her employment, she is deemed to
50% of the total number of employees engaged in similar have been constructively dismissed. Otherwise, private
employment in a particular establishment, excluding learners, respondent will remain in a perpetual "floating status." Because
apprentices and handicapped workers employed therein. petitioner had not shown by competent evidence any just cause
(d) Where the output rates established by the employer do for the dismissal of private respondent, she is entitled to
not conform with the standards prescribed herein, or with the reinstatement or, if this is not feasible, to separation pay
rates prescribed by the Department of Labor in an equivalent to one (1) month salary for every year of service.
appropriate order, the employees shall be entitled to the Private respondent, however, neither asked for reinstatement
difference between the amount to which they are entitled to nor appealed from the labor arbiter's finding that she was not
receive under such prescribed standards or rates and that illegally dismissed; she merely prayed for the grant of her
actually paid them by employer. monetary claims. Thus, it is sustained that the award of
- In the present case, petitioner as the employer separation pay made by public respondent, for employees
unquestionably failed to discharge the foregoing constructively dismissed are entitled to separation pay.
responsibility. Petitioner did not submit to the secretary Because she did not ask for more, we cannot give her more. We
of labor a proposed wage rate based on time and repeat: she appealed neither the decision of the labor arbiter
motion studies and reached after consultation with the
nor that of the NLRC. Hence, she is not entitled to any daily wage from P35.84 to P37.84. Further, on 1 July 1985, all
affirmative relief. regular employees who were members of the collective
- Furthermore, we cannot sustain petitioner's claim that private bargaining unit got a raise of P1.76 in their basic daily wage,
respondent was retrenched. For retrenchment to be considered which pushed that daily wage from P37.84 to P39.60, as against
a ground for termination, the employer must serve a written the non-regular's basic wage of P36/day. And, by Nov ‘87, the
notice on the workers and the Department of Labor and lowest paid regular employee had a basic daily rate of P64.64,
Employment at least one month before the intended date P10.64 more than the statutory minimum wage paid to a non-
thereof. Petitioner did not comply with this requirement. regular employee.
3. YES - Petitioner’s principal contention: A wage distortion in the wage
- it should be dismissed. As earlier observed, private respondent structure of private respondent Company continued to exist
is entitled to the minimum wage prevailing at the time of the although a gap of P1.84 between the daily wage rate of regular
termination of her employment. The same rate of minimum employees and that of casual employees had been re-
wage, P118.00, should be used in computing her salary established upon the effectivity of the CBA increase on 1 July
differential resulting from petitioner's underpayment of her 1984.
wages. Thus, the labor arbiter correctly deducted private
respondent's actually received wage of P60 a day from the ISSUE
prescribed daily minimum wage of P118.00, and multiplied the WON NLRC committed a grave abuse of discretion amounting to
difference by 26 working days, and subsequently by 16 years, lack or excess of jurisdiction, when it concluded that the wage
equivalent to her length of service with petitioner. Thus, the distortion had ceased to exist, after 1 July 1984
amount of P31,149.56 as salary differential.
- Contrary to the assertion of petitioner, neither the assailed HELD
Decision nor the pleadings of private respondent show that NO
private respondent's work was seasonal. More important, - The re-establishment of a significant gap or differential
petitioner utterly failed to substantiate its allegation that between regular employees and casual employees by operation
private respondent's work was seasonal. We observe that the of the CBA was more than substantial compliance with the
labor arbiter based the computation of the salary differential on requirements of the several Wage Orders (and of Article 124 of
a 26-day month on the presumption that private respondent's the Labor Code2)
work was continuous. In view of the failure of petitioner to In this case the Court summarized the principles regarding
support its claim, we must sustain the correctness of this wage distortion:
computation. [a] The concept of wage distortion assumes an existing
Disposition petition is DISMISSED and the assailed Decision is grouping or classification of employees which establishes
AFFIRMED. distinctions among such employees on some relevant or
legitimate basis. This classification is reflected in a differing
WAGE DISTORTION wage rate for each of the existing classes of employees.
[b] Wage distortions have often been the result of government-
decreed increases in minimum wages. There are however, other
NATIONAL FEDERATION OF LABOR V NLRC causes of wage distortions, like merger of 2 companies (with
(FRANKLIN BAKER COMPANY OF THE PHILIPPINES) differing classifications of employees and different wage rates)
234 SCRA 311 where the surviving company absorbs all the employees of the
dissolved corporation.
FELICIANO; July 21, 1994 [c] Should a wage distortion exist, there is no legal requirement
that, in the rectification of that distortion by readjustment of the
NATURE age rates of the differing classes of employees, the gap which
Petition for Review on Certiorari had previously or historically existed or restored in precisely the
same amount. In other words correction of a wage distortion
FACTS may be done by reestablishing a substantial or significant gap
- Wage Orders Nos. 3, 4, 5 and 6 were promulgated by the then (as distinguished from the historical gap) between the wage
Pres. Marcos. Before the effectivity of Wage Order No. 3, the rates of the differing classes of employees.
wage rates of regular employees and of casual (or non-regular [d] The reestablishment of a significant difference in wage
employees of private respondent Franklin Baker Company of rates may be the result of resort to grievance procedures or
the Philippines (Davao Plant) ("Company") were such that there collecting bargaining negotiations.
was a positive differential of P4.56 between the 2. The effect of The Court also emphasized that: Whether or not a new
the implementation of the successive Wage Orders upon the additional scheme of classification of employees for
daily wage rates of these two (2) groups of employees was compensation purposes should be established by the Company
summarized by petitioner in the following table: (and the legitimacy or viability of the bases of distinction there
- Upon the effectivity of Wage Order No. 5, grievance meetings embodied) is properly a matter for management judgment and
were held by petitioner National Federation of Labor ("NFL") and discretion, and ultimately, perhaps, a subject matter for
private respondent Company sometime in June 1984, bargaining negotiations between employer and employees
addressing the impact which implementation of the various Disposition Petition DISMISSED for lack of merit,
Wage Orders had on the wage structure of the Company. The
wage rates of bith casual and regular employees were the same
at P34. Then all the casual or non-regular employees of private PRUBANKERS ASSOCIATION V PRUDENTIAL BANK
respondent Company (at least in its Davao Plant) were & TRUST COMPANY
"regularized," or converted into regular employees, pursuant to 302 SCRA 74
the request of petitioner NFL. PANGANIBAN; January 25, 1999
- On 1 July 1984, the effectivity date of the 1984 CBA between
NFL and the Company, all regular employees of the Company
received an increase of P1.84 in their daily wage; the regular 2
Article 124. Standards/Criteria for Minimum Wage Fixing. - . . .
daily wage of the regular employees thus became P35.84 as xxx xxx xxx
against P34.00 per day for non-regular employees. As used herein, a wage distortion shall mean a situation where an increase in
- Through Wage Order No. 6, casual employees received an prescribed wage rates results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and among employee
increase of their daily wage from P34 to 36. At the same time, groups in an establishment as to effectively obliterate the distinctions embodied in
Company unilaterally granted an across-the-board increase of such wage structure based on skills, length of service, or other logical bases of
P2 in the daily rate of all regular employees, increasing their differentiation.
- a wage distortion arises when a wage order engenders wage
FACTS parity, between employees in different rungs of the
- On November 18, 1993, the Regional Tripartite Wages and organizational ladder of the same establishment. It bears
Productivity Board of Region V issued Wage Order No. RB 05-03 emphasis that wage distortion involves a parity in the salary
which provided for a Cost of Living Allowance (COLA) to workers rates of different pay classes which, as a result, eliminates the
in the private sector who had rendered service for at least three distinction between the different ranks in the same region
months before its effectivity, and for the same period - Petitioner's claim of wage distortion must also be denied for
thereafter. The amount of COLA depended on the region where one other reason. The difference in wages between employees
it was implemented in the same pay scale in different regions is not the mischief
- On November 23, 1993, the Regional Tripartite Wages and sought to be banished by the law. In fact it recognizes the
Productivity Board of Region, VII issued Wage Order No. RB VII- disparity.
03, which directed the integration of the COLA mandated - It must be understood that varying in each region of the
pursuant to Wage Order No. RO VII-02-A into the basic pay of all country are controlling factors such as the cost of living; supply
workers. It also established an increase in the minimum wage and demand of basic goods, services and necessities; and the
rates for all workers and employees in the private sector. Again purchasing power of the peso.
amount differed depending on the region
- The petitioner then granted a COLA of P17.50 to its employees ASSOCIATED LABOR UNIONS-TUCP V NLRC
at its Naga Branch, the only branch covered by Wage Order No.
(MAGBANUA. DEL MONTE PHILIPPINES INC)
RB 5-03, and integrated the P150.00 per month COLA into the
basic pay of its rank-and-file employees at its Cebu, Mabolo and 235 SCRA 395
P. del Rosario branches, the branches covered by Wage Order MENDOZA; August 16, 1994
No. RB VII-03
- Prubankers association told Prudential Bank to extend the NATURE
application of the wage orders to its employees outside Regions Special civil action of certiorari to set aside the decision and
V and VII, claiming that the regional implementation of the said resolution dated June 22, 1992 and September 14, 1992
orders created a wage distortion in the wage rates of the bank’s respectively of the National Labor Relations Commission
employees nationwide
- they decided to submit the dispute for voluntary arbitration. FACTS
Issue being won the enforcement of the wage orders created a - On July 1, 1989, Republic Act No. 6727, otherwise known as
wage distortion. (there was no mention of the decision so I think the Wage Rationalization Act, took effect, granting a P25.00/day
the ruled that it created a wage distortion) increase in the statutory minimum wage of all workers and
- CA ruled that there was no distortion saying that the RA employees in the private sector, subject to certain conditions.
justified it. It noted, I that the underlying considerations in - In implementation of the law, private respondent Del Monte
issuing the wage orders are diverse, based on the distinctive Philippines, Inc. gave a P25.00/day increase to the P54.00/day
situations and needs existing in each region wages of its temporary employees or "broilers." Because the
regular employees, members of petitioner union, who were then
ISSUE receiving P100.80 a day were not granted a similar increase,
WON a wage distortion resulted from respondent's they complained to the management of private respondent.
implementation of the aforecited Wage Orders - On February 14, 1990, the parties executed a Memorandum
Agreement wherein private respondent, "in positive response to
HELD the union's representations and notwithstanding that it has no
NO legal or contractual obligation," granted the members of
- The statutory definition of' wage distortion I'S found Article petitioner union a P10.00/day wage increase effective January
124 of the Labor Code, as amended by Republic Act No. 6727: 1, 1990, subject to the latter's right to claim P15.00/day as
“As used herein, a wage distortion shall mean a situation balance, through compulsory arbitration.
where an increase in prescribed wage results in the - On June 5, 1990, petitioners filed a complaint against private
elimination or severe contraction of intentional quantitative respondent in the National Labor Relations Commission (NLRC).
differences in wage or salary rates between and among They alleged that a wage distortion had been created. On
employee groups in an establishment as to effectively appeal the NLRC affirmed the Labor Arbiter's findings and
obliterate the distinctions embodied in such wage structure denied petitioner's motion for reconsideration.
based on skills, length of service, or other logical bases of
differentiation” ISSUE
- Wage distortion involves four elements: WON the wage increases mandated by the parties’ Collective
1. An existing hierarchy of positions with corresponding salary Bargaining Agreement should be considered (should take
rates 2. A significant change in the salary rate of a lower pay effect)
class without a concomitant increase in the salary rate of a
higher one 3. The elimination of the distinction between the HELD
two levels YES
4. The existence of the distortion in the same region of the - Art. 124 of the Labor Code, as amended by Republic Act No.
country 6727,
- no wage distortion resulted when respondent implemented the expressly provides that where the application of any
subject Wage Orders ill the covered branches-. In the said prescribed wage increase by virtue of a law or wage order
branches, there was an increase in the salary rates of all pay issued by any Regional Board results in distortions of the
classes. Furthermore, the hierarchy of positions based on skills, wage structure within an establishment, the employer and
length of service and other logical bases of differentiation was the union shall negotiate to correct the distortions. The law
preserved recognizes, therefore, the validity of negotiated wage
- petitioner maintains that, as a result of the two Wage Orders, increases to correct wage distortions. The legislative
the employees in the affected regions have higher intent is to encourage the parties to seek solution to
compensation than their counterparts of the same level in other the problem of wage distortions through voluntary
regions negotiation or arbitration, rather than strikes,
- The Court is not persuaded. A wage parity between employees lockouts, or other concerted activities of the
in different rungs is not at issue here, but a zeage disparity employees or management. Recognition and validation of
between employees in the same rung but located in different wage increases given by employers either unilaterally or as a
regions of the country
result of collective bargaining negotiations for the purpose of create their own independent classification and use it as a basis
correcting wage distortions are in keeping with the public to demand an across-the-board increase in salary.
policy of encouraging employers to grant wage and allowance - Apart from the findings of fact of the NLRC and the Court of
increases to their employees which are higher than the Appeals that some of the elements of wage distortion are
minimum rates of increases prescribed by statute or absent, petitioner cannot legally obligate Bankard to correct the
administrative regulation. alleged "wage distortion" as the increase in the wages and
- Apex Mining, Inc. v. NLRC salaries of the newly-hired was not due to a prescribed law
To compel employers simply to add on legislated increases in or wage order. The wordings of Article 124 are clear. If it was
salary or allowances without regard to what is already paid, the intention of the legislators to cover all kinds of wage
would be to penalize employers who grant their workers more adjustments, then the language of the law should have been
than the statutorily prescribed minimum rates of increases. broad, not restrictive as it is currently phrased.
Clearly, this would be counterproductive so far as securing - Moreover, Bankard’s right to increase its hiring rate, to
the interest of labor is concerned. establish minimum salaries for specific jobs, and to adjust the
- Cardona v. NLRC rates of employees affected thereby is embodied under Section
There was no wage distortion where the employer made 2, Article V (Salary and Cost of Living Allowance) of the parties’
salary adjustments in terms of restructuring of benefits and Collective Bargaining Agreement (CBA).
allowances and re was an increase pursuant to the CBA. Disposition the present petition is hereby DENIED.
- Finally, whether or not a wage distortion exists by reason of
the grant of a wage increase to certain employees is essentially
a question of fact. In this case, the findings of the Labor Arbiter,
affirmed by the NLRC, that no wage distortion exists being
9.23 EFFECT OF BENEFITS
based on substantial evidence, are entitled to respect and
finality.
PRUBANKERS ASSN V PRUDENTIAL BANK AND CO
Disposition Petition dismissed
[PAGE 181]
BANKARD EMPLOYEES UNION V NLRC (BANKARD
INC) SECTION 10: WOMEN WORKERS
423 SCRA 148
CARPIO-MORALES; February 17, 2004
10.01 WOMEN AND THE
FACTS
- Bankard, Inc. (Bankard) classifies its employees by levels. On
CONSTITUTION
May 28, 1993, its Board of Directors approved a "New Salary
Scale" for the purpose of making its hiring rate competitive in
the industry’s labor market. The "New Salary Scale" increased WOMEN WORKERS
the hiring rates of new employees. Accordingly, the salaries of
employees who fell below the new minimum rates were also PHIL TELEGRAPH AND TELEPHONE CO V NLRC
adjusted to reach such rates under their levels.
- Bankard’s move drew the Bankard Employees Union-WATU
[PAGE 26]
(petitioner), the duly certified exclusive bargaining agent of the
regular rank and file employees of Bankard, to press for the
increase in the salary of its old, regular employees. Bankard
10.02 COVERAGE
took the position, however, that there was no obligation on the
part of the management to grant to all its employees the same
increase in an across-the-board manner. 10.03 PROHIBITED ACTS
- Petitioners filed Notices of Strike on the ground of
discrimination and other acts of Unfair Labor Practice. The
strike was averted, however, when the dispute was certified by 1) NIGHT WORK AND EXCEPTION
the Secretary of Labor and Employment for compulsory 2) DISCRIMINATION
arbitration.
3) MARRIAGE
- NLRC, finding no wage distortion, dismissed the case for lack
of merit. MFR was denied. Hence, this petition for certiorari. 4) GENERAL
ISSUE 10.04 FACILITIES

WON the unilateral adoption by an employer of an upgraded
salary scale that increased the hiring rates of new employees
without increasing the salary rates of old employees resulted in
wage distortion within the contemplation of Article 124 of the 10.05 SPECIAL CLASSIFICATION
Labor Code SPECIAL WOMEN WORKERS
HELD
NO
Ratio Petitioner cannot make a contrary classification of private 10.06 MATERNITY LEAVE
respondent’s employees without encroaching upon recognized
management prerogative of formulating a wage structure, in
this case, one based on level.
Reasoning
10.07 SEXUAL HARRASSMENT
- While seniority may be a factor in determining the wages of
employees, it cannot be made the sole basis in cases where the WORK RELATED ENVIRONMENT
nature of their work differs. Moreover, for purposes of
determining the existence of wage distortion, employees cannot
EDUCATION OR TRAINING0RELATED
ENVIRONMENT
DUTY EMPLOYER complied with
LIABILITY EMPLOYER HELD
REMEDIES 1. NO
Reasoning
- Republic Act No. 7877 was not yet in effect at the time of the
LIBRES V NLRC (NATIONAL STEEL CORPORATION, occurrence of the act complained of. It was still being
ET AL) deliberated upon in Congress when petitioner's case was
307 SCRA 675 decided by the Labor Arbiter. As a rule, laws shall have no
BELLOSILLO; May 28, 1999 retroactive effect unless otherwise provided, or except in a
criminal case when their application will favor the accused.
Hence, the Labor Arbiter have to rely on the MEC report and the
NATURE
common connotation of sexual harassment as it is generally as
Petition for certiorari seeking to annul the decision of public
understood by the public. Faced with the same predicament,
respondent NLRC sustaining the Labor Arbiter’s finding that
the NLRC had to agree with the Labor Arbiter. In so doing, the
petitioner was validly suspended by private respondents, as
NLRC did not commit any abuse of discretion in affirming the
well as the NLRC resolution denying petitioner’s motion to
decision of the Labor Arbiter.
reconsider its decision
2. NO
Reasoning
FACTS
- it could be expected since Libres was Capiral's immediate
- Petitioner Libres was an Assistant Manager at National Steel
superior. Fear of retaliation and backlash, not to forget the
Corp.
social humiliation and embarrassment that victims of this
- In August, 1993, he received a Notice of investigation
human frailty usually suffer, are all realities that Capiral had to
requesting him to submit a written explanation regarding the
contend with. Moreover, the delay did not detract from the truth
charge of sexual harassment made by Capiral, Hynson’s (his
derived from the facts. Petitioner Libres never questioned the
boss) secretary, and warned him that failure to file this would
veracity of Capiral's allegations. In fact his narration even
be construed as a waiver of his right to be heard.
corroborated the latter's assertion in several material points. He
- He submitted his explanation, denying the accusation, offering
only raised issue on the complaint's protracted filing.
to submit himself for clarificatory interrogation
3. YES
- Hynson conducted an internal investigation, letting Libres and
Reasoning
Capiral provide their sides of the issue
- Due process as a constitutional precept does not always
- Hynson Jr. submitted his report to the Management Evaluation
require a trial type proceeding. It is satisfied when a person is
Committee (MEC). The MEC concluded that the charges against
notified of the charge against him and given an opportunity to
petitioner constituted a violation of the Plant's Rules and
explain or defend himself. The essence is simply to be heard, an
Regulations. It opined that "touching a female subordinate's
opportunity to seek a reconsideration of the action complained
hand and shoulder, caressing her nape and telling other people
of. Petitioner was given a Notice of Investigation, he was asked
that Capiral was the one who hugged and kissed or that she
to submit a a written explanation to his superior, he was
responded to the sexual advances are unauthorized acts that
allowed to air his grievance in a private session, and upon the
damaged her honor". Referring to the Manual of the Philippine
release of the suspension order made by the MEC he was
Daily Inquirer in defining sexual harassment, the MEC finally
requested its reconsideration (but he was denied)
concluded that petitioner's acts clearly constituted sexual
- The personal confrontation with the MEC officers, which he
harassment as charged and recommended petitioner's
requested, was not necessary, for they had already
suspension for thirty (30) days without pay.
exhaustively presented their claims and defenses in different
- Libres filed a complaint for illegal suspension and unjust
fora. Litigants may be heard through pleadings, written
discrimination against respondent NSC and its officers, private
explanations, position papers, memoranda or oral arguments
respondents herein, before the Labor Arbiter. Citing the failure
(Howevers Savings and Loan Association v NLRC).
of the MEC to grant him audience despite his offer to answer
Disposition petition is DISMISSED, no grave abuse of
clarificatory questions, petitioner claimed denial of due process.
discretion having been committed by public respondent
- Petitioner primarily disputes the failure of the NLRC to apply
National Labor Relations Commission in upholding the
RA No. 7877, "An Act Declaring Sexual Harassment Unlawful in
suspension of petitioner Carlos G. Libres as justified and in
the Employment, Education or Training Environment and for
accordance with due process. Consequently, its decision of 28
Other Purposes," in determining whether he actually committed
August 1995 as well as its resolution of 31 October 1995 is
sexual harassment. He asserts that his acts did not fall within
AFFIRMED.
the definition and criteria of sexual harassment as laid down in
Sec. 3 of the law. 5 Specifically, he cites public respondent's
failure to show that his acts of fondling the hand and massaging PHIL AEOLUS AUTOMOTIVE UNITED CO V NLRC
the shoulders of Capiral "discriminated against her continued (CORTEZ)
employment," "impaired her rights and privileges under the 331 SCRA 237 / 382 PHIL 250
Labor Code," or "created a hostile, intimidating or offensive
environment." BELLOSILLO; April 28, 2000
- Petitioner questioned the set off since there was no call or
notice for the payment of the unpaid subscription, and that the NATURE
alleged obligation is not enforceable. This petition seeks to set aside the Decision and the Resolution
- The NLRC held that a stockholder who fails to pay his unpaid of NLRC which modified the decision of the Labor Arbiter finding
subscription on call becomes a debtor of the corporation and petitioners not guilty of illegal dismissal.
that the set-off of said obligation against the wages and other
due to petitioner is not contrary to law, morals, public policy FACTS
- Petitioner Philippine Aeolus Automotive United Corporation
ISSUE (PAAUC) is a corporation duly organized and existing under
1. WON RA 7877 is applicable in this case (to determine Philippine laws, petitioner Francis Chua is its President while
whether he actually committed sexual harassment.) private respondent Rosalinda C. Cortez was a company nurseof
2. WON the delay in instituting the complaint shows that it was petitioner corporation until her termination on 7 November
only an afterthought 1994.
3. WON the requirements of due process were sufficiently
- On 5 October 1994 a memorandum was issued by Ms. Myrna when she confronted William Chua resulting in her being
Palomares, Personnel Manager of petitioner corporation, charged with gross disrespect.
addressed to private respondent Rosalinda C. Cortez requiring - The Supreme Court, in a litany of decisions on serious
her to explain within forty-eight (48) hours why no disciplinary misconduct warranting dismissal of an employee, has ruled that
action should be taken against her (a) for throwing a stapler at for misconduct or improper behavior to be a just cause for
Plant Manager William Chua, her superior, and uttering dismissal (a) it must be serious; (b) must relate to the
invectives against him on 2 August 1994; (b) for losing the performance of the employee’s duties; and, (c) must show that
amount of P1,488.00 entrusted to her by Plant Manager Chua to the employee has become unfit to continue working for the
be given to Mr. Fang of the CLMC Department on 23 August employer. The act of private respondent in throwing a stapler
1994; and, (c) for asking a co-employee to punch-in her time and uttering abusive language upon the person of the plant
card thus making it appear that she was in the office in the manager may be considered, from a lay man's perspective, as a
morning of 6 September 1994 when in fact she was not. The serious misconduct. However, in order to consider it a serious
memorandum however was refused by private respondent misconduct that would justify dismissal under the law, it must
although it was read to her and discussed with her by a co- have been done in relation to the performance of her duties as
employee. She did not also submit the required explanation, so would show her to be unfit to continue working for her
that while her case was pending investigation the company employer. The acts complained of, under the circumstances
placed her under preventive suspension for thirty (30) days they were done, did not in any way pertain to her duties as a
effective 9 October 1994 to 7 November 1994. nurse. Her employment identification card discloses the nature
- On 20 October 1994, while Cortez was still under preventive of her employment as a nurse and no other. Also, the
suspension, another memorandum was issued by petitioner memorandum informing her that she was being preventively
corporation giving her seventy-two (72) hours to explain why no suspended pending investigation of her case was addressed to
disciplinary action should be taken against her for allegedly her as a nurse.
failing to process the ATM applications of her nine (9) co- 2. YES
employees with the Allied Banking Corporation. On 21 October - The gravamen of the offense in sexual harassment is not the
1994 private respondent also refused to receive the second violation of the employee's sexuality but the abuse of power by
memorandum although it was read to her by a co-employee. A the employer. Any employee, male or female, may rightfully cry
copy of the memorandum was also sent by the Personnel "foul" provided the claim is well substantiated. Strictly
Manager to private respondent at her last known address by speaking, there is no time period within which he or she is
registered mail. expected to complain through the proper channels. The time to
- Meanwhile, private respondent submitted a written do so may vary depending upon the needs, circumstances, and
explanation with respect to the loss of the P1,488.00 and the more importantly, the emotional threshold of the employee.
punching-in of her time card by a co-employee. - Private respondent admittedly allowed four (4) years to pass
- On 3 November 1994 a third memorandum was issued to before finally coming out with her employer's sexual
private respondent, this time informing her of her termination impositions. Not many women, especially in this country, are
from the service effective 7 November 1994 on grounds of made of the stuff that can endure the agony and trauma of a
gross and habitual neglect of duties, serious misconduct and public, even corporate, scandal. If petitioner corporation had
fraud or willful breach of trust. not issued the third memorandum that terminated the services
- On 6 December 1994 private respondent filed with the Labor of private respondent, we could only speculate how much
Arbiter a complaint for illegal dismissal, non-payment of annual longer she would keep her silence. Moreover, few persons are
service incentive leave pay, 13th month pay and damages privileged indeed to transfer from one employer to another. The
against PAAUC and its president Francis Chua. dearth of quality employment has become a daily "monster"
- LA rendered a decision holding the termination of Cortez as roaming the streets that one may not be expected to give up
valid and legal, at the same time dismissing her claim for one's employment easily but to hang on to it, so to speak, by all
damages for lack of merit. tolerable means. Perhaps, to private respondent's mind, for as
- NLRC reversed the decision of the LA and found petitioner long as she could outwit her employer's ploys she would
corporation guilty of illegal dismissal of private respondent continue on her job and consider them as mere occupational
Cortez. hazards. This uneasiness in her place of work thrived in an
atmosphere of tolerance for four (4) years, and one could only
ISSUES imagine the prevailing anxiety and resentment, if not
1. WON the NLRC gravely abused its discretion in holding as bitterness, that beset her all that time. But William Chua faced
illegal the dismissal of private respondent reality soon enough. Since he had no place in private
2. WON she is entitled to damages in the event that the respondent's heart, so must she have no place in his office. So,
illegality of her dismissal is sustained he provoked her, harassed her, and finally dislodged her; and
for finally venting her pent-up anger for years, he "found" the
HELD perfect reason to terminate her.
1. NO - In determining entitlement to moral and exemplary damages,
- Cortez claims that as early as her first year of employment her we restate the bases therefor. In moral damages, it suffices to
Plant Manager, William Chua, already manifested a special prove that the claimant has suffered anxiety, sleepless nights,
liking for her, so much so that she was receiving special besmirched reputation and social humiliation by reason of the
treatment from him who would oftentimes invite her "for a act complained of.22 [Art. 2217, New Civil Code of the
date," which she would as often refuse. On many occasions, he Philippines.] Exemplary damages, on the other hand, are
would make sexual advances - touching her hands, putting his granted in addition to, inter alia, moral damages "by way of
arms around her shoulders, running his fingers on her arms and example or correction for the public good"23 [Art. 2229, id.] if
telling her she looked beautiful. The special treatment and the employer "acted in a wanton, fraudulent, reckless,
sexual advances continued during her employment for four (4) oppressive or malevolent manner."24 [Art. 2232, id.]
years but she never reciprocated his flirtations, until finally, she - Anxiety was gradual in private respondent's five (5)-year
noticed that his attitude towards her changed. He made her employment. It began when her plant manager showed an
understand that if she would not give in to his sexual advances obvious partiality for her which went out of hand when he
he would cause her termination from the service; and he made started to make it clear that he would terminate her services if
good his threat when he started harassing her. She just found she would not give in to his sexual advances. Sexual
out one day that her table which was equipped with telephone harassment is an imposition of misplaced "superiority" which is
and intercom units and containing her personal belongings was enough to dampen an employee's spirit in her capacity for
transferred without her knowledge to a place with neither advancement. It affects her sense of judgment; it changes her
telephone nor intercom, for which reason, an argument ensued life. If for this alone private respondent should be adequately
compensated. Thus, for the anxiety, the seen and unseen hurt Barcenas had amorous relations. In May, 1982, or five months
that she suffered, petitioners should also be made to pay her before giving birth to the alleged son of Su on October 12,
moral damages, plus exemplary damages, for the oppressive 1982, she was sent home to Bicol. Upon the death of Su in July,
manner with which petitioners effected her dismissal from the 1983, she remained and continued in her job.
service, and to serve as a forewarning to lecherous officers and - . In 1985, Manuel Chua (Chua, for short) was elected President
employers who take undue advantage of their ascendancy over and Chairman of the Board of the Poh Toh Buddhist Association
their employees. of the Philippines, Inc. and Rev. Sim Dee (Dee, for short) was
Disposition Decision of NLRC finding the dismissal of private elected Head Buddhist Priest. Thereafter, Chua and Dee
respondent without just cause and ordering petitioners to pay discontinued payment of her monthly allowance and the
her back wages computed from the time of her dismissal, which additional P500 effective 1983. In addition, Barcenas and her
should be full back wages, is AFFIRMED. However, in view of the son were evicted forcibly from their quarters in the temple by
strained relations between the adverse parties, instead of six police officers. She was brought first to the Police precinct in
reinstatement ordered by public respondent, petitioners should Tondo and then brought to Aloha Hotel where she was
pay private respondent separation pay equivalent to one (1) compelled to sign a written undertaking not to return to the
month salary for every year of service until finality of this Buddhist temple in consideration of the sum of P10,000. She
judgment. In addition, petitioners are ordered to pay private refused and Chua shouted threats against her and her son. Her
respondent P25,000.00 for moral damages and P10,000.00 for personal belongings including assorted jewelries were never
exemplary damages. returned.
- The Labor Arbiter ruled for Barcenas but the NLRC reversed.
SECTION 11: MINORS ISSUES

1. WON Barcenas was a regular employee of the Manila
Buddhist Temple
2. WON Barcenas was illegally dismissed
11.01 MINORS AND THE
HELD
CONSTITUTION 1. YES
Reasoning
- We agree with the petitioner's claim that she was a regular
11.02 LAW employee of the Manila Buddhist Temple as secretary and
interpreter of its Head Monk, Su. As Head Monk, President and
Chairman of the Board of Directors of the Poh Toh Buddhist
Association of the Philippines, Su was empowered to hire the
11.03 DISCRIMINATION petitioner under Article V of the By-laws of the Association
which states:
"The President or in his absence, the Vice President shall
SECTION 12: HOUSEKEEPERS represent the Association in all its dealings with the public,
subject to the Board, shall have the power to enter into any
contract or agreement in the name of the Association, shall
manage the active business operation of the Association,
12.01 COVERAGE shall deal with the bank or banks."
- Chua and Dee, on the other hand, claimed that Barcenas was
never an employee of the Poh Toh Temple but a servant who
12.02 HOUSEHELPERS confined herself to the temple and to the personal needs of the
late Chua Se Su and thus, her position is co-terminus with that
of her master. However, the work that she performed in the
temple could not be categorized as mere domestic work.
12.03 NON-HOUSEHOLD WORK Barcenas, being proficient in the Chinese language, attended to
ASSIGNMENT the visitors, mostly Chinese, who came to pray or seek advice
before Buddha for personal or business problems; arranged
meetings between these visitors and Su and supervised the
preparation of the food for the temple visitors; acted as tourist
BARCENAS V NLRC (REV SIM DEE) guide of foreign visitors; acted as liaison with some government
187 SCRA 498 offices; and made the payment for the temple, Meralco, MWSS
GANCAYCO; April 19, 1989 and PLDT bills. Indeed, these tasks may not be deemed
activities of a household helper. They were essential and
important to the operation and religious functions of the
FACTS
temple.
- In 1978, Chua Se Su (Su, for short) in his capacity as the Head
2. NO
Monk of the Buddhist Temple of Manila and Baguio City and as
Reasoning
President and Chairman of the Board of Directors of the Poh Toh
- Her status as a regular employee ended upon her return to
Buddhist Association of the Phils. Inc. hired the petitioner,
Bicol in May, 1982 to await the birth of her lovechild allegedly
Filomena Barcenas, who speaks the Chinese language as
by Su. The records do not show that she filed any leave from
secretary and interpreter.
work or that a leave was granted her. Neither did she return to
- Her position required her to receive and assist Chinese visitors
work after the birth of her child on October 12,1982, whom she
to the temple, act as tourist guide for foreign Chinese visitors,
named Robert Chua alias Chua Sim Tiong [Whoa, wait a minute!
attend to the callers of the Head Monk as well as to the food for
If you’re alert you’ll realize that Sim is the NEW Head Monk’s
the temple visitors, run errands for the Head Monk such as
name! Hmmm… don’t you think something else’s going on
paying the Meralco, PLDT, MWSS bills and act as liaison in some
government offices. Aside from her pay and allowances under here? ]. The NLRC found that it was only in July, 1983 after Su
the law, she received an amount of P500 per month plus free died that she went back to the Manila Buddhist Temple.
board and lodging in the temple. - She herself supplied the reason for her return. She stated:
- In December, 1979, Su assumed the responsibility of paying "It was the death-bed instruction to her by Chua Se So to stay
for the education of Barcenas’ nephew. In 1981, Su and at the temple and to take care of the two boys and to see to it
that they finish their studies to become monks and when they
are monks to eventually take over the two temples as their thereof, and ministers exclusively to the personal comfort
inheritance from their father." and enjoyment of the employer's family.
- Thus, her return to the temple was no longer as an employee - The foregoing definition clearly contemplates such
but rather as Su's mistress who is bent on protecting the househelper or domestic servant who is employed in the
proprietary and hereditary rights of her son and nephew. In her employer's home to minister exclusively to the personal
pleadings, the petitioner claims that they were forcefully comfort and enjoyment of the employer's family. The definition
evicted from the temple, harassed and threatened by cannot be interpreted to include househelp or laundrywomen
respondents and that the Poh Toh Buddhist Association is a working in staffhouses of a company
trustee corporation with the children as cestui que trust. These - The criteria is the personal comfort and enjoyment of the
claims are not proper in this labor case. They should be family of the employer in the home of said employer.
appropriately threshed out in the complaints already filed by - While it may be true that the nature of the work of a
the petitioner before the civil courts. Due to these claims, we househelper, domestic servant or laundrywoman in a home or
view the respondents' offer of P10,000 as indicative more of in a company staffhouse may be similar in nature, the
their desire to evict the petitioner and her son from the temple difference in their circumstances is that in the former instance
rather than an admission of an employer-employee relation. they are actually serving the family while in the latter case,
- The petitioner's claim for unpaid wages since May, 1982 which whether it is a corporation or a single proprietorship engaged in
she filed only in 1986, has already prescribed. Under Article 292 business or industry or any other agricultural or similar pursuit,
of the Labor Code, all money claims arising from employer- service is being rendered in the staffhouses or within the
employee relations must be filed within three years from the premises of the business of the employer. In such instance,
time the cause of action accrued, otherwise they shall forever they are employees of the company or employer in the business
be barred. concerned entitled to the privileges of a regular employee.
- Finally, while petitioner contends that she continued to work in Disposition Petition dismissed
the temple after Su died, there is, however, no proof that she
was re-hired by the new Head Monk. In fact, she herself
manifested that respondents made it clear to her in no
uncertain terms that her services as well as her presence and
12.04 CONDITIONS OF
that of her son were no longer needed. However, she persisted EMPLOYMENT
and continued to work in the temple without receiving her
salary because she expected Chua and Dee to relent and permit
the studies of the two boys. Consequently, under these ULTRA VILLA FOOD HOUSE V GENISTON
circumstances, no employer-employee relationship could have [PAGE 158]
arisen.
Disposition Decision of the NLRC is AFFIRMED.
SECTION 13: HOMEWORKERS
APEX MINING CO V NLRC
196 SCRA 251
GANCAYCO; April 22, 1991 13.01 COVERAGE AND
NATURE
REGULATION
Special civil action for certiorari to annul NLRC decision
FACTS 13.02 EMPLOYER

- Sinclita Candida was employed by Apex Mining Company, Inc.
to perform laundry services at its staff house. At first, she was
paid on a piece rate basis. Later, she was paid on a monthly
basis.
- While she was hanging her laundry, she accidentally slipped
and hit her back on a stone. She reported the accident to her
immediate supervisor and to the personnel officer. As a result of
the accident she was not able to continue with her work.
- She was permitted to go on leave for medication and was
offered P2k which was eventually increased to P5k to persuade
her to quit her job, but she refused the offer and preferred to
return to work. Petitioner did not allow her to return to work and
dismissed her.
- Labor arbiter ordered Apex Mining Company to pay the
complainant Salary Differential, Emergency Living Allowance,
13th Month Pay Differential and separation pay of one month
for every year of service NLRC affirmed.
ISSUE
WON the househelper in the staff houses of an industrial
company is a domestic helper
HELD
NO
- Petitioner is a regular employee
- Rule XIII, Section l(b), Book 3 of the Labor Code:
The term "househelper" as used herein is synonymous to the
term "domestic servant" and shall refer to any person,
whether male or female, who renders services in and about
the employer's home and which services are usually
necessary or desirable for the maintenance and enjoyment

Labor Law 1 Disini: 213 SCRA 621 GUTIERREZ JR September 4, 1992

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Labor Law 1 Disini: 213 SCRA 621 GUTIERREZ JR September 4, 1992

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Labor Law 1 A2010 - 173 - Disini

BANKARD EMPLOYEES UNION V NLRC (BANKARD F. MINIMUM WAGES

HELD B. REGIONAL TRIPARTITE WAGES AND

ISSUE 10.04 FACILITIES

SECTION 11: MINORS ISSUES

FACTS 13.02 EMPLOYER

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