Manila Terminal Co. v.

CIR, July 16, 1952 — MEDEL

G.R. No.L-4148 | 16 July 1952 | J. Paras
Petitioners: MANILA TERMINAL COMPANY, INC.
Respondents: THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND MUTUAL AID ASSOCIATION

Recit-ready Digest + Doctrine:

Manila Terminal employed some 30 watchmen for 12-hour shifts. Despite working for 12 hours a day, no overtime pay was
afforded to the watchmen, thus compelling them to file an action for money claims before the DOLE. Manila Terminal thereafter
reduced the shifts into an 8-hour shifts. A petition was also filed before the CIR for the money claims. The CIR rendered a decision
in favor of the watchmen.

The Manila Terminal argued that the daily wage included the overtime compensation. However, The record does not bear out
these allegations. Manila Terminal has relied merely on the facts that its watchmen had worked on 12-hour shifts at specific
wages per day and that, initially, no complaint was made about the matter.

Manila Terminal argued that the watchmen are now estopped from claiming their overtime pay since they did not demand nor
act upon it for 18 months. By reason of the watchmen’s inaction, Manila Terminal is arguing that the watchmen waived their
rights to the overtime pay. However, the Court ruled that the watchmen could not have waived their right impliedly nor expressly
as this would have been in violation of the Eight Hour Labor Law.

Facts:
 Manila Terminal Company, Inc. undertook the arrastre service in Manila's Port Area for the United States Army.
o It hired some 30 men as watchmen on 12-hour shifts with corresponding daily compensations of P3 for the
day shift and P6 for the night shift.
 Manila Terminal began the post war operation of the arrastre service under the control of the Bureau of Customs.
o The watchmen of the Manila Terminal continued in the service with a number of substitutions and additions -
their daily salaries having been raised to P4 for the day shift and P6.25 for the night shift.
 Several members of the Manila Terminal Relief and Mutual Aid Association sent a letter to the DOLE, requesting that the
matter of overtime pay be investigated, but nothing was done by the DOLE.
 Manila Terminal instituted the system of strict 8-hour shifts.
 The Manila Port Terminal Police Association, not registered in accordance with the provisions of Commonwealth Act No.
213, filed a petition with the Court of Industrial Relations.
 After being organized and certified by the DOLE, Manila Terminal Relief and Mutual Aid Association filed an
amended petition with the CIR praying that Manila Terminal be ordered to pay its watchmen or police force overtime
pay from the commencement of their employment.
 By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the President, the entire police force of
the Manila Terminal was consolidated with the Manila Harvor Police of the Customs Patrol Service - a Government agency
under the exclusive control of the Commissioner of Customs and the Secretary of Finance.
 The Manila Terminal Relief and Mutual Aid Association will hereafter be referred to as the Association.
 The CIR rendered a decision and ordered Manila Terminal to pay its police force:
o Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as additional overtime
compensation for the period from September 1, 1945 to May 24, 1947;
o Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00 a.m. during the same
period:
o Additional compensation of 50 per cent for work performed on Sundays and legal holidays during the same
period;
o Additional compensation of 50 per cent for work performed on Sundays and legal holidays from May 24, 1947
to May 9, 1949; and
o Additional compensation of 25 per cent for work performed at night from May 29, 1947 to May 9, 1949.
 Motions for reconsideration were filed.
 With respect to overtime compensation, Judge Lanting ruled:
o The decision under review should be affirmed in so far it grants compensation for overtime on regular days
(not Sunday and legal holidays) during the period from the date of entrance to duty to May 24, 1947, such
compensation to consists of the amount corresponding to the four hours' overtime at the regular rate and an
additional amount of 25 per cent thereof.
o As to the compensation for work on Sundays and legal holidays, the petitioner should pay to its watchmen the
compensation that corresponds to the overtime (in excess of 8 hours) at the regular rate only, that is, without
any additional amount, thus modifying the decision under review accordingly.
o The watchmen are not entitled to night differential pay for past services, and therefore the decision should be
reversed with the respect thereto.

Issue:
 Whether or not the agreement under which its police force were paid certain specific wages for 12-hour shifts, included
overtime compensation. NO.
 Whether or not Manila Terminal Relief and Mutual Aid Association is barred from recovery by estoppel and laches. NO.
  Whether or not the nullity or invalidity of the employment contract precludes any recovery by the Manila Terminal Relief
and Mutual Aid Association NO.

Ratio:

THE [EMPLOYMENT] AGREEMENT WITH THE WATCHMEN DID NOT INCLUDE OVERTIME COMPENSATION
 The important point stressed by Manila Terminal is that the contract between it and Manila Terminal Relief and Mutual
Aid Association upon the commencement of the employment of its watchmen was to the certain rates of pay, including
overtime compensation:
o beginning September 1945 - the rate of pay is P3 per day for the day shift and P6 per day for night shift
o beginning February 1946 - the rate of pay is P4 per day shift and P6.25 per day for the night shift
 The record does not bear out these allegations. Manila Terminal has relied merely on the facts that its watchmen had
worked on 12-hour shifts at specific wages per day and that no complaint was made about the matter until on March 28,
1947 and on April 29, 1947 (bullet #3).

MANILA TERMINAL RELIEF AND MUTUAL AID ASSOCIATION IS NOT BARRED TO RECOVER THE OVERTIME PAY - NO
ESTOPPEL NOR LACHES
 Especially for positions requiring no special qualifications, applicants would be good as rejected if they ever try to be
inquisitive about the hours of work or the amount of salary, ever attempt to dictate their terms.
 The Manila Terminal's watchmen must have railroaded themselves into their employment, so to speak, happy in the
thought that they would then have an income on which to subsist. But, at the same time, they found themselves required
to work for 12 hours a day. True, there was agreement to work, but can it fairly be supposed that they had the freedom to
bargain in any way, much less to insist in the observance of the Eight Hour Labor Law?
 A contract of employment, which provides for a weekly wage for a specified number of hours, sufficient to cover
both the statutory minimum wage and overtime compensation, if computed on the basis of the statutory
minimum wage, and which makes no provision for a fixed hourly rate or that the weekly wage includes overtime
compensation, does not meet the requirements of the Act.
 Moreover, the Court noted that after the petition had instituted the strict eight-hour shifts, no reduction was made in the
salaries which its watchmen received under the 12-hour arrangement. Indeed, as admitted by the petitioner, "when the
members or the respondent union were placed on strict eight-hour shifts, the lowest salary of all the members of the
respondent union was P165 a month, or P5.50 daily, for both day and night shifts." Although it may be argued that the
salary for the night shift was somewhat lessened, the fact that the rate for the day shift was increased in a sense tends to
militate against the contention that the salaries given during the twelve-hour shifts included overtime compensation.
 Manila Terminal's allegation that the Manila Terminal Relief and Mutual Aid Association had acquiesced in the 12-hour
shifts for more than 18 months, is not accurate, because the watchmen involved in this case did not enter all at once in
the service of the Manila Terminal.
o As Judge Lanting found, "only one of them entered the service of the company on said date, very few during the
rest of said month, some during the rest of that year 1945 and in 1946, and very many in 1947, 1948 and
1949."

DETECTIVE & PROTECTIVE BUREAU INC v. CIR, ET. AL.

 The case at bar is quite on all fours with the case of Detective & Protective Bureau, Inc. vs. Court of Industrial
Relations and United Employees Welfare Association, in which the facts were as follows:
o The record discloses that upon petition properly submitted, said court made an investigation and found that
the members of the United Employees Welfare Association were in the employ of the petitioner Detective and
Protective Bureau, Inc. which is engaged in the business of furnishing security guards to commercial and
industrial establishments, paying to said members monthly salaries out of what it received from the
establishments benefited by guard service.
o The employment called for daily tours of duty for more than eight hours, in addition to work on Sundays and
holidays. Nonetheless the members performed their labors without receiving extra compensation.
o It appears that the Bureau had been granting the members of the Association, every month, "2 days off" days in
which they rendered no service, although they received salary for the whole month. Said Bureau contended
below that the pay corresponding to said 2 day vacation corresponded to the wages for extra work.
o The court rejected the contention because in the contract there was no agreement to that effect; and such
agreement, if any, would probably be contrary to the provisions of the Eight-Hour Law (Act No. 444, sec. 6)
and would be null and void ab initio.
 The only difference is that, while in said case the employees concerned were paid monthly salaries, in the case
now before us the wages were computed daily.

[CONTINUATION OF DISCUSSION ON ESTOPPEL]

 It is argued here, in opposition to the payment, that until the commencement of this litigation the members of the Manila
Terminal Relief and Mutual Aid Association never claimed for overtime pay. That may be true. Nevertheless the law gives
them the right to extra compensation. And they could not be held to have impliedly waived such extra compensation,
for the obvious reason that could not have expressly waived it.
 The principle of estoppel and the laches cannot well be invoked against the Association.
 o it would be contrary to the spirit of the Eight Hour Labor Law where the laborers cannot waive their right to
extra compensation.
o the law principally obligates the employer to observe it, so much so that it punishes the employer for its
violation and leaves the employee or laborer free and blameless.
o the employee or laborer is in such a disadvantageous position as to be naturally reluctant or even
apprehensive in asserting any claim which may cause the employer to devise a way for exercising his right
to terminate the employment.

NULLITY OR INVALIDITY OF EMPLOYMENT CONTRACT DOES NOT BAR RECOVERY

 The argument that the nullity or invalidity of the employment contract precludes recovery by the Manila Terminal Relief
and Mutual Aid Association of any overtime pay is also untenable.
 The argument, based on the supposition that the parties are in pari delicto, was in effect turned down in Gotamo Lumber
Co. vs. Court of Industrial Relations, wherein we ruled:
o The petitioner maintains that as the overtime work had been performed without a permit from the Department
of Labor, no extra compensation should be authorized.
 These decisions were based on the reasoning that both the laborer and employer were duty bound to secure a
permit from the DOLE, thus rendering both parties in pari delicto.
 However the present law in effect imposed that duty upon the employer. Such employer may not therefore be
heard to plead his own neglect as exemption or defense.
 The employee in rendering extra service at the request of his employer has a right to assume that the latter has
complied with the requirement of the law, and therefore has obtained the required permission from the DOLE.
 Moreover, the Eight-Hour Law (Commonwealth Act No. 444), in providing that “any agreement or contract between the
employer and the laborer or employee contrary to the provisions of this Act shall be null avoid ab initio," obviously
intended said provision for the benefit of the laborers or employees.
 The employer cannot, therefore, invoke any violation of the act to exempt him from liability for extra compensation. This
conclusion is further supported by the fact that the law makes only the employer criminally liable for any violation. It
cannot be pretended that, for the employer to commit any violation of the Eight-Hour Labor Law, the participation or
acquiescence of the employee or laborer is indispensable.

Dispositive: WHEREFORE, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being understood that the
petitioner's watchmen will be entitled to extra compensation only from the dates they respectively entered the service of the
petitioner, hereafter to be duly determined by the Court of Industrial Relations.
San Juan De Dios Hospital Employees Association v. NLRC, November 28, 1997 — NAVARRO
G.R. No. 126383 | November 28, 1997 | FRANCISCO, J.
Petitioners: SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA. CONSUELO MAQUILING, LEONARDO
MARTINEZ, DOMINGO ELA, JR., RODOLFO CALUCIN, JR., PERLA MENDOZA, REX RAPHAEL REYES, ROGELIO BELMONTE,
AND 375 OTHER EMPLOYEE-UNION MEMBERS
Respondents: NATIONAL LABOR RELATIONS COMMISSION, AND SAN JUAN DE DIOS HOSPITAL

Recit-ready Digest + Doctrine:

The rank-and-file employee-union officers and members of San Juan De Dios Hospital Employees Association sent a letter with
attached support signatures requesting and pleading for the expeditious implementation and payment by respondent Juan De
Dios Hospital "of the 40 HOURS/5-DAY WORKWEEK with compensable weekly two days off provided for by Republic Act
5901 as clarified for enforcement by the Secretary of Labor’s Policy Instructions No. 54 . Respondent hospital failed to give
a favorable response; thus, petitioner Union filed a complaint regarding their claims for statutory benefits under the above-cited
law and policy issuance. WON Policy Instructions No. 54 is valid - NO

Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901. Reliance on Republic Act No. 5901 is misplaced
for the said statute has long been repealed with the passage of the Labor Code. Accordingly, only Article 83 of the Labor
Code which appears to have substantially incorporated or reproduced the basic provisions of Republic Act No. 5901 may support
Policy Instructions No. 54 on which the latter’s validity may be gauged. Article 83 of the Labor Code states: “Health personnel in
cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at
least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for
meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours , in
which case they shall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for work on
the sixth day.” A cursory reading of Article 83 of the Labor Code betrays petitioners position that hospital employees are entitled
to a full weekly salary with paid two days off if they have completed the 40-hour/5-day workweek. What Article 83 merely
provides are: (1) the regular office hour of eight hours a day, five days per week for health personnel, and (2) where the
exigencies of service require that health personnel work for six days or forty-eight hours then such health personnel shall be
entitled to an additional compensation of at least thirty percent of their regular wage for work on the sixth day. There is nothing
in the law that supports then Secretary of Labors assertion that personnel in subject hospitals and clinics are entitled to a full
weekly wage for seven days if they have completed the 40-hour/5-day workweek in any given workweek. Hence, the Secretary of
Labor exceeded his authority by including a two days off with pay in contravention of the clear mandate of the statute.
Additionally, administrative interpretation of the law is at best merely advisory.

Facts:
 The rank-and-file employee-union officers and members of San Juan De Dios Hospital Employees Association sent a letter
with attached support signatures requesting and pleading for the expeditious implementation and payment by
respondent Juan De Dios Hospital "of the 40 HOURS/5-DAY WORKWEEK with compensable weekly two days off
 provided for by Republic Act 5901 as clarified for enforcement by the Secretary of Labor’s Policy Instructions No.
54
Policy Instruction No. 54
Subject: Working Hours and Compensation of Hospital/Clinic Personnel

This issuance clarifies the enforcement policy of this Department on the working hours and compensation of personnel employed by
hospital/clinics with a bed capacity of 100 or more and those located in cities and municipalities with a population of one million or
more.

Republic Act 5901 took effect on 21 June 1969 prescribes a 40-hour/5 day work week for hospital/clinic personnel. At the same
time, the Act prohibits the diminution of the compensation of these workers who would suffer a reduction in their weekly wage by
reason of the shortened workweek prescribed by the Act. In effect, RA 5901 requires that the covered hospital workers who used to
work seven days a week should be paid for such number of days for working only 5 days or 40 hours a week.

The evident intention of RA 5901 is to reduce the number of hospital personnel, considering the nature of their work, and at
the same time guarantee the payment to them of a full weekly wage for seven days.

xxx

Consistent with such spirit and intent, it is the position of the Department that personnel in subject hospital and clinics are entitled
to a full weekly wage for seven days it they have completed the 40-hours/5-day workweek in any given workweek.

 Respondent hospital failed to give a favorable response; thus, petitioner Union filed a complaint regarding their claims for
statutory benefits under the above-cited law and policy issuance
 LA dismissed petition. NLRC affirmed.

Issue/s:
 WON Policy Instructions No. 54 is valid - NO

Ratio:
 Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901, otherwise known as An Act Prescribing
Forty Hours A Week Of Labor For Government and Private Hospitals Or Clinic Personnel
 Reliance on Republic Act No. 5901 is misplaced for the said statute has long been repealed with the passage of the
Labor Code
 Accordingly, only Article 83 of the Labor Code which appears to have substantially incorporated or reproduced the basic
provisions of Republic Act No. 5901 may support Policy Instructions No. 54 on which the latter’s validity may be gauged.
Article 83 of the Labor Code states:
Art. 83. Normal Hours of Work. -- The normal hours of work of any employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a
bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive
of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48)
hours, in which case they shall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for
work on the sixth day. For purposes of this Article, health personnel shall include: resident physicians, nurses, nutritionists,
dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all
other hospital or clinic personnel.
 A cursory reading of Article 83 of the Labor Code betrays petitioners position that hospital employees are entitled to a full
weekly salary with paid two (2) days off if they have completed the 40-hour/5-day workweek. What Article 83 merely
provides are: (1) the regular office hour of eight hours a day, five days per week for health personnel, and (2) where the
exigencies of service require that health personnel work for six days or forty-eight hours then such health personnel shall
be entitled to an additional compensation of at least thirty percent of their regular wage for work on the sixth day.
 There is nothing in the law that supports then Secretary of Labors assertion that personnel in subject hospitals and clinics
are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-day workweek in any given
workweek.
 The Secretary of Labor exceeded his authority by including a two days off with pay in contravention of the clear mandate
of the statute. Additionally, administrative interpretation of the law is at best merely advisory.

Assuming arguendo that Republic Act No. 5901 has neither been amended nor repealed by the Labor Code:
 Policy Instructions No. 54 is still invalid. A perusal of Republic Act No. 5901 reveals nothing therein that gives two days off
with pay for health personnel who complete a 40-hour work or 5-day workweek.
 In fact, the Explanatory Note of House Bill No. 16630 (which later became RA 5901) explicitly states that the bills sole
purpose is to shorten the working hours of health personnel and not to dole out a two days off with pay, to wit: “ The fact
that these hospitals and health clinic personnel perform duties which are directly concerned with the health and lives of
our people does not mean that they should work for a longer period than most employees and laborers. They are also
entitled to as much rest as other workers. Making them work longer than is necessary may endanger, rather than protect,
the health of their patients. Besides, they are not receiving better pay than the other workers. Therefore, it is just and fair
that they be made to enjoy the privileges of equal working hours with other workers except those excepted by law.”
 Further, petitioners' position is also negated by the very rules and regulations promulgated by the Bureau of Labor
Standards which implement Republic Act No. 5901: “Section 7. Regular Working Day. The regular working days of
covered employees shall be not more than five days in a workweek. The workweek may begin at any hour and on any day,
including Saturday or Sunday, designated by the employer. xxx Employers are not precluded from changing the time at
 which the workday or workweek begins, provided that the change is not intended to evade the requirements of these
regulations on the payment of additional compensation.” “Section 15. Additional Pay Under the Act and C.A. No. 444.
(a) Employees of covered hospitals and clinics who are entitled to the benefits provided under the Eight-Hour Labor Law,
as amended, shall be paid an additional compensation equivalent to their regular rate plus at least twenty-five percent
thereof for work performed on Sunday and Holidays, not exceeding eight hours, such employees shall be entitled to an
additional compensation of at least 25% of their regular rate.”

Dispositive:
WHEREFORE, the decision appealed from is AFFIRMED. No costs.
SO ORDERED.

Rada v. NLRC, January 9, 1992 — REGADO

G.R. No. 96078 |January 9, 1992 | REGALADO
Petitioners: HILARIO RADA
Respondents: NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR CONSULTANTS AND PLANNERS,
INC.,

Recit-ready Digest + Doctrine:

In 1977 Rada was contracted by Philnor as a driver for the construction of the Manila North Expressway Extention. He was
tasked to drive employees to and from the field office in Pampanga. The office hours observed were from 7:00 am to 4:00 pm,
Mondays to Saturdays. Rada was likewise allowed to bring home the company vehicle to provide a timely transportation service.
The time used by the petitioner to and from his residence to the project was from 5:30 am to 7:00 am and from 4:00pm to
6:00pm. His initial contract was only for a period of 24 months but Rada and Philnor further entered into two more contracts
because of his satisfactory performance and because the project was still not completed and there was still a need for a driver.
However on 1985 his contract expired and he was made to sign a release, waiver and quit claim. On 1987, he filed a complaint for
non-payment of separation pay and over time pay.

ISSUE: WON entitled to separation pay and Overtime pay

HELD:
SP-NO, OTP-YES
Separation pay:
It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the fact that his services were
rendered only for a particular project which took that same period of time to complete categorizes him as a project employee.
Petitioner was employed for one specific project.Project employees are not entitled to termination pay if they are terminated as a
result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in
which they have been employed by a particular construction company

Overtime pay:
The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them
off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to
Rada's job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of
the employees, but primarily for the benefit of Philnor, the employer.Since the assigned task of fetching and delivering employees
is indispensable and consequently mandatory, then the time required of and used by petitioner in going from his residence to the
field office and back, that is, from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter rounded
off as averaging three hours each working day, should be paid as overtime work. Quintessentially, petitioner should be given
overtime pay for the three excess hours of work performed during working days from January, 1983 to December, 1985.

Facts:
In 1977, Rada was contracted by Philnor Consultants and Planners, Inc.He was hired as a driver for the construction supervision
phase of Manila North Expressway Extension. His task was to drive the employees hired to work at the MNEE Stage 2 Project to and
from the field office at Sto. Domingo Interchange, Pampanga; the office hours observed in the project were from 7:00 a.m. to 4:00
p.m. Mondays to Saturdays; The time used by the petitioner to and from his residence to the project site was from 5:30 am to 7:00
am and from 4:00pm to 6:00 pm . He was allowed to bring home the company’s vehicle in order to provide a timely transportation
service to the other workers He used the vehicle to pick up and drop off some employees along EDSA on his way home from
Marikina.The contract he initially signed was for 24 months but, it was renewed for two more times through the execution of
contracts of employment. The third contract of employment was subsequently extended for a number of times, the last extention
was from October 1,1985 to December 31,1985.
Sometime in the 2nd week of December 1985, petitioner applied for Personnel Clearance" with Respondent dated December 9, 1985
and acknowledged having received the amount of P3,796.20 representing conversion to cash of unused leave credits and financial
assistance. Petitioner also released Respondent from all obligations and/or claims, etc. in a "Release, Waiver and Quitclaim" . . .
On 1987, the petitioner filed before the NLRC a complaint for non-payment of separation pay and over time pay.
In its defense, Philnor claims that that petitioner was not illegally terminated since the project for which he was hired was
completed; that he was hired under three distinct contracts of employment, each of which was for a definite period, all within the
estimated period of MNEE Stage 2 Project, covering different phases or areas of the said project; that his work was strictly confined
to the MNEE Stage 2 Project and that he was never assigned to any other project of Philnor; that he did not render overtime services
and that there was no demand or claim for him for such overtime pay; that he signed a "Release, Waiver and Quitclaim" releasing
Philnor from all obligations and claims; and that Philnor's business is to provide engineering consultancy services, including
supervision of construction services, such that it hires employees according to the requirements of the project manning schedule of
a particular contract. Philnor further claims that Rada did not render overtime work, as he merely enjoyed the benefit and
convenience of free transportation, otherwise without the vehicle, he would have used at least four hours by using public
transportation and spent P12.00 for daily fare.
The petitioner amended his complaint alleging that he was illegally dismissed and that he was not paid overtime pay although he
was made to render three hours overtime work form Monday to Saturday for a period of three years.
LA: Ordered the respondent company to reinstate the complainant and to pay overtime pay in for the three excess hours of work
performed during working days.
NLRC: Reversed the LA and dismissed the petitioner’s complaint.
ISSUE:
Whether or not Rada is entitled to separation pay and OT pay.
HELD:
Separation pay–NO. ‘; Overtime pay–Yes.
Separation Pay
The SC ruled that Rada was a project employee whose work was coterminous with the project for which he was hired.
It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the fact that his services were
rendered only for a particular project which took that same period of time to complete categorizes him as a project employee.
Petitioner was employed for one specific project.
Project employees, as distinguished from regular or non-project employees, are mentioned in Section 281 of the Labor Code as those
'where the employment has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee.' Project employees are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain
clearance from the Secretary of Labor in connection with such termination.'

OT Pay
Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the
project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not
merely incidental to Rada's job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the
convenience of the employees, but primarily for the benefit of Philnor, the employer.
As embodied in Philnor’s memorandum, they allowed their drivers to bring home their transport vehicles in order for them to
provide a timely transport service and to avoid delay–not reallyso that the drivers could enjoy the benefits of the company vehicles
nor for them to save on fair.
Private respondent does not hesitate to admit that it is usually the project driver who is tasked with picking up or dropping off his
fellow employees. Proof thereof is the undisputed fact that when petitioner is absent, another driver is supposed to replace him and
drive the vehicle and likewise pick up and/or drop off the other employees at the designated points on EDSA.
Since the assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time required of
and used by petitioner in going from his residence to the field office and back, that is, from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m.
to around 6:00 p.m., which the labor arbiter rounded off as averaging three hours each working day, should be paid as overtime
work. Quintessentially, petitioner should be given overtime pay for the three excess hours of work performed during working days
from January, 1983 to December, 1985.

University of Pangasinan Faculty Union v. University of Pangasinan, February 20, 1984 — RELUCIO
G.R. No. | Date | Ponente
Petitioners: UNIVERSITY OF PANGASINAN FACULTY UNION
Respondents: UNIVERSITY OF PANGASINAN and NATIONAL LABOR RELATIONS COMMISSION

Recit-ready Digest + Doctrine:

Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan. Petitioner filed a complaint
against the private respondent for the non-payment of Emergency Cost of Living Allowances (ECOLA) for November 7 to
December 5, 1981, during the semestral break. The private respondent claims that the teachers are not entitled thereto because
the semestral break is not an integral part of the school year and there being no actual services rendered by the teachers during
said period, the principle of "No work, no pay" applies.

SC ruled that petitioners are entitled to ECOLA. Petitioners find themselves in a most peculiar situation whereby they are forced
to go on leave during semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees'
control. As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be
made from monthly allowances.
Applying by analogy the principle enunciated in the Omnibus Rules Implementing the Labor Code to wit:
Sec. 4. Principles in Determining Hours Worked. — The following general principles shall govern in determining
whether the time spent by an employee is considered hours worked for purposes of this Rule:
xxx xxx xxx
"(d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be
considered time either if the imminence of the resumption of work requires the employee's presence at the place of
work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest."
The petitioner's members in the case at bar, are exactly in such a situation. The semestral break scheduled is an interruption
beyond petitioner's control and it cannot be used "effectively nor gainfully in the employee's interest'. Thus, the semestral break
may also be considered as "hours worked."

Facts:
 Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan
 Petitioner filed a complaint against the private respondent with the Arbitration Branch of the NLRC. The complaint seeks:
(a) the payment of Emergency Cost of Living Allowances (ECOLA) for November 7 to December 5, 1981, a semestral
break; (b) salary increases from the sixty (60%) percent of the incremental proceeds of increased tuition fees; and (c)
payment of salaries for suspended extra loads.
  In November and December, 1981, the petitioner's members were fully paid their regular monthly salaries. However, from
November 7 to December 5, during the semestral break, they were not paid their ECOLA.
 The private respondent claims that the teachers are not entitled thereto because the semestral break is not an integral
part of the school year and there being no actual services rendered by the teachers during said period, the principle of "No
work, no pay" applies.

Issue/s:
 W/N the petitioner’s members are entitled to ECOLA during the semestral break - YES

Ratio:
 The various Presidential Decrees on ECOLAs to wit: PD's 1614, 1634, 1678 and 1713, provide on "Allowances of Fulltime
Employees . . ." that "Employees shall be paid in full the required monthly allowance regardless of the number of their
regular working days if they incur no absences during the month. If they incur absences without pay, the amounts
corresponding to the absences may be deducted from the monthly allowance . . ."; and on "Leave of Absence Without Pay",
that "All covered employees shall be entitled to the allowance provided herein when they are on leave of absence with
pay."
 It is beyond dispute that the petitioner's members are full-time employees receiving their monthly salaries irrespective of
the number of working days or teaching hours in a month. However, they find themselves in a most peculiar situation
whereby they are forced to go on leave during semestral breaks. These semestral breaks are in the nature of work
interruptions beyond the employees' control.
 As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be made
from monthly allowances. The "No work, no pay" principle does not apply in the instant case. The petitioner's members
received their regular salaries during this period. It is clear from the aforequoted provision of law that it contemplates a
"no work" situation where the employees voluntarily absent themselves.
 Respondent's contention that "the fact of receiving a salary alone should not be the basis of receiving ECOLA", is, likewise,
without merit. Particular attention is brought to the Implementing Rules and Regulations of Wage Order No. 1 to wit.
o SECTION 5. Allowance for Unworked Days. —
"a) All covered employees whether paid on a monthly or daily basis shall be entitled to their daily living
allowance when they are paid their basic wage."
 It is evident that the intention of the law is to grant ECOLA upon the payment of basic wages. Petitioners cannot be
considered to be on leave without pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners were paid
their wages in full for the months of November and December of 1981, notwithstanding the intervening semestral break.
 Although said to be on forced leave, professors and teachers are, nevertheless, burdened with the task of working during a
period of time supposedly available for rest and private matters. There are papers to correct, students to evaluate,
deadlines to meet, and periods within which to submit grading reports.
 Although they may be considered by the respondent to be on leave, the semestral break could not be used effectively for
the teacher's own purposes for the nature of a teacher's job imposes upon him further duties which must be done during
the said period of time.

 We may also by analogy apply the principle enunciated in the Omnibus Rules Implementing the Labor Code to wit:
o Sec. 4. Principles in Determining Hours Worked. — The following general principles shall govern in
determining whether the time spent by an employee is considered hours worked for purposes of this Rule:
xxx xxx xxx
"(d) The time during which an employee is inactive by reason of interruptions in his work beyond his control
shall be considered time either if the imminence of the resumption of work requires the employee's presence at
the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own
interest."
 The petitioner's members in the case at bar, are exactly in such a situation. The semestral break scheduled is an
interruption beyond petitioner's control and it cannot be used "effectively nor gainfully in the employee's interest'. Thus,
the semestral break may also be considered as "hours worked."

 For this, the teachers are paid regular salaries and, for this, they should be entitled to ECOLA. Not only do the teachers
continue to work during this short recess but much less do they cease to live for which the cost of living allowance is
intended.

Dispositive:
WHEREFORE the petition for certiorari is hereby GRANTED. The private respondent is ordered to pay its regular fulltime
teachers/employees emergency cost of living allowances for the semestral break from November 7 to December 5, 1981 and the
undistributed balance of the sixty (60%) percent incremental proceeds from tuition increases for the same school year as outlined
above. The respondent Commission is sustained insofar as it DENIED the payment of salaries for the suspended extra loads on
September 21, 1981.

Note:
Issue on W/N 60% of the incremental proceeds of the increased tuition fees shall be devoted exclusively to salary increase - Yes
The sixty (60%) percent incremental proceeds from the tuition increase are to be devoted entirely to wage or salary
increases which means increases in basic salary. The law cannot be construed to include allowances which are benefits
 over and above the basic salaries of the employees. To charge such benefits to the 60% incremental proceeds would be to
reduce the increase in basic salary provided by law.
Issue on W/N alleged payment of salaries for extra loads on Sept 21, 1981, was proven by substantial evidence- Yes, based on
payroll submitted
Involves question of fact already determined by NLRC. Assuming arguendo, however, that the petitioners have not been
paid for these extra loads, they are not entitled to payment following the principles of "No work, no pay". Extra loads
should be paid for only when actually performed by the employee. Compensation is based, therefore, on actual work done
and on the number of hours and days spent over and beyond their regular hours of duty. Since there was no work on
September 21, 1981, it would now be unfair to grant petitioner's demand for extra wages on that day.

National Shipyards and Steel Corporation v. CIR, December 30, 1961 — RIOFLORIDO
G.R. No. L-17068 | December 30, 1961 | REYES, J.B.L.
Petitioners: NATIONAL SHIPYARDS AND STEEL CORPORATION
Respondents: COURT OF INDUSTRIAL RELATIONS and DOMINADOR MALONDRAS

Recit-ready Digest:
The petitioner National Shipyards and Steel Corporation (NASSCO), a GOCC, is the owner of several barges and tugboats used in
the transportation of cargoes and personnel in connection with its business of shipbuilding and repair. It required its bargemen
to stay in their respective barges—or to be detailed on board—so they could be called to duty at any time. 39 crew members of
petitioner's tugboat service, including therein respondent Dominador Malondras, filed with the CIR a complaint for the payment
of overtime compensation. NASSCO admitted it did not pay for the OT compensation. The CIR issued an order directing the court
examiner to compute the OT compensation due the claimants. The CIR found that Malondras and the others has rendered an
average OT service of five hours each day for certain period. Upon order by the Court, all the claimants, including Malondras,
were paid their overtime compensation by the NASSCO. The court examiner submitted his second partial report covering another
period, again giving each crewman an average of five OT hours each day. Malondras was not, however, included in this report as
his daily time sheets were not then available. Again upon approval by the Court, the crewmen concerned were paid their OT
compensation. Because of his exclusion from the second report of the examiner, Malondras asked the CIR to order for his
compensation. NASSCO opposed Malondras arguing that its records do not indicate the actual number of working hours rendered
by him. After examining the documents, the chief examiner credited Malondras five OT hours for the period in question. The
Court ordered the examiner to make a re-examination of the records with a view to determining Malondras' total overtime
service from two periods. After looking at the documents, the examiner, this time, credited Malondras a total of 16 OT hours a
day.
The NASSCO moved for reconsideration, which was denied by the Court en banc. Whereupon, the NASSCO appealed to the SC.

W/N Malondras should be credited for 16 hours of OT for being “detailed on board” — NO

The court examiner interpreted the words "Detail" or "Detailed on Board" to mean that as long as respondent Malondras was in
his barge for twenty-four hours, he should be paid overtime for sixteen hours a day or the time in excess of the legal eight
working hours that he could not leave his barge. SC did not agree with the CIR that respondent Malondras should be paid OT
compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day,
irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by
the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living
quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their
employers to pay them overtime even when they are not actually working; otherwise, every sailor on board a vessel would be
entitled to overtime for sixteen hours each day, even if he had spent all those hours resting or sleeping in his bunk, after his
regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore,
whether they were on board and cannot leave ship beyond the regular eight working hours a day, but whether they actually
rendered service in excess of said number of hours.

While Malondras' daily time sheets do not show his actual working hours, nevertheless, petitioner has already admitted in the
Stipulation of Facts in this case that Malondras and his co-claimants did render service beyond eight hours a day when so
required by the exigencies of the service; and in fact, Malondras was credited and already paid for five hours daily overtime work
during the period covered by the first report of the examiner. Since Malondras has been at the same job since 1954, it can be
reasonably inferred that the overtime service he put in whenever he was required to be aboard his barge all day from 1954 to
1957 would be more or less consistent. In truth, the other claimants who served with Malondras under the same conditions and
period have been finally paid for an overtime of 5 hours a day, and no substantial difference exists between their case and the
present one, which was not covered by the same award only because Malondras' time records not found until later.

Doctrine:
The correct criterion in determining whether or not sailors are entitled to overtime pay is not whether they were on board and
can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said
number of hours.

Facts:
 Petitioner National Shipyards and Steel Corporation (NASSCO), a GOCC, is the owner of several barges and tugboats used
in the transportation of cargoes and personnel in connection with its business of shipbuilding and repair.
o In order that its bargemen could immediately be called to duty whenever their services are needed, they are
required to stay in their respective barges, for which reason they are given living quarters therein as well as
subsistence allowance of P1.50 per day during the time they are on board.
o However, upon prior authority of their superior officers, they may leave their barges when said barges are idle.
  April 15, 1957 — 39 crew members of petitioner's tugboat service, including herein respondent Dominador Malondras,
filed with the Industrial Court a complaint for the payment of overtime compensation.
o In the course of the proceeding, the parties entered into a stipulation of facts wherein the NASSCO recognized
and admitted:
 4. That to meet the exigencies of the service in the performance of the above work, petitioners have
to work when so required in excess of eight (8) hours a day and/or during Sundays and legal
holidays (actual overtime service is subject to determination on the basis of the logbook of the
vessels, time sheets and other pertinent records of the respondent).
 xxx xxx xxx
 6. The petitioners are paid by the respondent their regular salaries and subsistence allowance,
without additional compensation for overtime work;"
 November 22, 1957 — Pursuant to the above stipulation, the Industrial Court issued an order
directing the court examiner to compute the overtime compensation due the claimants.
 February 14, 1958 — the court examiner submitted his report covering the period from January 1 to
December 31, 1957.
o In said report, the examiner found that the petitioners in the, including herein respondent Dominador
Malondras, rendered an average overtime service of 5 hours each day for the period aforementioned, and upon
approval of the report by the Court, all the claimants, including Malondras, were paid their overtime
compensation by the NASSCO.
 April 30, 1958 — the court examiner submitted his second partial report covering the period from
January 1, 1954 to December 31, 1956, again giving each crewman an average of 5 overtime hours
each day.
o Respondent Malondras was not, however, included in this report as his daily time sheets were not then
available.
o Again upon approval by the Court, the crewmen concerned were paid their overtime compensation.
 September 18, 1959 — Because of his exclusion from the second report of the examiner, and his time
sheets having been located in the meantime, Dominador Malondras filed petitions in the same case
asking for the computation and payment of his overtime compensation for the period from January
1, 1954 to December 31, 1956, and from January to April 30, 1957 which, he alleged, was not
included in the first report of the examiner because his time sheets for these months could not be
found at the time.
o Malondras' petition was opposed by the NASSCO upon the argument, among others, that its records do not
indicate the actual number of working hours rendered by Malondras during the periods in question.
o Acting on the petition and opposition, the Industrial Court ordered the examiner to examine the log books,
daily time sheets, and other pertinent records of the corporation for the purpose of determining and computing
whatever overtime service Malondras had rendered from January 1, 1954 to December 31, 1956.
 January 15, 1960 — the chief examiner submitted a report crediting Malondras with a total of 4,349
overtime hours from January 1, 1954 to December 31, 1956, at an average of 5 overtime hours a day,
and after deducting the aggregate amount of subsistence allowance received by Malondras during
this period, recommended the payment to him of overtime compensation in the total sum of
P2,790.90.
 February 20, 1960 — the Court ordered the examiner to make a re-examination of the records with a
view to determining Malondras' overtime service from January 1, 1954 to December 31, 1956, and
from January 1, 1957 to April 30, 1957, but without deducting from the compensation to be paid to
him his subsistence allowance.
o Pursuant to this last order, the examiner, on April 23, 1960, submitted an amended report giving Malondras an
average of 16 overtime hours a day, on the basis of his time sheets, and recommending the payment to him of
the total amount of P15,242.15 as overtime compensation during the periods covered by the report.
o This report was, over the NASSCO's vigorous objections, approved by the Court below on May 6, 1960.
o The NASSCO moved for reconsideration, which was denied by the Court en banc, with one judge dissenting.
Whereupon, the NASSCO appealed to the SC.

Issue/s:
 W/N Malondras should be credited for 16 hours of OT for being “detailed on board” — NO
 W/N the subsistence allowance received by Malondras for the periods covered by the report in question should be
deducted from his overtime compensation — NO

Ratio:
1st Issue:
 Matter determined here: the number of hours of overtime for which Malondras should be paid for the periods January 1,
1954 to December 31, 1956, and from January to April 30, 1957.
o Respondents urge that this is a question of fact and not subject to review by this Court, there being sufficient
evidence to support the Industrial Court's ruling on this point.
o It appears, however, that in crediting Malondras with 16 hours of overtime service daily for the periods in
question, the court examiner relied only on his daily time sheets which, although approved by petitioner's
officers in charge and its auditors, do not show the actual number of hours of work rendered by him each day
but only indicate, according to the examiner himself, that:
  "almost everyday Dominador Malondras was on 'Detail' or 'Detailed on Board'. According to the
officer in charge of Dominador Malondras, when he (Dominador Malondras) was on 'Detail' or
'Detailed on Board', he was in the boat for twenty-four (24) hours."
o In other words, the court examiner interpreted the words "Detail" or "Detailed on Board" to mean that as long
as respondent Malondras was in his barge for twenty-four hours, he should be paid overtime for sixteen hours
a day or the time in excess of the legal eight working hours that he could not leave his barge.
 Petitioner NASSCO, upon the other hand, argues that the mere fact that Malondras was required to
be on board his barge all day so that he could immediately be called to duty when his services
were needed does not imply that he should be paid overtime for sixteen hours a day, but that he
should receive compensation only for the actual service in excess of eight hours that he can prove.
This question is clearly a legal one that may be reviewed and passed upon by this Court.
 We can not agree with the Court below that respondent Malondras should be paid overtime compensation for every hour
in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he
actually put in work during those hours.
o Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason
that, in addition to their regular compensation, they are given free living quarters and subsistence allowances
when required to be on board.
o It could not have been the purpose of our law to require their employers to pay them overtime even when they
are not actually working:
 otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day,
even if he had spent all those hours resting or sleeping in his bunk, after his regular tour of duty.
o The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore,
whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether
they actually rendered service in excess of said number of hours.
o Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union
 The correct criterion in determining whether or not sailors are entitled to overtime pay is not
whether they were on board and can not leave ship beyond the regular eight working hours a day,
but whether they actually rendered service in excess of said number of hours.
 While Malondras' daily time sheets do not show his actual working hours, nevertheless, petitioner has already admitted in
the Stipulation of Facts in this case that Malondras and his co-claimants did render service beyond 8 hours a day when so
required by the exigencies of the service;
o and in fact, Malondras was credited and already paid for 5 hours daily overtime work during the period from
May 1 to December 31, 1957, under the examiner's first report.
o Since Malondras has been at the same job since 1954, it can be reasonably inferred that the overtime service he
put in whenever he was required to be aboard his barge all day from 1954 to 1957 would be more or less
consistent.
o In truth, the other claimants who served with Malondras under the same conditions and period, have been
finally paid for an overtime of 5 hours a day, and no substantial difference exists between their case and the
present one, which was not covered by the same award only because Malondras' time records were not found
until later.

2nd Issue:
 The Stipulation of the Facts of the parties show that this allowance is independent of and has nothing to do with whatever
additional compensation for overtime work was due the petitioner NASSCO's bargemen.
o According to the petitioner itself, the reason why their bargemen are given living quarters in their barges and
subsistence allowance at the rate of P1.50 per day was because they were required to stay in their respective
barges in order that they could be immediately called to duty when their services were needed.
o Petitioner having already paid Malondras and his companions overtime for 1957 without deduction of the
subsistence allowances received by them during this period, and Malondras' companions having been paid
overtime for the other years also without deducting their subsistence allowances, there is no valid reason why
Malondras should be singled out now and his subsistence allowance deducted from the overtime compensation
still due him.

 Records should be reexamined to find out Malondras' exact daily wage from January 1, 1954 to September, 1954, and his
overtime compensation for these months computed on the basis thereof.

Dispositive:
WHEREFORE, the order appealed from is modified in the sense that respondent Malondras should be credited five (5) overtime
hours instead of sixteen (16) hours a day for the periods covered by the examiner's report. The court below is ordered to determine
from the records the exact daily wage received by respondent Malondras from January 1, 1954 to September, 1954, and to compute
accordingly his overtime compensation for that period. In all other respects, the judgment appealed from is affirmed. No costs in this
instance. So ordered.
National Development Co. v. CIR, November 30, 1962 — SAN DIEGO
G.R. No. L-15422 | November 30, 1962 | REGALA, J.
Petitioners: NATIONAL DEVELOPMENT COMPANY
Respondents: COURT OF INDUSTRIAL RELATIONS and NATIONAL TEXTILE WORKERS UNION

Recit-ready Digest + Doctrine:

 NDC’s employees were divided into 4 shifts with 1 hr of mealtime in between shifts. number of hours. However, whenever
workers in one shift were required to continue working until the next shift, NDC, instead of crediting them with eight hours of
overtime work, has been paying them for six hours only, claiming that the two hours corresponding to the mealtime periods
should not be included in computing compensation. SC disagrees with NDC. It ruled that the mealtime breaks should be included
because the work was continuous and that the employees were not even allowed to leave the premises.

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

Facts:
 At the National Development Co. (NDC), a government-owned and controlled corporation, there were four shifts of work:
1. from 8 a.m. to 4 p.m.,
2. from 6 a.m. to 2 p.m.;
3. from 2 p.m. to 10 p.m.
4. from 10 p.m. to 6 a.m.
 In each shift, there was a one-hour mealtime period:
1. from (1) 11 a.m. to 12 noon for those working between 6 a.m. and 2 p.m. and
2. from (2) 7 p.m. to 8 p.m. for those working between 2 p.m. and 10 p.m.
 Although there was a one-hour mealtime, NDC nevertheless credited the workers with eight hours of work for each shift
and paid them for the same number of hours.
 However, since 1953, whenever workers in one shift were required to continue working until the next shift, NDC,
instead of crediting them with eight hours of overtime work, has been paying them for six hours only, claiming
that the two hours corresponding to the mealtime periods should not be included in computing compensation
 National Textile Workers Union naturally opposed and asked the CIR to order the payment of additional overtime pay
corresponding to the mealtime periods.
 CIR ruled in favor of the Union holding that mealtime should be counted in the determination of overtime work
because workers could not leave their places of work and rest completely during those hours; and accordingly it
ordered NDC to pay the employees by way of overtime compensation. NDC's MR was denied
 NDC also argued that CIR lost its jurisdiction over claims for overtime pay upon the enactment of the Industrial Peace Act
(RA No. 875)

Issue/s:
 Whether the CIR has jurisdiction - YES
 Whether the mealtime breaks should be considered working time - YES

Ratio:

1. The CIR still has jurisdiction

 For such jurisdiction to come into play, the following requisites must be complied with:
(a) there must exist between the parties an employer-employee relationship or the claimant must seek his reinstatement;
and
(b) the controversy must relate to a case certified by the President to the CIR as one involving national interest, or must
have a bearing on an unfair labor practice charge, or must arise either under the Eight-Hour Labor Law, or under the
Minimum Wage Law.
 In default of any of these circumstances, the claim becomes a mere money claim that comes under the jurisdiction of the
regular courts.
 Here, NDC does not deny the existence of an employer-employee relationship between it and the members of the union.
Neither is there any question that the claim is based on the Eight-Hour Labor Law

2. Mealtime breaks should be considered working time because the work was continuous
 According to the Eight-Hour Labor Law:
"The legal working day for any person employed by another shall be of not more than eight hours daily. When the work is
not continuous, the time during which the laborer is not working and can leave his working place and can rest completely
shall not be counted."
 The idle time that an employee may spend for resting and during which he may leave the spot or place of work though not
the premises of his employer, is not counted as working time only where the work is broken or is not continuous.
 No general rule can be laid down as to what constitutes compensable work, but rather depends upon the particular
circumstances, to be determined by the courts
 In this case, work in NDC was continuous and did not permit employees and laborers to rest completely
 it is well-nigh impossible for an employee to work while he is eating, yet under the Eight Hour Labor Law, such a time for
eating can only be segregated or deducted from his work, if the same is not continuous and the employee can leave his
working place and rest completely. The time cards show that the work was continuous and without interruption.
 There is also the evidence adduced by the NDC that the employees cannot freely leave their working places nor rest
completely.
 Also, during the period covered by the computation, the work was on a 24 hour basis and as previously stated divided into
shifts.
Another reason for NDC's petition to be dismissed is: NDC's motion for reconsideration has been dismissed for its failure to serve a
copy of the same on the union. Thus there is no decision of the CIR en banc that NDC can bring to this Court for review.

Dispositive:
WHEREFORE, the order of March 19, 1959 and the resolution of April 27, 1959 are hereby affirmed and the appeal is dismissed,
without pronouncement as to costs. )
Sime Darby Pilipinas v. NLRC, April 15, 1998 — SIQUIAN
G.R. No. 119205 | April 15, 1998 | Bellosillo
Petitioners: Sime Darby Pilipinas, Inc.
Respondents: National Labor Relations Commission (2nd Division) and Sime Darby Salaried Employees Association (ALU-TUCP)

Recit-ready Digest + Doctrine:

Sime Darby Salaried Employees Association, an association of monthly salaried employees, filed a complaint against Sime Darby
Pilipinas. It alleged that the change in work schedule as well as the removal of the 30-minute paid on call lunch break of the
monthly salaried employees constitute unfair labor practice and is discriminatory. The LA and the NLRC dismissed the complaint
as this was a valid exercise of management prerogative. Upon MR, the NLRC reversed its decision because it deprived the workers
of benefits resulting in an unjust diminution of company privileges. The SC held that the change in work schedule is a valid
exercise of management prerogative. It complies with the 8-hour work period provided for in the Code and even gave the
employees 1 full hour of break without interruption by the employer. Further, it applied to all employees similarly situated. The
SC also stated that so long as such prerogative is exercised in good faith by the employer, the same will be upheld by the Courts.

Facts:
 Sime Darby Pilipinas, Inc. is engaged in the manufacture of automotive tires, tubes and other rubber products.
 Sime Darby Salaried Employees Association (ALU-TUCP) is an association of monthly salaried employees of Sime Darby
at its Marikina factory.
 Prior to the present controversy, all company factory workers in Marikina including members of private respondent union
worked from 7:45 a.m. to 3:45 p.m. with a 30 minute paid “on call” lunch break.
 On 14 August 1992, Sime Darby issued a memorandum to all factory-based employees advising all its monthly salaried
employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department working
on shifts, a change in work schedule effective 14 September 1992:
o 7:45 A.M. – 4:45 P.M. (Monday to Friday)
o 7:45 A.M. – 11:45 P.M. (Saturday).
o Coffee break time will be 10 mins only between: 9:30 A.M. –10:30 A.M. and 2:30 P.M. –3:30 P.M.
o Lunch break will be between: 12:00 NN –1:00 P.M. (Monday to Friday).
 Since private respondent felt affected adversely by the change in the work schedule and discontinuance of the 30-minute
paid “on call” lunch break, it filed a complaint with the Labor Arbiter for unfair labor practice, discrimination and evasion
of liability.
 The Labor Arbiter dismissed the complaint – change in the work schedule and the elimination of the 30-minute paid
lunch break constituted a valid exercise of management prerogative and that the new work schedule did not have the
effect of diminishing the benefits granted to factory workers as the working time did not exceed eight (8) hours.
o It further held that the factory workers would be justly enriched if they continued to be paid during their lunch
break even if they were no longer “on call”.
o He also ruled that the decision in the earlier Sime Darby case was not applicable because the former involved
discrimination of certain employees who were not paid for their 30-minute lunch break while the rest of the
factory workers were paid.
 The NLRC sustained the LA’s decision.
 Upon MR, with 2 new commissioners replacing those who earlier retired, reversed its earlier decision.
o It considered the decision of this Court in the Sime Darby case of 1990 as the law of the case wherein petitioner
was ordered to pay “the money value of these covered employees deprived of lunch and/or working time
breaks.”
o The public respondent declared that the new work schedule deprived the employees of the benefits of time-
honored company practice of providing its employees a 30-minute paid lunch break resulting in an unjust
diminution of company privileges prohibited by Art. 100 of the Labor Code, as amended.
 The OSG commented that the memorandum, which contained the new work schedule, was not discriminatory of the
union members nor did it constitute unfair labor practice on the part of petitioner.

Issue/s:
 W/N the act of management in revising the work schedule of its employees and discarding their paid lunch break
constitute unfair labor practice. (NO, the right to fix work schedule rests primarily on the employer.)

Ratio:
The right to fix the work schedules of the employees rests principally on their employer. The new work schedule fully
complies with the daily work period of 8 hours without violating the Labor Code.
 Sime Darby reasons that the adjustment is for the efficient conduct of its business operations and its improved
production.
o While the old work schedule included a 30-minute paid lunch break, the employees could be called upon to do
jobs during that period as they were “on call.”
 o Even if denominated as lunch break, it could be considered as working time because the factory employees
were required to work if necessary and were paid accordingly for working.
 The new work schedule gave the employees a one-hour lunch break without any interruption from their
employer.
o For a full one-hour undisturbed lunch break, the employees can freely and effectively use this hour not only for
eating but also for their rest and comfort which are conducive to more efficiency and better performance in
their work.
 Since the employees are no longer required to work during this one-hour lunch break, there is no more need for them to
be compensated for this period.
 Besides, the new schedule applies to all employees in the factory similarly situated whether they are union
members or not.

The ruling in the earlier Sime Darby case is not applicable in this case since the issue therein involved a matter of granting
lunch breaks to certain employees while depriving the other employees of the same.
 This case does not pertain to any controversy involving discrimination of employees but only the issue of whether the
change of work schedule, which management deems necessary to increase production, constitutes unfair labor practice.
 As shown by the records, the change effected by management is made to apply to all factory employees engaged in
the same line of work whether or not they are members of private respondent union.
 It cannot be said that the new scheme adopted by management prejudices the right of private respondent to self-
organization.

Employers are accorded the right to protect themselves and to exercise what are clearly management prerogatives.
 Every business enterprise endeavors to increase its profits. It may devise means to attain that goal.
 Thus, management is free to regulate, according to its own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and
recall of workers.
 Management retains the prerogative, whenever exigencies of the service so require, to change the working hours
of its employees.
 So long as such prerogative is exercised in good faith for the advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this
Court will uphold such exercise.
 While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be
supposed that every dispute will be automatically decided in favor of labor.
 Management also has right which, as such, are entitled to respect and enforcement in the interest of simple fair play.

Dispositive:
WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations Commission dated 29 November 1994 is SET
ASIDE and the decision of the Labor Arbiter dated 26 November 1993 dismissing the complaint against petitioner for unfair labor
practice is AFFIRMED.
Bisig ng Manggagawa ng PRC v. PRC, September 30, 1981 — SY
G.R. No.L-27761 | September 30, 1981 | Abad Santos, J
Petitioners: Bisig ng Manggagawa ng PRC
Respondents: Philippine Refining Co., Inc. (PRC)

Recit-ready Digest + Doctrine:

Bisig filed a petition for declaratory relief seeking that their Christmas bonus be included as part of their basic pay for the
computation of overtime pay. Bisig cites NAWASA vs. NAWASA Consolidated Unions where it was declared that the 'regular rate'
is also deemed to include other incentives and bonuses which employers may receive as part of their regular pay. On the other
hand, PRC argued that, per the CBA, it was never intended to include the employees' Christmas bonus in the computation of the
overtime pay. Court ruled for PRC. Court said that, per the CBA’s provision regarding overtime pay, it was only the regular base
pay that was considered to compute the overtime pay. Further, what is important in the Nawasa ruling is that the the product
resulting from the computation must always be equal or higher than the statutory requirement of 25% more than the regular
wage. Here, the Nawasa ruling was not violated, since the formula adopted by the CBA is 50% more than the regular base pay,
which when computed is much higher than what can be arrived at using the statutory formula.

The phrase "regular base pay" is clear, unequivocal and requires no interpretation. It means regular basic pay and necessarily
excludes money received in different concepts such as Christmas bonus and other fringe benefits. In this connection it is
necessary to remember that in the enforcement of previous collective bargaining agreements containing the same provision of
overtime pay at the rate of "regular base pay plus 50% thereof", the overtime compensation was invariably based only on the
regular basic pay, exclusive of Christmas bonus and other fringe benefits.

Facts:
  April 15, 1966 Appellant labor union (Bisig ng Manggagawa) filed an action for declaratory relief in the Court of First
Instance praying that the 1968 Collective Bargaining Agreement it had entered into with the company that:
 The union wanted to include the Christmas bonus and other fringe benefits in the computation of overtime pay.
 The company contended that they never intended to include such benefits in the computation because they already
increased the overtime computation from 25% to 50% in the condition that overtime pay will only include the regular
base pay
 The ruling in NAWASA vs. NAWASA Consolidated Unions the company contended could not be applied because that was a
government controlled corporation.
 During the hearing, it was established that all the other collective bargaining agreements entered into between the parties
before 1965 contained a provision similar to subject provision and that overtime pay then was computed on the basis
solely of the employee's basic monthly pay, and that appellant had attempted to negotiate for the inclusion of the
Christmas bonus and other fringe benefits in the computation but the appellee refused to accede to its demand.
 CFI RULING: "regular base pay" does not include Christmas bonus and other fringe benefits.

Issue/s:
 Whether or not the phrase "regular base pay as used in subject CBA includes Christmas bonus and other fringe benefits -
NO
 Whether or not the stipulation in the Collective Bargaining Agreement on overtime pay violates the NAWASA doctrine if
the answer to question No. 1 is in the negative – NO

Ratio:
 The Supreme Court ruled that the term "regular base pay" is clear, unequivocal and requires no interpretation. It held that
the term means regular basic pay which necessarily EXCLUDES money received in different concepts such as Christmas
bonus and other fringe benefits. The Court observed that in framing up their CBA especially on the provision regarding
overtime pay, it was only the regular base pay that was considered, and the same fact was undeniably known to the
petitioner - the very reason, according to the court, why it attempted to have a different provision pertaining to overtime
pay which would include Christmas bonus and other benefits. This factual information by itself constrains the petitioner
to question the intention of that particular phrase in their CBA pertaining to overtime pay but could only claim that it
violated the Nawasa doctrine and insist that it be reformed to conform to said doctrine.
 The Supreme Court held that the Nawasa ruling did not limit that the computation of overtime pay to be based solely on
the employees' regular wage or salary, which according to law includes bonuses and other benefits. What is important is
that the product resulting from the computation must always be equal or higher than the statutory requirement of 25%
more than the regular wage. In the case at bar, the formula adopted by the CBA is 50% more than the regular base pay,
which when computer is much higher than what can be arrived at using the statutory formula. Thus, the Court declared
that the provisions of the CBA as to the computation of overtime pay has amply complied with what is required by law,
and therefore is valid and not in contravention to the Nawasa doctrine.

Notes:

Commonwealth Act No. 444

"SEC. 3. Work may be performed beyond eight hours a day in case of actual or impending emergencies . . .; but in all such cases, the
laborers and employees shall be entitled to receive compensation for the overtime work performed at the same rate as their regular
wages or salary, plus at least twenty-five per centum additional.

NAWASA CASE – 25% of REGULAR AND BENEFITS = OVERTIME PAY

CURRENT CASE – 50% of REGULAR = OVERTIME PAY RATIO

All employers covered by said law are under legal compulsion to grant their employees overtime compensation in amounts not less
than their basic pay and the fringe benefits regularly and continuously received by them plus 25% thereof.
BUT it does not mean computation should always include fringe benefits.
In the foregoing case, the company still complied with the basic requirement. Because based on the mathematical computation of
the overtime pay in which the compensation was increased from 25% to 50% of the Regular Base Pay. IT YIELDED A HIGHER
COMPENSATION THAN OF THE STATUTORY FORMULA.

Dispositive:
WHEREFORE, the decision appealed from is hereby affirmed in all respects. Without pronouncement as to costs.

PAL Employees Savings and Loan Association, Inc. (PESALA) v. NLRC, August 22, 1996 — TORIO
G.R. No. | Date | Ponente
Petitioners: PAL Employees Savings and Loan Association, Inc.
Respondents: NLRC and Angelo Esquejo
 Recit-ready Digest + Doctrine:
Esquejo was hired as a guard by PESALA. The contract said he was required to work 12 hours a day and that his basic salary is
P1990. He filed a case for nonpayment of overtime pay. The issue is w/n an employee is entitled to overtime pay for work
rendered in excess of the regular eight hour day even if he entered into a contract specifying a work-day of 12 hours at a fixed
monthly rate above the legislated minimum wage. SC said yes because: (a) upon computing, the basic salary paid did not actually
include the OT pay (as argued by PESALA) and Esquejo was actually shortchanged by P300.5 and (b) the contract was definite
only as to the work hours and not as to what was covered by the salary.

Facts:
 Angelo Esquejo (Esquejo) was hired as a security guard for PAL Employees Saving and Loan Association (PESALA) in
1986.
 The employment contract provided that he was required to work 12 hours a day and was to receive a monthly basic
salary of P1,990.00 plus an emergency allowance of P510. He received several salary adjustments because of his
impressive performance until his basic salary reached P3720.
 In 1990, Esquejo was charged administratively with misconduct or disobedience of the lawful orders of respondent or its
officers, and gross and habitual neglect of his duties. He was suspended. However, prior to his suspension, Esquejo filed a
case against PESALA for non-payment of overtime pay and non-payment of the P25 statutory minimum wage increase
mandated by RA 6727 before the NLRC.
 NLRC ruled in favor of Esquejo. PESALA did not appeal so the parties were called into a conference to determine the
possibility of the parties' voluntary compliance with the Decision. Pending the conference, PESALA filed a petition for
certiorari before the Supreme Court, claiming that the Employee Payroll Sheets which contained the salaries and overtime
pay received by respondent Esquejo were located in its bodega and based on the Payroll Sheets, it appears that
substantial overtime pay have been paid to Esquejo in the amount of P24,238.22 for the period starting January 1987
up to November 1989.

Issue: Is an employee entitled to overtime pay for work rendered in excess of the regular eight hour day even if he entered into a
contract of labor specifying a work-day of twelve hours at a fixed monthly rate above the legislated minimum wage?— YES

Ratio:
(Note: SC said the case should already be dismissed on procedural grounds but in view of the importance of the issue raised in the
petition, it resolved to decide the case on the merits also.)

 PESALA argues that the overtime pay was already included in the basic salary since the employment contract explicitly
states without any equivocation that the overtime pay for work rendered for 4 hours in excess of the 8 hour regular
working period is already included in the P1,990.00 basic salary, which is above the minimum wage of P1413. This is very
clear from the fact that the appointment states 12 hours a day work. PESALA tried to prove this by showing its
computation of the salary.
o SC: based on the computation of PESALA, the overtime pay is actually not included in the basic pay. In fact,
Esquejo was short changed by P300.50. The minimum wage at the time of his hiring was P1413 and the legal
overtime pay was P877.50 (total: P2290.50) but Esquejo was only paid P1990 basic salary. (I think what
PESALA did in its computation was add the basic salary of 1990 and the emergency allowance of 510, which
totals to 2500 gross salary then it claimed that since 2500>2290.5 [2290.5 is the amount legally due to
Esquejo], then overtime pay was already included. See computation in the notes section.)
 PESALA argues that the employment contract which provided for 12-hr work days with the stipulated basic salary of
P1990 was valid because there was meeting of minds so Esquejo cannot now claim overtime pay on the ground that there
was no meeting of minds.
o SC: The argument is untenable. The contract was definite only as to the number of hours of work to be
rendered but vague as to what is covered by the salary stipulated. SC agreed with the ruling of the NLRC
that although it is cardinal rule in the interpretation of a contract that if the terms thereof are clear and leave no
doubt upon the intention of the contracting parties, then the literal meaning of its stipulations shall control,
such rule cannot apply in this case. The fact that Esquejo is now claiming for overtime pay while PESALA is
arguing that the overtime pay was already included in the basic salary is indicative of the absence of meeting of
minds with respect to this matter. There is, therefore, an ambiguity which should be resolved by applying the
pertinent laws.
 While it is true that Esquejo was paid a salary which is higher than the minimum wage, it does not
follow that any additional compensation due to him can be offset by his salary in excess of the
minimum, especially in the absence of an express agreement to that effect. To consider otherwise
would be in disregard of the rule of non-diminution of benefits which are above the minimum
being extended to the employees.
 Furthermore, such arrangement disregards the manner required by the law on how overtime
compensation must be determined.
 There is further the possibility that in view of subsequent increases in the minimum wage, the
existing salary for 12 hours could no longer account for the increased wage level together with the
overtime rate for work rendered in excess of eight hours. This fertile ground for a violation of a labor
standards provision can be effectively thwarted if there is a clear and definite delineation between
an employee's regular and overtime compensation.
 It should also be noted that a reading of respondent's Appointment Memoranda issued to the
complainant on different dates shows that the salary being referred to by PESALA which allegedly
included Esquejo’s overtime pay, partakes of the nature of a basic salary and as such, does not
contemplate any other compensation above thereof including Esquejo’s overtime pay.
 o Moreover, even if there’s actually meeting of the minds, PESALA still cannot escape liability because contracts
of labor are explicitly subject to the police power of the State because they are not ordinary contracts but are
impressed with public interest. In this case, the contract in question would have been deemed in violation of
pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and Esquejo
would still be entitled to overtime pay.
 PESALA argues that Esquejo’s delay in claiming the overtime pay shows his consent to the inclusion of the overtime pay in
his salary.
o SC: there’s no delay. Esquejo has been working from 1986-1989 and in 1990, just before he got suspended, he
filed his claim. Laches has also not set in.
 PESALA argues that the award of overtime pay is "plain and simple unjust and illegal enrichment." Such award "in effect
sanctioned and approved the grant of payment to respondent Esquejo which will result in double payment for the
overtime work rendered by paid employee.
o SC: this is begging the issue (ie circular reasoning). The tribunals below were correct in ruling that the
stipulated pay did not include overtime. Hence, there can be no undue enrichment in claiming what legally
belongs to Esquejo.

Dispositive: WHEREFORE, in view of the foregoing considerations, the Petition is DISMISSED, the temporary restraining order
issued on July 30, 1992 LIFTED, and the assailed decision of the public respondent AFFIRMED. Cost against petitioner.

Notes:

 Contract:

Date: February 24, 1986

NAME : ESQUEJO, ANGEL
NATURE OF ACTION : APPOINTMENT
FROM :
POSITION TITLE : COMPANY GUARD
TO :
STATUS : PERMANENT
EFFECTIVE DATE : MARCH 1, 1986
FROM : P1,990.00 per month
plus P510.00 emergency
allowance

SALARY :
TO :

REMARKS : To confirm permanent

appointment as company
guard who will render 12
hours a day with one (1)
day off

RECOMMENDED BY: APPROVED BY:

(Signed) (Signed)
SULPICIO B. JORNALES CATALINO F. BANEZ

(Signed)
ANGEL V. ESQUEJO

 PESALA’s computation dated Feb 4, 1986 and June 6, 1986:

54 x 314 days
-------------
12 months = P1,413.00 monthly salary
The hourly overtime pay is computed as follows:
54/8 hours = P6.75 x 4 hrs. = P27.00
P27.00 x 1.25 = P33.75 x 20 (should be 26)days = P887.50
(should be P877.50)
P1,413.00 — legal minimum wage
+ 887.50(877.50) — legal overtime pay
---------------
P2,290.50 — amount due to respondent
Esquejo under the law
P2,500.00 — gross salarying of Esquejo per contract
-2,290.50
----------
P209.50 — Difference
Lagatic v. NLRC, January 28, 1998 — YBAÑEZ
G.R. No. | Date | Ponente
Petitioners: ROMEO LAGATIC
Respondents: NATIONAL LABOR RELATIONS COMMISSION, CITYLAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, JESUS
GO, GRACE LIUSON, and ANDREW LIUSON

Recit-ready Digest + Doctrine:

Entitlement to overtime pay must first be established by proof that said overtime work was actually performed, before an
employee may avail of said benefit.

Facts:
 Petitioner Romeo Lagatic was employed by Cityland, first as a probationary sales agent, and later as a marketing
specialist. He was tasked with soliciting sales for the company, with the corresponding duties of accepting call-ins,
referrals, and making client calls and cold calls (practice of prospecting for clients through the telephone directory).
 Cityland, believing that the same is an effective and cost-efficient method of finding clients, requires all its marketing
specialists to make cold calls. The number of cold calls depends on the sales generated by each: more sales mean less cold
calls. Likewise, in order to assess cold calls made by the sales staff, as well as to determine the results thereof, Cityland
requires the submission of daily progress reports on the same.
 Cityland issued a written reprimand to petitioner for his failure to submit cold 2 call reports in October, and other cold
calls for other months previously.
 Petitioner was required to explain his inaction, but Cityland found his reply to be inadequate. He was subsequently
suspended for three days.
o Notwithstanding his failures, he failed to send cold call reports. But instead of complying, he wrote a note, "TO
HELL WITH COLD CALLS! WHO CARES?" and exhibited the same to his co-employees. He left the same lying on
his desk.
o He sent another reply alleging that his failure to submit cold call reports should trot be deemed as gross
insubordination. He denied any knowledge of the damaging statement, "TO HELL WITH COLD CALLS!"
 Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal. Subsequently, petitioner filed a
complaint against Cityland for illegal dismissal, illegal deduction, underpayment, overtime and rest day pay, damages and
attorney's fees.
 LA dismissed the petition for lack of merit. On appeal, the same was affirmed by the NLRC; hence the present recourse.
 Lagatic contends that he is entitled to amounts illegally deducted from his commissions, to unpaid overtime, rest day and
holiday premiums, to moral and exemplary damages, as well as attorney's fees and costs.
 With respect to petitioner's claims for overtime pay, rest day pay and holiday premiums, Cityland maintains that Saturday
and Sunday call-ins were voluntary activities on the part of sales personnel who wanted to realize more sales and thereby
earn more commissions. It is their contention that sales personnel were clamoring for the "privilege" to attend Saturday
and Sunday call-ins, as well as to entertain walk-in clients at project sites during weekends, that Cityland had to stagger
the schedule of sales employees to give everyone a chance to do so.
 Simultaneously, Cityland claims that the same were optional because call-ins and walk-ins were not scheduled every
weekend.

Issue/s:
W/N PETITIONER IS ENTITLED TO SALARY DIFFERENTIALS, BACKWAGES, SEPARATION PAY, OVERTIME PAY, REST DAY PAY,
UNPAID COMMISSIONS, MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES - NO.

Ratio:
 First, the Court ruled that the dismissal of Lagatic’s services were valid for constituting just cause. He was guilty of willful
disobedience.
o His continued infraction of company policy requiring cold call reports, as evidenced by the 28 instances of non-
submission of aforesaid reports.
o Cityland, on the other hand, submitted the affidavits of his co-employees attesting to his authorship of the
same. Petitioner's only defense is denial.
 Second, petitioner is not entitled to amounts deducted from his commissions. At that time, there is no law which
prescribes a method for computing commissions.The determination is the result of collective bargaining negotiations,
individual employment contracts or established employer practice.
 Third, while Cityland claims that the personnel were the ones that wanted to show up during Saturday and Sundays, the
Court noted that there were no records showing call ins were scheduled on weekends.
 LA and the NLRC sanctioned respondent's practice of offsetting rest day or holiday work with equivalent time on regular
workdays on the ground that the same is authorized by Department Order 21, Series of 1990.
o The D.O. was misapplied in this case. The D.O. involves the shortening of the workweek from six days to five
days but with prolonged hours on those five days.
o Under this scheme, non-payment of overtime premiums was allowed in exchange for longer weekends for
employees. In the instant case, petitioner's workweek was never compressed. Instead, he claims payment for
work over and above his normal 5 1/2 days of work in a week.
 o To allow off-setting would prejudice the worker. He would be deprived of the additional pay for the rest day
work he has rendered and which is utilized to offset his equivalent time off on regular workdays. To allow
Cityland to do so would be to circumvent the law on payment of premiums for rest day and holiday work.
o However, petitioner failed to show his entitlement to overtime and rest day pay due to the lack of sufficient
evidence as to the number of days and hours when he rendered overtime and rest day work. Entitlement to
overtime pay must first be established by proof that said overtime work was actually performed, before
an employee may avail of said benefit.
o To support his allegations, petitioner submitted in evidence minutes of meetings wherein he was
assigned to work on weekends and holidays at Cityland's housing projects. The Court held that minutes
do not prove that petitioner actually worked on said dates.

Dispositive:
With the finding that petitioner's dismissal was for a just and valid cause, his claims for moral and exemplary damages, as well as
attorney's fees, must fail. Resolution is AFFIRMED and this petition is hereby DISMISSED for lack of merit. Costs against petitioner.
SO ORDERED.
Interphil Laboratories Employees Union v. Interphil Laboratories, December 19, 2001 — ZABALA
G. R. No. 142824 | December 19, 2001 | KAPUNAN, J.
Petitioners: INTERPHIL LABORATORIES EMPLOYEES UNION-FFW, ENRICO GONZALES and MA. THERESA MONTEJO,
Respondents: INTERPHIL LABORATORIES, INC., AND HONORABLE LEONARDO A. QUISUMBING, SECRETARY OF LABOR AND
EMPLOYMENT

Recit-ready Digest + Doctrine:

Petitioner Union’s CBA with Interphil was about to expire. The Union’s efforts to renew the CBA and their request that the new
CBA be effective for 2 years were not heard by Interphil’s HR President, Salazar. Salazar characterized the Union’s efforts as
premature. As a consequence, the Union’s officials directed the members to boycott the “overtime” work and slowdown their
work to decrease Interphil’s productivity. Their regular working hours were from 6am-6pm and 6am-6pm (2 shifts). However,
per the instructions of the Union officials, the members stopped working at 2am and 2pm and left their workplace. When
Interphil filed a case to declare their acts as amounting to illegal strike, the Union contended that their working hours were really
from 07:30am-04:30pm, or for 8 hours only as stated in the CBA. They faulted that NLRC and CA for giving credence to other
evidence than the CBA (testimonies of Salazar and a member of the union)

Held: Their working hours really were from 6am-6pm and 6am-6pm. The parties stipulated in the CBA that while indeed, the
working hours should be from from 07:30am-04:30pm, or for 8 hours only, they also stipulated that Interphil may change the
same should it be necessary.The employees are deemed to have waived the eight-hour schedule since they followed, without
any question or complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift
schedule effectively changed the working hours stipulated in the CBA.
As the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime boycott is
justified because they were not obliged to work beyond eight hours.

The Court likewise declared the acts of the petitioners as amounting to “illegal strike on an installment basis” which is inherently
illicit and unjustifiable.

Facts:
Interphil Laboratories, Inc. is a company engaged in the business of manufacturing and packaging pharmaceutical products.
Petitioner Union is the exclusive bargaining agent for the company’s rank-and-file employees.

They had an existing CBA which was about to expire. Thus, the Union President, Ocampo, and Union Director, Clemente, requested a
meeting with the president of the HR department (Salazar).
 They inquired about the stand of the company regarding the duration of the CBA. Salazar told the union officers that the
matter could be best discussed during the formal negotiations which would start soon.
 This inquiry happened 2 more times, with the same reply from Salazar.

When they finally had a meeting, the Union officers inquired if Salazar would be amenable to make the new CBA effective for 2 years.
Salazar, however, declared that it would still be premature to discuss the matter and that the company could not make a decision at
the moment.

The next day, all the rank-and-file employees of the company refused to follow their regular two-shift work schedule from 6am-6pm
and 6pm-6am. Instead, at 2pm and 2am respectively, the employees stopped working and left their workplace without sealing the
containers and securing the raw materials they were working on.
 When Salazar inquired about the reason for their refusal to follow their normal work schedule, the employees told him to
"ask the union officers.” Thus, Salazar met with the union officers who said that the employees would only return to their
normal work schedule if the company would agree to their demands as to the effectivity and duration of the new CBA. Salazar
again told the union officers that the matter could be better discussed during the formal renegotiations of the CBA.

Since the union was apparently unsatisfied with the answer of the company, the overtime boycott continued. In addition, the
employees started to engage in a work slowdown campaign during the time they were working, thus substantially delaying the
production of the company

Interphil filed before the NLRC a petition to declare illegal petitioner union's "overtime boycott" and "work slowdown" which,
according to respondent company, amounted to illegal strike.
NLRC ruled in favor of Interphil: ordered petitioner members to go back to work and declared the officers who spearheaded and led
the overtime boycott and work slowdown, to have lost their employment status.
 CA dimissed petitioner Union’s appeal.

In the instant case, petitioner union maintained that the Labor Arbiter and CA disregarded the "parol evidence rule"when they
upheld the allegation of respondent company that the work schedule of its employees was from 6:00 a.m. to 6:00 p.m. and from 6:00
p.m. to 6:00 am.
 According to petitioner union, the provisions of their CBA on working hours clearly stated that the normal working hours
were "from 7:30 a.m. to 4:30 p.m."
 It further contended that the Labor Arbiter as well as the Court of Appeals should not have admitted any other evidence
contrary to what was stated in the CBA.

Issue/s:
 W/N evidence outside the CBA may be looked into as to the regular work hours of the employees – YES
 W/Nthe overtime boycott and work slowdown amounted to an illegal strike – YES

Ratio:
Regular Work Hours
First, the reliance on the parol evidence rule is misplaced. In labor cases pending before the Commission or the Labor Arbiter, the
rules of evidence prevailing in courts of law or equity are not controlling. Hence, the Labor Arbiter is not precluded from accepting
and evaluating evidence other than, and even contrary to, what is stated in the CBA.

In any event, the parties stipulated:

Section 1. Regular Working Hours A normal workday shall consist of not more than eight (8) hours. The regular working hours for
the Company shall be from 7:30 A.M. to 4:30 P.M. The schedule of shift work shall be maintained; however the company may change
the prevailing work time at its discretion, should such change be necessary in the operations of the Company. All employees shall observe
such rules as have been laid down by the company for the purpose of effecting control over working hours.

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

In the case before us, the LA found that respondent company had to adopt a continuous 24-hour work daily schedule by reason of
the nature of its business and the demands of its clients.
 It was established that the employees adhered to the said work schedule since 1988.
 The employees are deemed to have waived the eight-hour schedule since they followed, without any question or
complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule
effectively changed the working hours stipulated in the CBA.
As the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime boycott is justified
because they were not obliged to work beyond eight hours.

They cannot deny the existence of such regular overtime schedule:

1. the union filed a case wherein it is claimed that the company has not been computing correctly the night premium and overtime
pay for work rendered between 2:00 A.M. and 6:00 A.M. of the 6:00 P.M. to 6:00 A.M. shift.
2. In fact, the union VP, demanded that the company make a recomputation of the overtime records of the employees from 1987

Illegal Strike
The SC gave credence to the testimony of Salazar as to the facts of the case (essentially the same as the facts set forth herein)
considering that it was indisputed since counsel for petitioner waived his cross examination.

Also, a member of the Union also testified to the following effect:

1. They were told that a Memo from the Union was coming “na nag-uutos sa mga empleyado ng Kompanya na mag-imbento
ng sari-saring dahilan para lang hindi sila makapagtrabaho ng "overtime".”
2. He was told by the Union’s treasurer, “huwag ka na lang pumasok sa Biyernes para hindi ka masabihan ng magtrabaho ng
Sabado at Linggo' na siya namang araw ng "overtime" ko”
3. “Sinabihan kami na huwag ng mag-overtime pag nagbigay ng senyas ang Unyon ng "showtime."”
4. Noong umaga ng ika-15 ng Abril 1993, nagsabi na si Danny Tansiongco ng "showtime". Dahil dito wala ng empleyadong
nag-overtime at sabay-sabay silang umalis, maliban sa akin. Ako ay pumasok rin noong Abril 17 at 18, 1993 na Sabado at
Linggo.
5. When asked about still rendering overtime by the Union officers, “Sinabi ko na wala akong maibigay na dahilan para lang
hindi pumasok at "mag-overtime." Pagkatapos nito, ako ay pinagmumura ng mga opisyales ng Unyon kaya't ako ay madaliang
umalis.”

Likewise, the respondents' denial of having a hand in the work slowdown since there was no change in the performance and work
efficiency for the year 1993 as compared to the previous year was even rebuffed by their witness Montejo, a Quality Control Analyst.

Evidently, from all the foregoing, respondents' unjustified unilateral alteration of the 24-hour work schedule thru their concerted
activities of "overtime boycott" and "work slowdown" to force the petitioner company to accede to their unreasonable demands, can
be classified as a strike on an installment basis, as correctly called by petitioner company.
 strike on the installment plan - a willful reduction in the rate of work by concerted action of workers for the purpose of
restricting the output of the employer, in relation to a labor dispute; an activity by which workers, without a complete
 stoppage of work, retard production or their performance of duties and functions to compel management to grant their
demands.
Such a slowdown is generally condemned as inherently illicit and unjustifiable, because while the employees "continue to work
and remain at their positions and accept the wages paid to them," they at the same time "select what part of their allotted tasks they
care to perform of their own volition or refuse openly or secretly, to the employer's damage, to do other work;" in other words, they
"work on their own terms."

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

Dispositive:
WHEREFORE, the petition is DENIED DUE COURSE and the 29 December 1999 decision of the Court of Appeals is AFFIRMED.

Mercury Drug Co. v. Dayao, September 30, 1982 — AVILLON

G.R. No. L-30452 | September 30, 1982 | Gutierrez, Jr., J.
Petitioners: MERCURY DRUG CO., INC,
Respondents: NARDO DAYAO, ET AL.

Recit-ready Digest + Doctrine:

Respondents, employees of petitioner Mercury Drug, Co., filed a petition with the Court of Industrial Relations (CIR) praying
among others for payment of their unpaid wages for work done on Sundays and legal holidays and of additional compensation
for nighttime work. Respondents alleged that they were coerced by petitioner into entering into contracts of employment
waiving the said benefits. Petitioner filed an answer after its motion to dismiss was denied. The Industrial Court rendered
judgment in favor of respondents ruling that an agreement in a contract of employment which would exclude the 25% additional
compensation for work done during Sundays and holidays is null and void, and ordered petitioner to pay respondents two
additional sums equivalent to 25% of their respective basic salaries for services rendered on Sundays and legal holidays, and
additional compensation for nighttime services. Hence, the present recourse of petitioner, alleging among others, that it was
contrary to public policy to declare the contracts of employment null and void.

The Supreme Court held that the entire employment contracts were not declared null and void but only the provision on salaries
which excluded additional compensation for services rendered on Sundays and legal holidays, and that additional compensation
for nighttime work is founded on public policy which cannot be waived.

Facts: (Note: The case was badly written and it was mostly a copy-paste of the lower court’s decision :( sad)
 A petition was filed by Nardo Dayao and 70 others against Mercury Drug Co., Inc. praying for the payment of their unpaid
back wages for work done on Sundays and legal holidays plus 25% additional compensation from date of their
employment up to June 30, 1962, and payment of extra compensation on work done at night.
 The employees alleged:
o they worked on regular days and on every other Sunday and also during all holidays
o that for services rendered on Sundays and holidays, they were not paid for the first 4 hours and what they only
received was the overtime compensation corresponding to the number of hours after or in excess of the first
four hours
o that their nighttime services could well be seen on their respective daily time records.
 Mercury alleged that:
o the company being a service enterprise is excluded from the coverage of the Eight Hour Labor Law, as
amended;
o no court has the power to set wages, rates of pay, hours of employment or other conditions of employment to
the extent of disregarding an agreement thereon between the company and the employees, and of fixing night
differential wages;
o the petitioners were fully paid for services rendered under the terms and conditions of the individual contracts
of employment; and
o under the respective contracts of employment, the subject 25% additional compensation had already been
included in the latter’s respective monthly salaries.
 Mercury alleged this as computation of the salaries:
o the annual compensation of private respondent Nardo Dayao, including the additional compensation for the
work he renders during the first four (4) hours on every other Sunday and on the eight (8) Legal Holidays at
the time was P2,400.00 or P200.00 per month. These amounts did not represent basic salary only, but they
represented the basic daily wage of Nardo Dayao considered to be in the amount of P7.36 x 305 ordinary
working days at the time or in the total amount of P2,144.80. So plus the amount of P156.40 which is the
equivalent of the Sunday and Legal Holiday rate at P9.20 basic rate of P7.36 plus 25% thereof or P1.84 x 17, the
latter figure representing 13 Sundays and 4 Legal Holidays of 8 hours each
Issue/s:
 W/N the waiver of the benefits under the contract of employment is void - YES

Ratio:
 Any agreement in a contract of employment which would exclude the 25% additional compensation for work done during
Sundays and holidays is null and void as mandated by law.
  The computations, supposedly patterned after the WAS Interpretative Bulletin No. 2 miserably failed to show the exact
and correct annual salary as stated in the respective contracts of employment of the employees. The figures arrived at in
each case did not tally with the annual salaries on the employees’ contracts of employment, the difference varying from
P1.20 to as much as P14.40 always against the interest of the employees. The petitioner’s defense consists of
mathematical computations made after the filing of the case in order to explain a clear attempt to make its employees
work without the extra compensation provided by law on Sundays and legal holidays.
 Mercury did not deny that the employees rendered nighttime work. In fact, no additional evidence was necessary to prove
that the employees were entitled to additional compensation for whether or not they were entitled to the same is a
question of law which the lower court answered correctly.
 The "waiver rule" is not applicable in the case at bar. Additional compensation for nighttime work is founded on public
policy, hence the same cannot be waived. (Article 6, Civil Code).
 Mercury’s contention that its employees fully understood what they signed when they entered into the contracts of
employment and that they should be bound by their voluntary commitments is anachronistic in this time and age.
 Mercury, maintains a chain of drugstores that are open every day of the week and, for some stores, up to very late at night
because of the nature of the pharmaceutical retail business. The employees knew that they had to work Sundays and
holidays and at night, not as exceptions to the rule but a part of the regular course of employment.
 Presented with contracts setting their compensation on an annual basis with an express waiver of extra compensation for
work on Sundays and holidays, the workers did not have much choice. The employees were at a disadvantage insofar as
the contractual relationship was concerned.
 Workers in our country do not have the luxury or freedom of declining job openings or filing resignations even when
some terms and conditions of employment are not only onerous and iniquitous but illegal.
 It is precisely because of this situation that the framers of the Constitution embodied the provisions on social justice
(Section 6, Article II) and protection to labor (Section 9, Article II) in the Declaration of Principles And State Policies.
 It is pursuant to these constitutional mandates that the courts are ever vigilant to protect the rights of workers who are
places in contractually disadvantageous positions and who sign waivers or provisions contrary to law and public policy.

Dispositive:
WHEREFORE, the petition is hereby dismissed. The decision and resolution appealed from are affirmed with costs against the
petitioner.

SO ORDERED.
Prangan v. NLRC, April 15, 1998 — BALAGTAS
G.R. No. 126529 | April 15, 1998 | Romero, J. | Article 86 - Evidence
Petitioners: Eduardo B. Prangan
Respondents: NLRC, Masagana Security Services Corporation, and Victor Padilla

Recit-ready Digest + Doctrine:

MSSC hired Prangan as one of its security guards and assigned him to the Cat House Bar. Prangan then filed a complaint in the LA
for underpayment of wages and other monetary benefits. The LA ruled in Prangan’s favor but concluded that Prangan only
worked for 4 hours a day (and not 12 which Prangan contends). The NLRC affirmed it, basing it solely on the DTRs presented by
MSSC as evidence.

The Court ruled that the DTR in question cannot be relied upon in computing Prangan’s hours of work. The DTR had badges of
untruthfulness and indices of dubiety. The Court held such due to the DTRs showing that Prangan arrived and left work at exactly
the same time everyday; plus Prangan’s Personnel Data Sheet which was signed by MSSC’s Operations Mgr. and the Cat House
Bar’s Attendance Sheets expressly stated that Prangan was to work for 12 hours a day.

If doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in
favor of the employee.

Facts:
1. Masagana Security Svcs. Corp. (MSSC) hired Prangan as one of its security guards.
o Prangan was assigned to the Cat House Bar and Restaurant.

2. Prangan then filed a complaint against MSSC.

o For underpayment of wages, non-payment of salary from August 16-31, 1993, overtime pay, premium pay for
holiday, rest day, night shift differential, uniform allowance, service incentive leave pay and 13th month pay
from the year 1990 to 1993.

3. MSSC claimed that Prangan was merely an agent of MSSC in securing his employment as the Cat House Bar and Resto.
o Thus, the liability for the claims of Prangan should be charged to Cat House Bar and its owner, being his direct
employer.

4. The LA ruled in favor of Prangan.

o But the LA concluded that he worked only for 4 hours a day (and not 12 hours as Prangan contends).
 This resulted to Prangan being awarded a lower monetary award.
5. The NLRC affirmed the LA’s decision.
 6. MSSC:
o As evidence, MSSC submitted the daily time records allegedly signed by Prangan himself, showing that he only
worked four hours daily.

7. Prangan:
o These daily time records were falsified for the simple reason that he was not required to submit one.
o He further stressed that, assuming such documents exist, its authenticity and due execution are questionable
and of doubtful source.

Issue/s:
 W/N the NLRC is correct in ruling that Prangan only worked for 4 hours a day, based on dubious and seemingly forged
DTRs. - NO.

Ratio:
1. the NLRC, in declaring that Prangan only worked for four hours, relied solely on the supposed daily time records of
Prangan submitted by MSSC..
o The SC rules that these documents cannot be considered substantial evidence as to conclude that petitioner
only worked for four hours.

2. Prangan unequivocably stated in his rejoinder that:

o I never made nor submitted any daily time record with MSSC considering the fact that he was assigned to a single
post and that the daily time records he allegedly submitted with respondent company are all falsified and his
signature appearing therein forged
o MSSC hardly bothered to controvert Pranganr's assertion, much less bolster its own contention.
 As Prangan's employer, MSSC has unlimited access to all relevant documents and records on the
hours of work of the petitioner.
 Yet, even as it insists that Prangan only worked for four hours and not twelve, no employment
contract, payroll, notice of assignment or posting, cash voucher or any other convincing evidence
which may attest to the actual hours of work of Pranganr was even presented.
 Instead, what MSSC offered as evidence was only Prangan's daily time record, which the latter
categorically denied ever accomplishing, much less signing.

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

4. Another consideration which militates against MSSC's claim is the fact that in the personnel data sheet of Prangan, duly
signed by the MSSC’s operation manager, it shows on its face that the Prangan’s hours of work are from 7:00 p.m. to 7:00
a.m. or twelve hours a day.
o Hence, MSSC is estopped from assailing the contents of its own documents.

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

6. All told,MSSC has not adequately proved that Prangan’s actual hours of work is only four hours.
o Its unexplained silence contravening the personnel data sheet and the attendance sheets of Cat House Bar and
Restaurant presented by the Prangan showing he worked for twelve hours, has assumed the character of an
admission.
o No reason was proffered for this silence despite MSSC, being the employer, could have easily done so.

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

Dispositive:
WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED. Accordingly, the decision of the NLRC dated July 31,
1996 is hereby VACATED. Whatever money claims due to the petitioner shall be computed on the basis of a twelve-hour daily work
schedule. For this purpose, the case is hereby REMANDED to the Labor Arbiter for immediate recomputation of said claims in
accordance with the foregoing findings. No costs.

SO ORDERED.

National Semiconductors Distribution Ltd. V. NLRC, June 26, 1998 — BULATAO

G.R. No. 123520 | June 26, 1998 | BELLOSILLO, J.
 Petitioners: NATIONAL SEMICONDUCTOR (HK) DISTRIBUTION, LTD.
Respondents: NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION) and EDGAR PHILIP C. SANTOS

Recit-ready Digest + Doctrine:

Petitioner NSC manufactures and assembles electronic parts for export. Respondent Santos was employed by NSC as a technician
with a monthly salary of P5,501.00 assigned to the graveyard shift starting at ten o’ clock in the evening until six o’ clock in the
morning. On 8 January 1993 Santos did not report for work on his shift. He resumed his duties as night shift Technician Support
only on 9 January 1993. However, at the end of his shift the following morning, he made two (2) entries in his daily time record
(DTR) to make it appear that he worked on both the 8th and 9th of January 1993. Limsiaco received a report that there was no
technician in the graveyard shift of 8 January 1993. Informal investigations were conducted by management. Santos submitted
his written explanation alleging that he was ill on the day he was absent. As regards the entry on 8 January, he alleged that it was
merely due to oversight or carelessness on his part. NSC dismissed him on the ground of falsification of his DTR. Santos filed a
complaint for illegal dismissal and non-payment of back wages, premium pay for holidays and rest days, night shift differential
pay, allowances, separation pay, moral damages and attorney’s fees. W/N respondent National Semiconductor (HK) Distribution
Ltd. illegally dismissed complainant Edgar Philip Santos. - NO. W/N complainant Edgar Philip Santos entitled to recover unpaid
salary, holiday pay, night shift differential, allowances, separation pay, retirement benefits and moral damages. - YES. Santos’
allegation of non-payment of this benefit, to which he is by law entitled, is a negative allegation which need not be supported by
evidence unless it is an essential part of his cause of action. the burden of proving that payment of such benefit has been made
rests upon the party who will suffer if no evidence at all is presented by either party. Respondent cannot adequately prove the
fact of non-payment of night shift differentials since the pertinent employee files, payrolls, records, remittances and other similar
documents - which will show that private respondent rendered night shift work; the time he rendered services; and, the amounts
owed as night shift differentials - are not in his possession but in the custody and absolute control of petitioner. Private
respondent has been in petitioner’s employ for five (5) years - starting 13 January 1988 when he was hired to 14 January 1993
when his services were terminated - and petitioner never denied that private respondent rendered night shift work. By choosing
not to fully and completely disclose information to prove that it had paid all the night shift differentials due to private respondent,
petitioner failed to discharge the burden of proof. In the instant case, petitioner furnished private respondent notice as to the
particular acts which constituted the grounds for his dismissal. By requiring him to submit a written explanation within 48 hours
from receipt of the notice, the company gave him the opportunity to be heard in his defense.Private respondent availed of this
chance by submitting a written explanation.

Facts:
 Petitioner National Semiconductor (HK) Distribution, Ltd. (NSC), a foreign corporation licensed to do business in the
Philippines, manufactures and assembles electronic parts for export with principal office at the Mactan Export Processing
Zone, Mactan, Lapu-Lapu City.
 Private respondent Edgar Philip C. Santos was employed by NSC as a technician in its Special Products Group with a
monthly salary of P5,501.00 assigned to the graveyard shift starting at ten o’ clock in the evening until six o’ clock in the
morning.
 On 8 January 1993 Santos did not report for work on his shift.
o He resumed his duties as night shift Technician Support only on 9 January 1993.
o However, at the end of his shift the following morning, he made two (2) entries in his daily time record (DTR) to
make it appear that he worked on both the 8th and 9th of January 1993.
 His immediate supervisor, Mr. Joel Limsiaco, unknown to private respondent Santos, received a report that there was no
technician in the graveyard shift of 8 January 1993.
o Thus, Limsiaco checked the DTRs and found out that Santos indeed did not report for work on 8 January.
o But when he checked Santos’ DTR again in the morning of 9 January 1993 he found the entry made by Santos
for the day before.
 Informal investigations were conducted by management.
o Santos was required in a memorandum to explain in writing within 48 hours from notice why no disciplinary
action should be taken against him for dishonesty, falsifying daily time record (DTR) and violation of company
rules and regulations.
o On 11 January 1993 Santos submitted his written explanation alleging that he was ill on the day he was
absent.
o As regards the entry on 8 January, he alleged that it was merely due to oversight or carelessness on his part.
 NSC dismissed him on 14 January 1993 on the ground of falsification of his DTR, which act was inimical to the company
and constituted dishonesty and serious misconduct.
o Thus, on 20 January 1993, Santos filed a complaint for illegal dismissal and non-payment of back wages,
premium pay for holidays and rest days, night shift differential pay, allowances, separation pay, moral damages
and attorney’s fees.
 LA: found that Santos was dismissed on legal grounds, although he was not afforded due process, hence, NSC was ordered
to indemnify him P1,000.00.
o Likewise ordered the payment of P19,801.47 representing Santos’ unpaid night shift differentials.
 NLRC: affirmed the LA holding that his conclusions were sufficiently supported by the evidence and therefore must be
respected by the appellate tribunal because the hearing officer was in a unique position to observe the demeanor of
witnesses and to judge their credibility.

Issue/s:
1. W/N respondent National Semiconductor (HK) Distribution Ltd. illegally dismissed complainant Edgar Philip Santos. -
NO.
 2. W/N complainant Edgar Philip Santos entitled to recover unpaid salary, holiday pay, night shift differential, allowances,
separation pay, retirement benefits and moral damages. - YES.
Ratio:
 The fact that Santos neglected to substantiate his claim for night shift differentials is not prejudicial to his cause.
o The burden of proving payment rests on petitioner NSC.
 Santos’ allegation of non-payment of this benefit, to which he is by law entitled, is a negative allegation which need not be
supported by evidence unless it is an essential part of his cause of action.
o It must be noted that his main cause of action is his illegal dismissal, and the claim for night shift differential is
but an incident of the protest against such dismissal.
 Thus, the burden of proving that payment of such benefit has been made rests upon the party who will suffer if no
evidence at all is presented by either party.
 For sure, private respondent cannot adequately prove the fact of non-payment of night shift differentials since the
pertinent employee files, payrolls, records, remittances and other similar documents - which will show that private
respondent rendered night shift work; the time he rendered services; and, the amounts owed as night shift differentials -
are not in his possession but in the custody and absolute control of petitioner.
 Private respondent has been in petitioner’s employ for five (5) years - starting 13 January 1988 when he was hired to 14
January 1993 when his services were terminated - and petitioner never denied that private respondent rendered night
shift work.
o In fact, it even presented some documents purporting to prove that private respondent was assigned to work
on the night shift.
 By choosing not to fully and completely disclose information to prove that it had paid all the night shift differentials due to
private respondent, petitioner failed to discharge the burden of proof.
 Consequently, no grave abuse of discretion can be ascribed to the NLRC for sustaining the Labor Arbiter when it ruled
thus -
o It is not disputed that complainant was regularly assigned to a night shift (10:00 P.M. to 7:00 A.M.). Under
Section 2, Rule II, Book Three of the Implementing Rules of the Labor Code, complainant is entitled to an
additional benefit of not less than ten percent (10%) of his regular wage for each hour of work performed.
o The record is bereft of evidence that respondent has paid complainant this benefit.
o The best evidence for respondent corporation would have been the payrolls, vouchers, daily time records and
the like which under Sections 6, 7, 8, 11 and 12, Rule X, Book III of the Implementing Rules it is obliged to
keep.
o Its failure gives rise to the presumption that either it does not have them or if it does, their presentation is
prejudicial to its cause.
 The SC ruled that complainant should be awarded a night shift differential but limited to three (3) years considering the
prescriptive period of money claims.
 On the issue of due process, the SC agreed with petitioner that Santos was accorded full opportunity to be heard before he
was dismissed.
o The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings,
an opportunity to explain one’s side.
 In the instant case, petitioner furnished private respondent notice as to the particular acts which constituted the grounds
for his dismissal.
 By requiring him to submit a written explanation within 48 hours from receipt of the notice, the company gave him the
opportunity to be heard in his defense.
 Private respondent availed of this chance by submitting a written explanation. Furthermore, investigations on the
incident were actually conducted on 9 January 1993 and 11 January 1993. Mr. Reynaldo Gandionco, petitioner’s witness,
testified.
 Finally, private respondent was notified on 14 January 1993 of the management’s decision to terminate his services.
o Thus, it is clear that the minimum requirements of due process have been fulfilled by petitioner.
 That the investigations conducted by petitioner may not be considered formal or recorded hearings or
investigations is immaterial.
o A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements
of which are satisfied where the parties are afforded a fair and reasonable opportunity to explain their side of
the controversy.
o It is deemed sufficient for the employer to follow the natural sequence of notice, hearing and judgment.
Dispositive:
WHEREFORE, petition is DISMISSED. The NLRC Decision of 29 September 1995 is AFFIRMED subject to the modification that the
award of P1,000.00 as indemnity is DELETED in accordance with the foregoing discussion.
SO ORDERED.