Philippine sheet metal workers' union vs the Court of Industrial Relations, Can Company

and Liberal Labor Union

G.R. No. L-2028 April 28, 1949

Employer has the right to reduce the number of workers due to introduction of
machinery in the manufacture of its products.

Facts:

The respondent company filed a motion, in the case pending in the court of industrial
relations, asking for authority to lay off at least 15 workers in its can department on the ground
that the installation and operation of nine new labor-saving machines in the said department had
rendered the services of the said workers unnecessary. Petitioner alleged that there was more
than sufficient work in the company to keep all its workers busy.

Issue: WON the laying off of the 15 employees valid

Held:

Yes. There was justification for reducing the number of workers in respondent's factory
by the introduction of machinery in the manufacture of its products. There is no question as to
the right of the manufacturer to use new labor-saving devices with the view to effecting more
economy and efficiency in its method of production. But the right to reduce personnel should not
be abused. It should not be made a pretext for easing out laborers on account of their union
activities. But neither should it be denied when it is shown that they are not discharging their
duties in a manner consistent with good discipline and efficient operation of an industrial
enterprise.
 Tiong King vs. Court of Industrial Relations and the National Tailor's Association

G.R. No. L-3587 December 21, 1951

Employer may close his business, provided the same was done in good faith and
beyond his control.

Facts:

Gaw Pun So transfer his business to petitioner Tiong King by leasing the place and the
sewing machines and the latter continued the shirt factory with the same employees. Petitioner
put up a capital of P7000 but later on he filed a petition to close the business in court of
Industrial Relation alleging that he continually suffered losses since he operated his shop.

Issue: WON the petition to close the business be granted

Held:

Yes. Tiong King's capital invested in the Army Shirt Factory was almost exhausted at the
time of the filing of his petition to close it, said petition must be necessity be granted. It is
admitted by all the Judges of the Court of Industrial Relations that an employer may close his
business, provided the same was done in good faith and beyond his control.
 Pan American World Airways System (Philippines) vs Pan American Employees
Association

G.R No. L-16275 February 23, 1961

If the employees were required to be on standby even during meal period, such meal
period is considered as hours worked.

Facts:

In an appeal by certiorari the petitioner questioned the decision of the Court of Industrial
Relations that the finding that the one-hour meal period should be considered overtime work
(deducting 15 minutes as time allotted for eating) is not supported by substantial evidence.
Petitioner herein claims that the one-hour meal period should not be considered as overtime
work (after deducting 15 minutes), because the evidence showed that complainants could rest
completely, and were not in any manner under the control of the company during that
period. But the court found that during the so called meal period, the mechanics were required
to stand by for emergency work; that if they happened not to be available when called, they
were reprimanded by the leadman; that as in fact it happened on many occasions, the
mechanics had been called from their meals or told to hurry Employees Association up eating to
perform work during this period

Issue: WON the one hour meal period of the mechanics be considered as hours worked

Held:

Yes. The court found that during the so called meal period, the mechanics were required
to stand by for emergency work; that if they happened not to be available when called, they
were reprimanded by the lead man. During the meal period the complainants could not
completely and still under the control of the company during that period.
National Shipyards and Steel Corporation vs Court of Industrial Relations and Dominador
Malondras

G.R No. L-17068 December 30, 1961

The criterion in determining whether or not sailors are entitled to overtime pay is not
whether they were on board and cannot leave ship beyond the regular 8 working hours a day,
but whether they actually rendered service in excess of said number of hours.

Facts:

Petitioner NAASCO, 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. In order that it's bargeman could immediately be called to duty whenever their services
are needed, they are required to stay in their respective barges. They may leave their barges
when said barges are idle. On April 15, 1957, crew members if petitioner's tugboat service,
including Malondras, filed with the Industrial Court a complaint for the payment of overtime
compensation base on the facts- 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 hours a day
and/or during Sundays and legal holidays. And the petitioners are paid by the respondent their
regular salaries and subsistence allowance, without additional compensation for overtime work.
In the process of determining the overtime pay for the crew members, Malondras was not
included as his daily time sheets were not then available. Upon re-examination the examiner,
relying on the respondent's daily time sheets stating that almost every day Malondras was on
detail or detailed on board, meaning he was in his barge for 24 hours, it is found that Malondras
was entitled to an overtime pay for sixteen hours.

Issue: WON the determination of hours work for seafarers be based on their stay on board

Held:

No. Seamen are required to stay on board their vessels by the very nature of their
duties. 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 16 hours each day, even if he has 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 whether they were on board and cannot
leave ship beyond the regular 8 working hours a day, but whether they actually rendered service
in excess of said number of hours.
 Cagampan et al vs NLRC

G.R. Nos. 85122-24 March 22, 1991

The criterion in determining whether or not sailors are entitled to overtime pay is not
whether they were on board and cannot leave ship beyond the regular 8 working hours a day,
but whether they actually rendered service in excess of said number of hours.

Facts:

Petitioners, all seamen, entered into contracts of employment with Golden Light Ocean
Transport, Ltd., through its local agency, private respondent Ace Maritime Agencies Inc.
Thereafter, petitioners collectively and/ or individually filed complaints for non-payment of
overtime pay, vacation pay and terminal pay against private respondent. The POEA rendered a
decision dismissing petitioner's claim for terminal pay but granted their prayer for leave pay and
overtime pay. Upon appeal, NLRC reversed the decision of the POEA.

Issue: WON the petitioners were entitled to overtime pay.

Held:

No. The NLRC ruling on the disallowance of overtime pay is ably supported by the fact
that petitioners never produced any proof of actual performance of overtime work. The
petitioners erroneously theorized the package benefit on the contract that even without evidence
of actual rendition of overtime work, they would automatically be entitled to overtime pay. The
contract provision guarantees the right to overtime pay but the entitlement to such benefit must
first be established. Realistically speaking, a seaman, by the very nature of hid job, stay on
board a ship or vessel beyond the 8-hour work schedule and the way to determine whether they
are entitled to overtime pay is whether they actually rendered service in excess of said number
of hours.
 National Development Company vs CIR

G.R No. L-15422 November 30, 1962

In case of continuous work, mealtime period should be counted as working time for
purposes of overtime compensation

Facts:

At the National Development Company there were four shifts of work and in each shift,
there was a one-hour mealtime period. Although there was a one-hour work for each shift, the
petitioner nevertheless credited the workers with eight hours of work and pay them for the same
number of hours. However when workers were required to continue working till the next shift,
petitioner only paid them for six hours, that the two hours corresponding to the mealtime periods
should not be included in computing compensation.

Issue: WON the work in the petitioner's company continuous and the mealtime period be
counted as hours worked.

Held:

Yes. The court sustain the ruling of the CIR that work in the petitioner company was
continuous and therefore the mealtime breaks should be counted as working time for purposes
of overtime compensation. Petitioner gives an eight-hour credit to its employees who work a
single shift say from 6am to 2pm. Why cannot it credit them sixteen hours should they work in
two shifts?
 Sime Darby Pilipinas, Inc vs NLRC

G.R No. 119205 April 15, 1998

Changing the 30-minute paid lunch break to a non-paid one hour lunch break and
extending one hour to the working hours is not a violation to the Labor Code.

Facts:

Petitioner change the work schedule and discontinuance of the 30-minute paid on call
lunch break, give the employees one hour lunch break and the work schedule be 7:45 am - 4:45
pm from 7:45 am- 3:45 pm. The private respondents felt adversely by the change and filed on
behalf of its members in the Labor Arbiter for labor practice, discrimination and evasion of
liability.

Issue: WON that petitioner committed unfair labor practice in the implementation of the change
in the work schedule of its employees by extending the work hours for one hour with one hour
lunch break.

Held:

No. The right to fix the work schedules of the employees rests principally on their
employer. In the instant case petitioner, as the employer, cites as reason for the adjustment the
efficient conduct of its business operations and its improved production. 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. We agree with the Labor Arbiter that the new work schedule
fully complies with the daily work period of eight (8) hours without violating the Labor Code. The
management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner of
work, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and discipline, dismissal and recall of
workers. Further, management retains the prerogative, whenever exigencies of the service so
require, to change the working hours of its employees. So long as such prerogative is exercised
in good faith for the advancement of the employer's interest and not for the purpose of defeating
or circumventing the rights of the employees under special laws or under valid agreements
Court will uphold such exercise.
 Union of Filipro Employees vs Benigno Vivar Jr., NLRC and Nestle Philippnes

G.R No. 79255 January 20, 1992

Field Personnel whose time and performance is unsupervised by the employer is not
entitled to Holiday pay.

Facts:

Respondent Filed with the NLRC a petition for declaratory relief seeking a ruling on its
rights and obligations respecting claims of its monthly paid employees for holiday pay. The
petitioner insists that respondent's sales personnel are not field personnel under Article 82 of
the Labor Code. The respondent company controverts this assertion. It is undisputed that these
sales personnel start their field work at 8:00 a.m. after having reported to the office and come
back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based. The petitioner maintains
that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales personnel's working
hours which can be determined with reasonable certainty.

Issue: WON Nestle’s sales personnel are entitled to holiday pay

Held:

No. The law requires that the actual hours of work in the field be reasonably ascertained.
The company has no way of determining whether or not these sales personnel, even if they
report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m, really spend
the hours in between in actual field work. Moreover, the requirement that "actual hours of work
in the field cannot be determined with reasonable certainty" must be read in conjunction with
Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

xxx xxx xxx

(e) Field personnel and other employees whose time and performance is
unsupervised by the employer . . .

The Supervisor of the day schedule adverted to by the petitioner does not in the least signify
that these sales personnel's time and performance are supervised. The purpose of this
schedule is merely to ensure that the sales personnel are out of the office not later than 8:00
a.m. and are back in the office not earlier than 4:00 p.m.
 San Miguel Brewery, Inc. vs. Democratic Labor Organization, et al.

G.R No. L-18353 July 31, 1963

Field sales personnel receiving monthly salary plus commission on percentage basis of
his sales classified as if he was on his piece work basis are not subject to the eight-hour labor
law.

Facts:

After the morning roll call, the employees leave the plant of the company to go on their
respective sales routes either at 7:00 a.m. for soft drinks trucks, or 8:00 a.m. for beer trucks.
They do not have a daily time record. The company never required them to start their work as
outside sales personnel earlier than the above schedule. The sales routes are so planned that
they can be completed within 8 hours at most, or that the employees could make their sales on
their routes within such number of hours variable in the sense that sometimes they can be
completed in less than 8 hours, sometimes 6 to 7 hours, or more. The moment these outside or
field employees leave the plant and while in their sales routes they are on their own, and often
times when the sales are completed, or when making short trip deliveries only, they go back to
the plant, load again, and make another round of sales. These employees receive monthly
salaries and sales commissions in variable amounts. It is contended that since the employees
concerned are paid a commission on the sales they make outside of the required 8 hours
besides the fixed salary that is paid to them, the Court of Industrial Relations erred in ordering
that they be paid an overtime compensation as required by the Eight-Hour Labor Law for the
reason that the commission they are paid already takes the place of such overtime
compensation.

Issue: WON the employees are under the eight hour labor law.

Held:

No. employees concerned are paid a fixed salary for their month of service, but for their
extra work they are paid a commission which is in lieu of the extra compensation to which they
are entitled. The record shows that these employees during the period of their employment were
paid sales commission ranging from P30, P40, sometimes P60, P70, to sometimes P90, P100
and P109 a month depending on the volume of their sales and their rate of commission per
case. And so, insofar is the extra work they perform, they can be considered as employees paid
on piece work, "pakiao", or commission basis. The Department of Labor, called upon to
implement, the Eight-Hour Labor Law, is of this opinion when on December 9, 1957 it made the
ruling on a query submitted to it, thru the Director of the Bureau of Labor Standards, to the effect
that field sales personnel receiving regular monthly salaries, plus commission, are not subject to
the Eight-Hour Labor Law.
 Auto Bus Transport Systems, Inc. vs Antonio Bautista:

GR No. 156367 May 16, 2005

In order to conclude whether an employee is a field employee, it is necessary to

ascertain if actual hours of work in the field can be determined with reasonable certainty by the
employer.

Facts:

Respondent, who was paid on commission basis, seven percent of the total gross
income per travel, on a twice a month basis, had an accident and a month later the
management the management sent him a letter of termination. Later on respondent instituted a
complaint for illegal dismissal with money claims for non-payment of 13th month pay and service
incentive leave pay. The labor arbiter granted the payment of respondent’s claim for service
incentive leave. Hence the instant petition of the petitioner claiming that respondent is not
entitled to the grant of service incentive leave just because he was paid on purely commission
basis. It is observed by the labor arbiter that that along the routes that are plied by these bus
companies, there are its inspectors assigned at strategic places who board the bus and inspect
the passengers, the punched tickets, and the conductors reports. There is also the mandatory
once-a-week car barn or shop day, where the bus is regularly checked as to its mechanical,
electrical, and hydraulic aspects, whether or not there are problems thereon as reported by the
driver and/or conductor. They too, must be at specific place as specified time, as they generally
observe prompt departure and arrival from their point of origin to their point of destination. In
each and every depot, there is always the Dispatcher whose function is precisely to see to it that
the bus and its crew leave the premises at specific times and arrive at the estimated proper
time.

Issue: WON respondent is considered as field personnel

Held:

No the respondent is not considered as field personnel. Petitioner argues that the only
criterion that should be considered is the nature of work of the employee in that, if the
employees job requires that he works away from the principal office like that of a messenger or
a bus driver, then he is inevitably a field personnel. The court was not persuaded. It is
necessary to stress that the definition of a field personnel is not merely concerned with the
location where the employee regularly performs his duties but also with the fact that the
employee’s performance is unsupervised by the employer. Field personnel are those who
regularly perform their duties away from the principal place of business of the employer and
whose actual hours of work in the field cannot be determined with reasonable certainty. Thus, in
order to conclude whether an employee is a field employee, it is also necessary to ascertain if
actual hours of work in the field can be determined with reasonable certainty by the employer. In
so doing, an inquiry must be made as to whether or not the employee’s time and performance
are constantly supervised by the employer.
 Bisig ng Manggaggawa ng Philippine Refining Co., Inc. vs Philippine Refining Co., Inc.

GR No. L-27761 September 30, 1981

Overtime pay is based only on the regular basic pay, exclusive of Christmas bonus and
other fringe benefits.

Facts:

Petitioner union contends that the respondent company was under obligation to include
the employees’ Christmas bonus and other fringe benefits in the computation of their overtime
pay base on their CBA. The respondent on the other hand alleged that never did the parties
intend, in the 1965 collective bargaining agreement and in prior agreements, to include the
employees' Christmas bonus and other fringe benefits in the computation of the overtime pay
and that the company precisely agreed to a rate of 50%, which is much higher than the 25%
required by the Eight-Hour Labor Law (Commonwealth Act No. 444, as amended), on the
condition that in computing the overtime pay only the "regular base pay" would be considered.

Issue: WON the phrase regular basic pay includes Christmas bonus and other fringe benefits

Held:

No. 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 the enforcement of the collective bargaining
agreement 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.
 Manuel Lara, et al. vs Petronilo del Rosario

GR No. L-6339 April 20, 1954

Laborer or employee with no fixed salary, wages or remuneration but receiving as

compensation from his employer uncertain and variable amount depending upon the work done
or the result of said work (piece work) irrespective of the amount of time employed, is not
covered by the Eight-Hour Labor Law and is not entitled to extra compensation should he work
in excess of 8 hours a day.

Facts:

Without giving his mechanics and chauffeurs 30 days advance notice, defendant sold his
25 units to La Mallorca and according to the mechanics and chauffeurs above-mentioned they
lost their jobs because the La Mallorca failed to continue them in their employment. They
brought this action against Del Rosario to recover compensation for overtime work rendered
beyond eight hours and on Sundays and legal holidays. According to the facts in the lower
courts, parties are agreed that the plaintiffs as chauffeurs received no fixed compensation
based on the hours or the period of time that they worked. Rather, they were paid on the
commission basis, that is to say, each driver received 20 per cent of the gross returns or
earnings from the operation of his taxi cab. Plaintiffs claim that as a rule, each drive operated a
taxi 12 hours a day with gross earnings ranging from P20 to P25, receiving therefrom the
corresponding 20 per cent share ranging from P4 to P5, and that in some cases, especially
during Saturdays, Sundays, and holidays when a driver worked 24 hours a day he grossed from
P40 to P50, thereby receiving a share of from P8 to P10 for the period of twenty-four hours.

Issue: WON plaintiffs are entitled to extra compensation for work performed in excess of 8
hours a day, Sundays and holidays included.

Held:

No. A laborer or employee with no fixed salary, wages or remuneration but receiving as
compensation from his employer uncertain and variable amount depending upon the work done
or the result of said work (piece work) irrespective of the amount of time employed, is not
covered by the Eight-Hour Labor Law and is not entitled to extra compensation should he work
in excess of 8 hours a day. And this seems to be the condition of employment of the plaintiffs. A
driver in the taxi business of the defendant, like the plaintiffs, in one day could operate his taxi
cab eight hours, or less than eight hours or in excess of 8 hours, or even 24 hours on
Saturdays, Sundays, and holidays, with no limit or restriction other than his desire, inclination
and state of health and physical endurance. He could drive continuously or intermittently,
systematically or haphazardly, fast or slow, etc. depending upon his exclusive wish or
inclination. One day when he feels strong, active and enthusiastic he works long, continuously,
with diligence and industry and makes considerable gross returns and receives as much as his
20 per cent commission. Another day when he feels despondent, run down, weak or lazy and
wants to rest between trips and works for less number of hours, his gross returns are less and
so is his commission. In other words, his compensation for the day depends upon the result of
his work, which in turn depends on the amount of industry, intelligence and experience applied
to it, rather than the period of time employed. In short, he has no fixed salary or wages.
 Charlito Peñaranda vs Baganga Plywood

GR No. 159577 May 3, 2006

Managerial employees and members of the managerial staff are not entitled to overtime
pay and premium pay for working on workdays.

Facts:

Penaranda, petitioner, was hired as an employee of the respondent to take charge of the
operations and maintenance of its steam plant broiler. Later petitioner filed a complaint for illegal
dismissal with money claims against BPC and its general manager, claiming that he was not
paid his overtime pay, premium pay for working during holidays/rest days, night shift
differentials. On the other hand respondent averred that being a managerial employee petitioner
is not entitled to overtime pay and if ever he rendered services beyond the normal hours of
work, [there] was no office order/or authorization for him to do so.

Issue: WON petitioner is entitled to overtime pay and other monetary benefits

Held:

No. petitioner was a member of the managerial staff, which also takes him out of the
coverage of labor standards. Like managerial employees, officers and members of the
managerial staff are not entitled to the provisions of law on labor standards. The Implementing
Rules of the Labor Code define members of a managerial staff as those with the following duties
and responsibilities:

"(1) The primary duty consists of the performance of work directly related to
management policies of the employer;

"(2) Customarily and regularly exercise discretion and independent judgment;

"(3) (i) Regularly and directly assist a proprietor or a managerial employee whose
primary duty consists of the management of the establishment in which he is employed
or subdivision thereof; or (ii) execute under general supervision work along specialized
or technical lines requiring special training, experience, or knowledge; or (iii) execute
under general supervision special assignments and tasks; and

"(4) who do not devote more than 20 percent of their hours worked in a workweek to
activities which are not directly and closely related to the performance of the work
described in paragraphs (1), (2), and (3) above."

As shift engineer, petitioner’s duties and responsibilities were as follows:

"1. To supply the required and continuous steam to all consuming units at minimum cost.

"2. To supervise, check and monitor manpower workmanship as well as operation of

boiler and accessories.
 "3. To evaluate performance of machinery and manpower.

"4. To follow-up supply of waste and other materials for fuel.

"5. To train new employees for effective and safety while working.

"6. Recommend parts and supplies purchases.

"7. To recommend personnel actions such as: promotion, or disciplinary action.

"8. To check water from the boiler, feedwater and softener, regenerate softener if
beyond hardness limit.

"9. Implement Chemical Dosing.

"10. Perform other task as required by the superior from time to time."

The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner was a
member of the managerial staff. His duties and responsibilities conform to the definition of a
member of a managerial staff under the Implementing Rules.

Petitioner supervised the engineering section of the steam plant boiler. His work involved
overseeing the operation of the machines and the performance of the workers in the
engineering section. This work necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is
deemed a member of the managerial staff.
 LUZON STEVEDORING CO., INC., vs. LUZON MARINE DEPARTMENT UNION

G.R. No. L-9265 April 29, 1957

A seaman need not leave the premises of the boat in order that his period of rest
shall not be counted, it being enough that he "cease to work", may rest completely and leave or
may leave at his will the spot where he actually stays while working

Facts:

Respondent filed a petition with the CIR containing several demands against petitioner
including That the work performed in excess of eight (8) hours he paid an overtime pay of 50
per cent the regular rate of pay, and that work performed on Sundays and legal holidays be paid
double the regular rate of pay. After the parties had submitted exhaustive memoranda, the trial
Judge rendered a decision finding that the petitioner gave said employees 3 free meals every
day and about 20 minutes rest after each mealtime; that they worked from 6:00 am. to 6:00 p.m.
every day including Sundays and holidays, and for work performed in excess of 8 hours, the
officers, patrons and radio operators were given overtime pay in the amount of P4 each and P2
each for the rest of the crew up to March, 1947, and after said date, these payments were
increased to P5 and P2.50, respectively. Petitioners sought for reconsideration o far as it
interpreted that the period during which a seaman is aboard a tugboat shall be considered as
"working time" for the purpose of the Eight-Hour-Labor Law.

Issue: WON the time spent of a seaman on a ship be considered as hours worked

Held:

No. It has been the consistent stand of petitioner that while it is true that the workers
herein were required to report for work at 6:00 a.m. and were made to stay up to 6:00 p.m., their
work was not continuous and they could have left the premises of their working place were it not
for the inherent physical impossibility peculiar to the nature of their duty which prevented them
from leaving the tugboats. Section 1 of Commonwealth Act No. 444, known as the Eight-Hour
Labor Law, provides:
SEC. 1. The legal working day for any person employed by another shall be of not more
than eight hours daily. When the work is not continuous, the time during which the
laborer is not working AND CAN LEAVE HIS WORKING PLACE and can rest
completely, shall not be counted.
For the purpose the case, the court did not need to set for seamen a criterion different from that
applied to laborers on land, for under the provisions of the above quoted section, the only thing
to be done is to determine the meaning and scope of the term "working place" used therein. As
the court understands this term, a laborer need not leave the premises of the factory, shop or
boat in order that his period of rest shall not be counted, it being enough that he "cease to
work", may rest completely and leave or may leave at his will the spot where he actually stays
while working, to go somewhere else, whether within or outside the premises of said factory,
shop or boat. If these requisites are complied with, the period of such rest shall not be counted.
 MERCURY DRUG CO., INC, vs. NARDO DAYAO, ET AL

G.R. No. L-30452 September 30, 1982

Right to night differential pay cannot be waived

Facts:

A verified petition was filed by respondent against petitioner praying for payment of extra
compensation work done at night before the CIR. CIR rendered its decision in favor of
respondent and ordered petitioner to pay additional sum or premium equivalent to 25% of their
respective basic or regular salaries for nighttime services. Petitioner contended that the
respondent court's ruling on the additional compensation for nighttime work is not supported by
substantial evidence. Petitioner’s contention is untenable. Pertinent portions of the CIR’s
decision read:

XXXXXX

There is no serious disagreement between the petitioners and respondent management

on the facts recited above. The variance in the evidence is only with respect to the
money claims. Witnesses for petitioners declared they worked on regular days and on
every other Sunday and also during all holidays; that for services rendered on Sundays
and holidays they were not paid for the first four (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; and that such payment is being indicated in the overtime pay for
work done in excess of eight hours on regular working days. It is also claimed that their
nighttime services could well be seen on their respective daily time records.

Issue: WON the respondent is entitled to the additional compensation for his nighttime services

Held:

Yes. CIR’s ruling on additional compensation for work done at night is, therefore, not
without evidence. The petitioner-company did not deny that the private respondents rendered
nighttime work. In fact, no additional evidence was necessary to prove that the private
respondents were entitled to additional compensation for whether or not they were entitled to
the same is a question of law which the respondent 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. CIR acted according to justice and equity and
the substantial merits of the case, without regard to technicalities or legal forms and should be
sustained.
 NATIONAL SUGAR REFINERIES CORPORATION, vs. NATIONAL LABOR RELATIONS
COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP,

G.R. No. 101761. March 24, 1993.

Supervisory employees are considered as officers or members of the managerial staff

under Article 82, Book III of the same Code, and hence are not entitled to overtime rest day and
holiday pay.

Facts:

Petitioner, a corporation which is fully owned and controlled by the Government,

operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. The Batangas
refinery was privatized on April 11, 1992 pursuant to Proclamation No. 50. 1 Private respondent
union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery.
Petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-
file to department heads. For about ten years prior to the JE Program, the members of
respondent union were treated in the same manner as rank-and file employees. As such, they
used to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles 87, 93
and 94 of the Labor Code as amended. With the implementation of the JE Program, the
following adjustments were made: (1) the members of respondent union were re-classified
under levels S-5 to S-8 which are considered managerial staff for purposes of compensation
and benefits; (2) there was an increase in basic pay of the average of 50% of their basic pay
prior to the JE Program, with the union members now enjoying a wide gap (P1,269.00 per
month) in basic pay compared to the highest paid rank-and-file employee; (3) longevity pay was
increased on top of alignment adjustments; (4) they were entitled to increased company COLA
of P225.00 per month; (5) there was a grant of P100.00 allowance for rest day/holiday work.
Two years after the implementation of the JE Program, specifically on June 20, 1990, the
members of herein respondent union filed a complainant with the executive labor arbiter for non-
payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor
Code.

Issue: WON the union members as supervisory employees are to be considered as officers or
members of the managerial staff who are exempt from the coverage of Art. 82 of the Labor
Code

Held:

Yes. It is not disputed that the members of respondent union are supervisory
employees, as defined employees, as defined under Article 212(m), Book V of the Labor Code
on Labor Relations, which reads:

"(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged,
assign or discipline employees. Supervisory employees are those who, in the interest of the
employer effectively recommend such managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of those above definitions are considered rank-and-file
employees of this Book."

While the members of respondent union, as supervisors, may not be occupying managerial
positions, they are clearly officers or members of the managerial staff because they meet all the
conditions prescribed by law and, hence, they are not entitled to overtime, rest day and
supervisory employees under Article 212 (m) should be made to apply only to the provisions on
Labor Relations, while the right of said employees to the questioned benefits should be
considered in the light of the meaning of a managerial employee and of the officers or members
of the managerial staff, as contemplated under Article 82 of the Code and Section 2, Rule I
Book III of the implementing rules. These supervisory employees are likewise responsible for
the effective and efficient operation of their respective departments. With the promotion of the
union members, they are no longer entitled to the benefits which attach and pertain exclusively
to their positions. Entitlement to the benefits provided for by law requires prior compliance with
the conditions set forth therein. With the promotion of the members of respondent union, they
occupied positions which no longer met the requirements imposed by law. Their assumption of
these positions removed them from the coverage of the law, ergo, their exemption therefrom.
 MANILA TERMINAL COMPANY, INC. vs. THE COURT OF INDUSTRIAL RELATIONS and
MANILA TERMINAL RELIEF AND MUTUAL AID ASSOCIATION,

G.R. No. L-4148 July 16, 1952

Laborers cannot waive their right to extra compensation.

Facts:

Petitioner hired some thirty men as watchmen on twelve-hour shifts at a compensation

of P3 per day for the day shift and P6 per day for the night shift. On February 1, 1946, the
petitioner began the postwar operation of the arrastre service at the present at the request and
under the control of the Bureau of Customs, by virtue of a contract entered into with the
Philippine Government. The watchmen of the petitioner continued in the service with a number
of substitutions and additions, their salaries having been raised during the month of February to
P4 per day for the day shift and P6.25 per day for the nightshift. Manila Terminal Relief and
Mutual Aid Association filed a petition with the Court of Industrial Relations praying, among
others, that the petitioner be ordered to pay its watchmen or police force overtime pay from the
commencement of their employment. The important point stressed by the petitioner is that the
contract between it and the Association upon the commencement of the employment of its
watchman was to the certain rates of pay, including overtime compensation namely, P3 per day
for the day shift and P6 per day for night shift beginning September 1, 1945, and P4 per day
shift and P6.25 per day for the night shift since February, 1946. The record does not bear out
these allegations. The petitioner has relied merely on the facts that its watchmen had worked on
twelve-hour shifts at specific wages per day and that no complaint was made about the matter

Issue: WON the respondent is already barred from recovery by estoppel and laches

Held:

No. The Association cannot be said to have impliedly waived the right to overtime
compensation, for the obvious reason that they could not have expressly waived it."

The principle of estoppel and the laches cannot well be invoked against the Association. In the
first place, it would be contrary to the spirit of the Eight Hour Labor Law, under which as already
seen, the laborers cannot waive their right to extra compensation. In the second place, the law
principally obligates the employer to observe it, so much so that it punishes the employer for its
violation and leaves the employee or laborer free and blameless. In the third place, the
employee or laborer is in such a disadvantageous position as to be naturally reluctant or even
apprehensive in asserting any claim which may cause the employer to devise a way for
exercising his right to terminate the employment.

If the principle of estoppel and laches is to be applied, it may bring about a situation, whereby
the employee or laborer, who cannot expressly renounce their right to extra compensation
under the Eight-Hour Labor Law, may be compelled to accomplish the same thing by mere
silence or lapse of time, thereby frustrating the purpose of law by indirection.
 UNIVERSITY OF PANGASINAN FACULTY UNION, v. UNIVERSITY OF PANGASINAN And
NATIONAL LABOR RELATIONS COMMISSION

G.R. No. L-63122. February 20, 1984

Regular full-time monthly paid teachers in private school are entitled to salary and
ECOLA during semestral breaks.

Facts:

The petitioner is composed of faculty members of the respondent University, and

they filed a complaint seeking the payment of their ECOLA for November 7 to December 5,
1981, a semestral break. The petitioner’s members are full-time professors, instructors, and
teachers of respondent University. The teachers in the college level teach for a normal duration
of ten (10) months a school year, divided into two (2) semesters of five (5) months each,
excluding the two (2) months summer vacation. These teachers are paid their salaries on a
regular monthly basis. 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: WON petitioners are entitled to ECOLA during the Semestral break

Held:

Yes. 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. The duration of the semestral break varies from
year to year dependent on a variety of circumstances affecting at times only the private
respondent but at other times all educational institutions in the country. As such, these breaks
cannot be considered as absences within the meaning of the law for which deductions may be
made from monthly allowances. The "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. Petitioners, in the case at bar, certainly do not, ad voluntatem,
absent themselves during semestral breaks. Rather, they are constrained to take mandatory
leave from work. For this they cannot be faulted nor can they be begrudged that which is due
them under the law. To a certain extent, the private respondent can specify dates when no
classes would be held. Surely, it was not the intention of the framers of the law to allow
employers to withhold employee benefits by the simple expedient of unilaterally imposing "no
work" days and consequently avoiding compliance with the mandate of the law for those days.

Furthermore, we may also by analogy apply 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:

"(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.
MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO, President, vs.
THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF LABOR,
REGION X,

G.R. No. 78909 June 30, 1989

Labor standards refer to the minimum requirements prescribed by existing laws, rules,
and regulations relating to wages, hours of work, cost of living allowance and other monetary
and welfare benefits, including occupational, safety, and health standards.

Facts:

Petitioner is a semi-government hospital which derives its finances from the club itself as
well as from paying patients, averaging 130 per month. It is also partly subsidized by the
Philippine Charity Sweepstakes Office and the Cagayan De Oro City government. Ten (10)
employees of the petitioner employed in different capacities/positions filed a complaint with the
Office of the Regional Director of Labor and Employment, Region X, for underpayment of their
salaries and ECOLAS. Labor Standard and Welfare Officers submitted their report confirming
that there was underpayment of wages and ECOLAs of all the employees by the petitioner.
Based on the inspection report and recommendation, the Regional Director issued an Order
dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of
wages and ECOLAs to all the petitioner's employees

Issue: WON the Regional Director had jurisdiction over the case and if so, the extent of
coverage of any award that should be forthcoming, arising from his visitorial and enforcement
powers under Article 128 of the Labor Code

Held:

Yes. This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as
amended by E.O. No. 111. Labor standards refer to the minimum requirements prescribed by
existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance
and other monetary and welfare benefits, including occupational, safety, and health standards.
Under the present rules, a Regional Director exercises both visitorial and enforcement power
over labor standards cases, and is therefore empowered to adjudicate money
claims, provided there stillexists an employer-employee relationship, and the findings of the
regional office is not contested by the employer concerned. In case, petitioner admitted the
charge of underpayment of wages to workers still in its employ; in fact, it pleaded for time to
raise funds to satisfy its obligation. There was thus no contest against the findings of the labor
inspectors.
 Calalang vs. Williams
G.R. No. 47800 December 2, 1940

Social justice means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the competent elements
of society, through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through the adoption of
measures legally justifiable, or extraconstitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principle of salus populi est suprema lex.

Facts:
A resolution by the National Traffice Commission that animal drawn vehicles be
prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to
Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along
Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7
a.m. to 11 p.m., for a period of one year from the date of the opening of the Colgante Bridge to
traffic was approved and adopted by the Secretary of Public Works and Communications upon
endorsement by the Director of Public Works pursuant to Commonwealth Act 548 with
modifications that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles,
between the points and during the hours as indicated. The Mayor of Manila and the Acting Chief
of Police of Manila have enforced and caused to be enforced the rules and regulations. Maximo
Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before the
Supreme Court the petition for a writ of prohibition against A. D. Williams, as Chairman of the
National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as
Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City
of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.

Issue: WON the rules and regulations promulgated by the Director of Public Works infringes
upon the constitutional precept regarding the promotion of social justice

Held:

No. The promotion of social justice, however, is to be achieved not through a mistaken
sympathy towards any given group. Social justice is “neither communism, nor despotism, nor
atomism, nor anarchy,” but the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure economic stability of
all the competent elements of society, through the maintenance of a proper economic and social
equilibrium in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extraconstitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle of salus populi est
suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that should
be equally and evenly extended to all groups as a combined force in our social and economic
life, consistent with the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about “the greatest good to the greatest
number.”
 THE PEOPLE OF THE PHILIPPINES, vs. FRANCO VERA REYES,

G.R. No. L-45748 April 5, 1939

Police power is the power inherent in a government to enact laws, within constitutional
limits, to promote the order, safety, health, morals, and general welfare of society.

Facts:

The defendant was charged in the Court of First Instance of Manila by the assistant city
fiscal with a violation of Act No. 2549, as amended by Acts Nos. 3085 and 3958 that in his
capacity as president and general manager of the Consolidated Mines, having engaged the
services of Severa Velasco de Vera as stenographer, at an agreed salary of P35 a month
willfully and illegally refused to pay the salary of said stenographer corresponding to the above-
mentioned period of time, which was long due and payable, in spite of her repeated demands..
The accused interposed a demurrer on the ground that the facts alleged in the information do
not constitute any offense, and that even if they did, the laws penalizing it are unconstitutional.
After the hearing, the court sustained the demurrer, declaring unconstitutional the last part of
section 1 of Act No. 2549 as last amended by Act No. 3958, which considers as an offense the
facts alleged in the information, for the reason that it violates the constitutional prohibition
against imprisonment for debt, and dismissed the case, with costs de oficio.

Issue: WON the last part of Sec. 1 of Act No. 2594 as amended by Act No. 3958 is
constitutional and valid.

Held:

Yes. A close perusal of the last part of section 1 of Act No. 2549, as amended by
section 1 of Act No. 3958, will show that its language refers only to the employer who, being
able to make payment, shall abstain or refuse to do so, without justification and to the prejudice
of the laborer or employee. Police power is the power inherent in a government to enact laws,
within constitutional limits, to promote the order, safety, health, morals, and general welfare of
society. In the exercise of this power the Legislature has ample authority to approve the
disputed portion of Act No. 3958 which punishes the employer who, being able to do so, refuses
to pay the salaries of his laborers or employers in the specified periods of time. Undoubtedly,
one of the purposes of the law is to suppress possible abuses on the part of employers who hire
laborers or employees without paying them the salaries agreed upon for their services, thus
causing them financial difficulties. Without this law, the laborers and employees who earn
meager salaries would be compelled to institute civil actions which, in the majority of cases,
would cost them more than that which they would receive in case of a decision in their favor.
 People vs. Pomar

G.R. No. L-22008; November 3, 1924

Police power cannot grow faster than the fundamental law of the state, nor transcend or
violate the Constitution.

Facts:

The prosecuting attorney of the City of Manila presented a complaint in the Court of First
Instance, accusing the defendant of a violation of Section 13 in connection with Section 15 of
Act No. 3071 of the Philippine Legislature. The complaint alleged that the defendant being the
manager and person in charge of La Flor de la Isabela failed and refused to pay Macaria
Fajardo, employed as a cigar maker, the sum of P80 to which she was entitled as her regular
wages on time of delivery and confinement by reason of pregnancy despite and over the
demands to do so. The defendant demurred in said complaint, alleging that the facts contained
did not constitute an offense. The demurrer was overruled, whereupon the defendant answered
and admitted at the trial all of the allegations contained in the complaint, and contended that the
provisions of said Act No. 3071, upon which the complaint was based were illegal,
unconstitutional and void. Upon a consideration of the facts charged in the complaint and
admitted by the defendant, the court found the defendant guilty of the alleged offense described
in the complaint, and sentenced him to pay a fine of P50, in accordance with the provisions of
Section 15 of said Act, to suffer subsidiary imprisonment in case of insolvency, and to pay the
costs.

Issue: WON the provisions of Sections 13 and 15 of Act No. 3071 are a reasonable and lawful
exercise of the police power of the state.

Held:

No. The provisions of Section 13, of Act No. 3071 of the Philippine Legislature, are
unconstitutional and void, in that they violate and are contrary to the provisions of the first
paragraph of Section 3 of the Act of Congress of the United States of August 29, 1916. Said
Section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its
supposed police power, with the praiseworthy purpose of safeguarding the health of pregnant
women laborers in "factory, shop or place of labor of any description," and of insuring to them,
to a certain extent, reasonable support for one month before and one month after their delivery.
It has been said that the particular statute before us is required in the interest of social justice for
whose end freedom of contract may lawfully be subjected to restraint. The right to liberty
includes the right to enter into contracts and to terminate contracts. One citizen cannot be
compelled to give employment to another citizen, nor can anyone be compelled to be employed
against his will. The Act of 1893, now under consideration, deprives the employer of the right to
terminate his contract with his employee. Clearly, therefore, the law has deprived, every person,
firm, or corporation owning or managing a factory, shop or place of labor of any description
within the Philippine Islands, of his right to enter into contracts of employment upon such terms
as he and the employee may agree upon. Such persons are, therefore, deprived of their liberty
to contract. The constitution of the Philippine Islands guarantees to every citizen his liberty and
one of his liberties is the liberty to contract. Every law for the restraint and punishment of crimes,
for the preservation of the public peace, health, and morals, must come within this category. But
the state, when providing by legislation for the protection of the public health, the public morals,
or the public safety, is subject to and is controlled by the paramount authority of the constitution
of the state, and will not be permitted to violate rights secured or guaranteed by that instrument
or interfere with the execution of the powers and rights guaranteed to the people under their law
— the constitution. The police power of the state is a growing and expanding power, but that
power cannot grow faster than the fundamental law of the state, nor transcend or violate the
express inhibition of the people's law — the constitution. If the people desire to have the police
power extended and applied to conditions and things prohibited by the organic law, they must
first amend that law.
 Philippine Association of Service Exporters, Inc. vs. Drilon

G.R. No. 81958; June 30, 1988

Police power is the state authority to enact legislation that may interfere with personal
liberty or property in order to promote the general welfare.

Facts:

The petitioner, Philippine Association of Service Exporters, Inc. (PASEI), a firm

"engaged principally in the recruitment of Filipino workers for overseas placement," challenges
the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of
Labor and Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARYSUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS," and specifically assailed for "discrimination against males or females;" that it
"does not apply to all Filipino workers but only to domestic helpers and females with similar
skills;" and that it is in violation of the right to travel. It is held likewise to be an invalid exercise of
the lawmaking power, police power being legislative, and not executive, in character. The
Solicitor General; on behalf of the respondents Secretary of Labor and Administrator of the
Philippine Overseas Employment Administration; filed a Comment in forming the Court that on
March 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states of Iraq,
Jordan, Qatar, Canada, Hong Kong, United States, Italy, Norway, Austria, and Switzerland. In
submitting the validity of the challenged "guidelines," the Solicitor General invokes the police
power of the Philippine State.

Issue: WON the challenged Department Order is a valid regulation in the nature of a police
power measure under the Constitution.

Held:

Yes. The concept of police power is well-established in this jurisdiction. It has been
defined as the "state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare." As defined, it consists of (1) an imposition of
restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an
exact definition but has been, purposely, veiled in general terms to underscore its all-
comprehensive embrace. Its scope, ever-expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits. It finds no
specific Constitutional grant for the plain reason that it does not owe its origin to the Charter.
Along with the taxing power and eminent domain, it is inherent in the very fact of statehood and
sovereignty. It is a fundamental attribute of government that has enabled it to perform the most
vital functions of governance. The police power of the State is a power coextensive with self-
protection. It may be said to be that inherent and plenary power in the State which enables it to
prohibit all things hurtful to the comfort, safety, and welfare of society. As a general rule, official
acts enjoy a presumed validity. In the absence of clear and convincing evidence to the contrary,
the presumption logically stands. The petitioner has shown no satisfactory reason why the
contested measure should be nullified. There is no question that Department Order No. 1
applies only to "female contract workers," but it does not thereby make an undue discrimination
between the sexes. It is well-settled that "equality before the law" under the Constitution does
not import a perfect Identity of rights among all men and women. "Protection to labor" does not
signify the promotion of employment alone. What is given more import in the Constitution is that
such an employment be above all, decent, just, and humane. Under these circumstances, the
Government is duty-bound to insure that our toiling expatriates have adequate protection,
personally and economically, while away from home. In this case, the Government has
evidence; evidence the petitioner cannot seriously dispute. As part of its duty, it has precisely
ordered an indefinite ban on deployment. This Court understands the grave implications the
questioned Order has on the business of recruitment. The concern of the Government,
however, is not necessarily to maintain profits of business firms. In the ordinary sequence of
events, it is profits that suffer as a result of Government regulation. The interest of the State is to
provide a decent living to its citizens.
 Cerezo vs. Atlantic Gulf & Pacific Company

G.R. No. L-10107; February 4, 1916

Where our labor statutes are based or patterned after statutes in foreign jurisdiction, the
decisions of the high courts in those jurisdictions construing and interpreting the Act should
receive the careful attention of this court in the application of our own law.

Facts:

The deceased, plaintiff Clara Cerezo’s son Jorge Ocumen was an employee of the
defendant Atlantic Gulf and Pacific Company as a day laborer on the 8th of July, 1913, assisting
in laying gas pipes on Calle Herran in the city of Manila. The digging of the trench was
completed both ways from the cross-trench in Calle Paz, and the pipes were laid therein up to
that point. The men of the deceased's gang were filling the west end, and there was no work in
the progress at the east end of the trench. Shortly after the deceased entered the trench at the
east end to answer a call of nature, the bank caved in, burying him to his neck in dirt, where he
died before he could be released. It has not been shown that the deceased had received orders
from the defendant to enter the trench at this point; nor that the trench had been prepared by
the defendant as a place to be used as a water-closet; nor that did the defendant acquiesce in
the using of this place for these purposes. The trench at the place where the accident occurred
was between 3 and 4 feet deep. Nothing remained to be done there except to refill the trench as
soon as the pipes were connected. The refilling was delayed at that place until the completion of
the connection. At the time of the accident the place where the deceased's duty of refilling the
trench required him to be was at the west end. There is no contention that there was any danger
whatever in the refilling of the trench.

The plaintiff insists that the defendant was negligent in failing to shore or brace the trench at the
place where the accident occurred. While, on the other hand, the defendant urges (1 ) that it
was under no obligation, in so far as the deceased was concerned, to brace the trench, in the
absence of a showing that the soil was of a loose character or the place itself was dangerous,
and (2) that although the relation of master and servant may not have ceased, for the time
being, to exist, the defendant was under no duty to the deceased except to do him no intentional
injury, and to furnish him with a reasonably safe place to work.

Issue: WON the plaintiff has the right to recover based on the Employers' Liability Act or the
Civil Code.

Held:

Act No. 1874 is essentially a copy of the Massachusetts Employers' Liability Act, it
having been originally enacted in that jurisdiction in 1887. The Massachusetts statute was
"copied verbatim, with some variations of detail, from the English statute. We agree with the
Supreme Court of Massachusetts that the Act should be liberally construed in favor of
employees. The main purpose of the Act was to extend the liability of employers and to render
them liable in damages for certain classes of personal injuries for which it was thought they
were liable under the law prior to the passage of the Act. We do not doubt that it was, prior to
the passage of Act No. 1874 and still is, the duty of the employer in this jurisdiction to perform
those duties, in reference to providing reasonably safe places, and safe and suitable ways,
works, and machinery, etc., So, to this extent, the first subsection of section 1 of the Act is
simply declaratory of the law as it stood previous to the enactment. Standing in this form, it is
quite clear that it was not intended that all rights to compensation and of action against
employers by injured employees or their representatives must be brought under be governed by
the Act. Assuming that the excavation for the gas pipe is within the category of "ways, works, or
machinery connected with the used in the business of the defendant, " we are of the opinion
that recovery cannot be had under the Act for the reason that, as we have indicated, the
deceased was at a place where he had no right to be at the time he met his death. His work did
not call him there, nor is it shown that he was permitted there tacitly or otherwise. Under the
Anglo-American law the applicable to such a set of facts is that the master is not responsible,
under the Employers' Liability Act, for accidents to his employees when they are outside the
scope of their employment for purpose of their own. The case under consideration does not fall
within the exceptions of Art 1105 of the Civil Code. After providing a reasonably safe place in
and about which the deceased was required to work, the defendant's liability was then limited to
those events which could have been foreseen. Article 1902 provides that a person who, by an
act or omission causes damage to another when there is fault or negligence shall be obliged to
repair the damage so done. Article 1903 after providing for the liability of principals for the acts
of their employees, agents, or these for whom they are otherwise responsible, provides that
such liability shall cease when the persons mentioned therein prove that they employed all the
diligence of a good father of family to avoid the damage. We have then, on the one hand, no
liability of an employer for events which could not be foreseen (Article 1105), and where he has
exercised the care of good father of a family (Article 1903), and, on the other hand, his liability
where fault or negligence may be attributed to him (Article 1902).The cause of Ocumen's death
was not the weight of the earth which fell upon him, but was due to suffocation. The accident
was of a most unusual character. Experience and common sense demonstrate that ordinarily no
danger to employees is to be anticipated from such a trench as that in question. The fact that
the walls had maintained themselves for a week, without indication of their giving way, strongly
indicates that the necessity for bracing or shoring the trench was remote. To require the
company to guard against such an accident as the one in question would virtually compel it to
shore up every foot of the miles of trenches dug by it in the city of Manila for the gas mains.
Upon a full consideration of the evidence, we are clearly of the opinion that ordinary care did not
require the shoring of the trench walls at the place where the deceased met his death. The
event properly comes within the class of those which could not be foreseen; and, therefore, the
defendant is not liable under the Civil Code. The act was not intended to curtail the any of the
rights which an employee had under the pre-existing law. Under the act, the defense of
contributory negligence would defeat an action for damages.
 ROSALINA PEREZ ABELLA/HDA. DANAO-RAMONA, vs. THE HONORABLE NATIONAL
LABOR RELATIONS COMMISSION, ROMEO QUITCO and RICARDO DIONELE, SR
G.R. No. 71813 July 20, 1987

In the implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the primordial and paramount
consideration.

Facts:

Petitioner leased a farm land in Monteverde, Negros Occidental, known as Hacienda

Danao-Ramona, for a period of ten (10) years, renewable, at her option, for another ten (10)
years and she opted to extend the lease contract for another ten (10) years. During the
existence of the lease, she employed the herein private respondents. Upon the expiration of her
leasehold rights, petitioner dismissed private respondents and turned over the hacienda to the
owners thereof on October 5, 1981, who continued the management, cultivation and operation
of the farm. On November 20, 1981, private respondents filed a complaint against the petitioner
at the Ministry of Labor and Employment, Bacolod City District Office, for overtime pay, illegal
dismissal and reinstatement with backwages. Labor Arbiter Manuel M. Lucas, Jr. ruled that the
dismissal is warranted by the cessation of business, but granted the private respondents
separation pay.

Issue: WON the private respondents are entitled to separation pay.

Held:

Yes. The legal basis of the Labor Arbiter in granting separation pay to the private
respondents is Batas Pambansa Blg. 130, amending the Labor Code, Section 15 of which,
specifically provides:

Sec 15 Articles 285 and 284 of the Labor Code are hereby amended to read as follows:

xxx xxx xxx

Art. 284. Closure of establishment and reduction of personnel. — The employer may
also terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establisment or undertaking unless the closing is for the purpose of
circumventing the provisions of this title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay equivalent
to at least his one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses and in cases of
closure or cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service whichever is
higher. A fraction of at least six (6) months shall be considered one (1) whole year.
The purpose of Article 284 as amended is obvious-the protection of the workers whose
employment is terminated because of the closure of establishment and reduction of personnel.
Without said law, employees like private respondents in the case at bar will lose the benefits to
which they are entitled — for the thirty three years of service in the case of Dionele and fourteen
years in the case of Quitco. Although they were absorbed by the new management of the
hacienda, in the absence of any showing that the latter has assumed the responsibilities of the
former employer, they will be considered as new employees and the years of service behind
them would amount to nothing.

Moreover, to come under the constitutional prohibition, the law must effect a change in the
rights of the parties with reference to each other and not with reference to non-parties.

As correctly observed by the Solicitor General, Article 284 as amended refers to employment
benefits to farm hands who were not parties to petitioner's lease contract with the owner of
Hacienda Danao-Ramona. That contract cannot have the effect of annulling subsequent
legislation designed to protect the interest of the working class.

In any event, it is well-settled that in the implementation and interpretation of the provisions of
the Labor Code and its implementing regulations, the workingman's welfare should be the
primordial and paramount consideration. (Volshel Labor Union v. Bureau of Labor Relations,
137 SCRA 43 [1985]). It is the kind of interpretation which gives meaning and substance to the
liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code
which states that "all doubts in the implementation and interpretation of the provisions of this
Code including its implementing rules and regulations shall be resolved in favor of labor." The
policy is to extend the applicability of the decree to a greater number of employees who can
avail of the benefits under the law, which is in consonance with the avowed policy of the State to
give maximum aid and protection to labor.
EURO-LINEA, PHILS., INC. vs. NATIONAL LABOR RELATIONS COMMISSION and JIMMY
O. PASTORAL
G.R. No. 75782 December 1, 1987

In the interpretation of the protection to labor and social justice provisions of the
constitution and the labor laws and rules and regulations implementing the constitutional
mandate, the Supreme Court has always adopted the liberal approach which favors the
exercise of labor rights.

Facts:

Petitioner hired Pastoral as shipping expediter on a probationary basis for a period of six
months. However, prior to hiring by petitioner, Pastoral had been employed by Fitscher
Manufacturing Corporation also as shipping expediter for more than one and a half years.
Pastoral was absorbed by petitioner but under a probationary basis. On February 4, 1984,
Pastoral received a memorandum dated January 31, 1984 terminating his probationary
employment effective also on February 4, 1984 in view of his failure to meet the performance
standards set by the company." To contest his dismissal, Pastoral filed a complaint for illegal
dismissal against petitioner. The Labor Arbiter found petitioner guilty of illegal dismissal and
ordering to reinstate Pastoral with six months backwages.

Issue: WON private respondent's dismissal was justifiable.

Held:

No. Petitioner not only failed to present sufficient evidence to substantiate the cause of
private respondent's dismissal, but likewise failed to cite particular acts or instances to show the
latter's poor performance. Furthermore, what makes the dismissal highly suspicious is the fact
that while petitioner claims that respondent was inefficient, it retained his services until the last
remaining two weeks of the six months probationary employment.

No less important is the fact that private respondent had been a shipping expediter for more
than one and a half years before he was absorbed by petitioner. It therefore appears that the
dismissal in question is without sufficient justification. It must be emphasized that the
prerogative of management to dismiss or lay- off an employee must be done without abuse of
discretion, for what is at stake is not only petitioner's position but also his means of
livelihood. The right of an employer to freely select or discharge his employees is subject to
regulation by the State, basically in the exercise of its paramount police power. This is so
because the preservation of the lives of the citizens is a basic duty of the State, more vital than
the preservation of corporate profits

Finally, it is significant to note that in the interpretation of the protection to labor and social
justice provisions of the constitution and the labor laws and rules and regulations implementing
the constitutional mandate, the Supreme Court has always adopted the liberal approach which
favors the exercise of labor rights.

In the instant case, it is evident that the NLRC correctly applied Article 282 in the light of the
foregoing and that its resolution is not tainted with unfairness or arbitrariness that would amount
to grave abuse of discretion or lack of jurisdiction.
 MANILA ELECTRIC COMPANY vs. THE NATIONAL LABOR RELATIONS COMMISSION,
and APOLINARIO M. SIGNO
G.R. No. 78763 July 12,1989

In carrying out and interpreting the Labor Code's provisions and its implementing
regulations, the workingman's welfare should be the primordial and paramount consideration.

Facts:

Private respondent Signo was employed in petitioner company as supervisor-leadman

up to the time when his services were terminated.
In 1981, a certain Fernando de Lara filed an application with the petitioner company for
electrical services at his residence. Private respondent Signo facilitated the processing of the
said application as well as the required documentation for said application. In consideration
thereof, private respondent received from Fernando de Lara the amount of P7,000.00. Signo
thereafter filed the application for electric services with the Power Sales Division of the
company. In order to expedite the electrical connections at de Lara's residence, certain
employees of the company, including respondent Signo, made it appear in the application that
the sari-sari store at the corner of Marcos Highway, an entrance to the subdivision, is applicant
de Lara's establishment, which, in reality is not owned by the latter. As a result of this scheme,
the electrical connections to de Lara's residence were installed and made possible. However,
due to the fault of the Power Sales Division of petitioner company, Fernando de Lara was not
billed for more than a year. It was found out later on the Signo was responsible for the
irregularities in the installation, and was later terminated from employment. Signo filed a
complaint for illegal dismissal, unpaid wages, and separation pay and the Labor Arbiter
rendered a decision in his favor, ordering petitioner for his reinstatement without backwages.

Issue: WON respondent Signo should be dismissed from petitioner company on grounds of
serious misconduct and loss of trust and confidence.

Held:

No. The power to dismiss is the normal prerogative of the employer. An employer,
generally, can dismiss or lay-off an employee for just and authorized causes enumerated under
Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge
his employees is subject to regulation by the State, basically in the exercise of its paramount
police power. This is so because the preservation of the lives of the citizens is a basic duty of
the State, more vital than the preservation of corporate profits. There is no question that herein
respondent Signo is guilty of breach of trust and violation of company rules, the penalty for
which ranges from reprimand to dismissal depending on the gravity of the offense. However, as
earlier stated, the respondent Commission and the Labor Arbiter found that dismissal should not
be meted to respondent Signo considering his twenty (20) years of service in the employ of
petitioner, without any previous derogatory record, in addition to the fact that petitioner company
had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered
losses resulting from the unlisted electric consumption of de Lara, this was found to be the fault
of petitioner's Power Sales Division. The Court has held time and again, in a number of
decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of
trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a
penalty if the latter has been employed for a considerable length of time in the service of his
employer.
 Further, in carrying out and interpreting the Labor Code's provisions and its
implementing regulations, the workingman's welfare should be the primordial and paramount
consideration. This kind of interpretation gives meaning and substance to the liberal and
compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states
that "all doubts in the implementation and interpretation of the provisions of the Labor Code
including its implementing rules and regulations shall be resolved in favor of labor"
 MANUEL SOSITO vs. AGUINALDO DEVELOPMENT CORPORATION
G.R. No. L-48926 December 14, 1987

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 labor dispute will be automatically
decided in favor of labor. Management also has its own rights which, as such, are entitled to
respect and enforcement in the interest of simple fair play.

Facts:
Petitioner Manuel Sosito was employed by the private respondent, a logging company,
and was in charge of logging importation, with a monthly salary of P675.00 when he went on
indefinite leave with the consent of the company. The private respondent, through its president,
announced a retrenchment program and offered separation pay to employees in the active
service as of June 30, 1976, who would tender their resignations not later than July 31, 1976.
The petitioner decided to accept this offer and so submitted his resignation on July 29, 1976, "to
avail himself of the gratuity benefits" promised. However, his resignation was not acted upon
and he was never given the separation pay he expected. The petitioner complained to the
Department of Labor, where he was sustained by the labor arbiter. The company was ordered
to pay Sosito the sum of P 4,387.50, representing his salary for six and a half months. On
appeal to the National Labor Relations Commission, this decision was reversed and it was held
that the petitioner was not covered by the retrenchment program.

Issue: WON the petitioner is entitled to separation pay under the retrenchment program of the
private respondent.

Held:
No. It is clear from the memorandum that the offer of separation pay was extended only
to those who were in the active service of the company as of June 30, 1976. It is equally clear
that the petitioner was not eligible for the promised gratuity as he was not actually working with
the company as of the said date. Being on indefinite leave, he was not in the active service of
the private respondent although, if one were to be technical, he was still in its employ. Even so,
during the period of indefinite leave, he was not entitled to receive any salary or to enjoy any
other benefits available to those in the active service. There is no claim that the petitioner was
temporarily laid off or forced to go on leave; on the contrary, the record shows that he voluntarily
sought the indefinite leave which the private respondent granted. It is strange that the company
should agree to such an open-ended arrangement, which is obviously one-sided. The company
would not be free to replace the petitioner but the petitioner would have a right to resume his
work as and when he saw fit.The court note that under the law then in force the private
respondent could have validly reduced its work force because of its financial reverses without
the obligation to grant separation pay. This was permitted under the original Article 272(a), of
the Labor Code, which was in force at the time. To its credit, however, the company voluntarily
offered gratuities to those who would agree to be phased out pursuant to the terms and
conditions of its retrenchment program, in recognition of their loyalty and to tide them over their
own financial difficulties. 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 labor dispute will be
automatically decided in favor of labor. Management also has its own rights which, as such, are
entitled to respect and enforcement in the interest of simple fair play. Out of its concern for
those with less privileges in life, the Court has inclined more often than not toward the worker
and upheld his cause in his conflicts with the employer.
 COLGATE PALMOLIVE PHILIPPINES, Inc. vs. HON. BLAS F. OPLE, COLGATE
PALMOLIVE SALES UNION,
G.R. No. 73681 June 30, 1988

The inherent right and prerogative of management to discipline erring employees; Equal
protection of the Laws with respect to the RIGHTS of Management and the employees.

Facts:

Respondent Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on
ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of union
officers/members; and coercing employees to retract their membership with the union and
restraining non-union members from joining the union. The Office of the MOLE, upon petition of
petitioner, assumed jurisdiction over the dispute pursuant to Article 264 (g) of the Labor Code.
Petitioner pointed out that the allegations regarding dismissal from employment due to union
membership were false. It also averred that the suspension and eventual dismissal of the three
employees were due to infractions committed by them and that the management reserves the
right to discipline erring employees. Petitioner also assailed the legality of the Union, among
others. The minister rendered its decision, ruling that there was no merit in the Union’s
complaint. It also ruled that the three dismissed employees were “not without fault” but
nonetheless ordered the reinstatement of the same. At the same time, respondent Minister
directly certified the respondent Union as the collective bargaining agent for the sales force in
petitioner company and ordered the reinstatement of the three salesmen to the company on the
ground that the employees were first offenders.

Issue: WON the minister erred in directly certifying the Union based on the latter’s self-serving
assertion that it enjoys the support of the majority of the sales force in petitioner’s company and
in ordering the reinstatement of the three dismissed employees.

Held:

Yes. The Court held that the minister failed to determine with legal certainty whether the
Union indeed enjoyed majority representation. The Court held that by relying only on the Notice
of Strike, the minister had encouraged disrespect of the law. He had also erroneously vested
upon himself the right to choose the collective bargaining representative which ought to have
been upon the employees. The Court held that the reinstatement of the three employees
despite a clear finding of guilt on their part is not in conformity with law. Ruling otherwise would
only encourage unequal protection of the laws with respect to the rights of the management and
the employees. The court rendered the decision of the minister reversed and set aside, ordering
petitioners to give the three employees their separation pay.

Union indeed enjoyed majority representation. The Court held that by relying only on the Notice
of Strike, the minister had encouraged disrespect of the law. He had also erroneously vested
upon himself the right to choose the collective bargaining representative which ought to have
been upon the employees. The Court held that the reinstatement of the three employees
despite a clear finding of guilt on their part is not in conformity with law. Ruling otherwise would
only encourage unequal protection of the laws with respect to the rights of the management and
the employees. The court rendered the decision of the minister reversed and set aside, ordering
petitioners to give the three employees their separation pay.
 ELMER M. MENDOZA vs. RURAL BANK OF LUCBAN
G.R. No. 155421 July 7, 2004

Management has the prerogative to transfer or assign employees from one office or area
of operation to another -- provided there is no demotion in rank or diminution of salary, benefits,
and other privileges; and the action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause. This privilege is inherent
in the right of employers to control and manage their enterprise effectively.

Facts:
The Board of Directions of the Rural Bank of Lucban, Inc., issued Board Resolution Nos.
99-52 and 99-53 which ordered the reshuffling of assignments of all of its employees and
officers without changes in their compensation and other benefits. Petitioner expressed his
negative opinion about the reshuffling, that it is deemed to be a demotion without any legal
basis. On June 7, 1999, petitioner submitted to the banks Tayabas branch manager a letter in
which he applied for a leave of absence from work. On June 21, 1999, petitioner again
submitted a letter asking for another leave of absence for twenty days effective on the same
date. On June 24, 1999, while on his second leave of absence, petitioner filed a Complaint
before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The
Complaint -- for illegal dismissal, underpayment, separation pay and damages -- was filed
against the Rural Bank of Lucban and/or its president

Issue: WON the reshuffling of private respondent[s] employees was done in good faith and
cannot be made as the basis of a finding of constructive dismissal, even as the [petitioners]
demotion in rank is admitted by both parties

Held:
Yes. Constructive dismissal is defined as an involuntary resignation resorted to when
continued employment is rendered impossible, unreasonable or unlikely; when there is a
demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain
by an employer becomes unbearable to the employee. Jurisprudence recognizes the exercise
of management prerogatives. For this reason, courts often decline to interfere in legitimate
business decisions of employers. Indeed, labor laws discourage interference in employers
judgments concerning the conduct of their business. The law must protect not only the welfare
of employees, but also the right of employers.
In the pursuit of its legitimate business interest, management has the prerogative to transfer
or assign employees from one office or area of operation to another -- provided there is no
demotion in rank or diminution of salary, benefits, and other privileges; and the action is not
motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion
without sufficient cause. This privilege is inherent in the right of employers to control and
manage their enterprise effectively. The right of employees to security of tenure does not give
them vested rights to their positions to the extent of depriving management of its prerogative to
change their assignments or to transfer them. Managerial prerogatives, however, are subject to
limitations provided by law, collective bargaining agreements, and general principles of fair play
and justice.
Petitioners transfer was made in pursuit of respondents policy to familiarize bank
employees with the various phases of bank operations and further strengthen the existing
internal control system of all officers and employees. There appears no justification for denying
an employer the right to transfer employees to expand their competence and maximize their full
potential for the advancement of the establishment. Petitioner was not singled out; other
employees were also reassigned without their express consent. Neither was there any demotion
in the rank of petitioner; or any diminution of his salary, privileges and other benefits. This fact is
clear in respondents Board Resolutions, the April 30, 1999 letter of Bank President Daya to
Branch Manager Cada, and the May 10, 1999 letter of Daya to petitioner. Petitioner has offered
no sufficient proof to support his allegations. Given no credence by both lower tribunals was his
bare and self-serving statement that he had been positioned near the comfort room, made to
work without a table, and given no work assignment. Purely conjectural is his claim that the
reshuffle of personnel was a harassment in retaliation for an alleged falsification case filed by
his relatives against a public official While the rules of evidence prevailing in courts of law are
not controlling in proceedings before the NLRC, parties must nonetheless submit evidence to
support their contentions.
 GELMART INDUSTRIES PHILS., INC. vs. THE HON. NATIONAL LABOR RELATIONS
COMMISSION AND FELIX FRANCIS,
G.R. No. 85668 August 10, 1989

The management has the right to dismiss private respondent from employment on the
ground of breach of trust or loss of confidence resulting from theft of company property that to
retain the employee would "[i]n the long run, endanger the company's viability.

Facts:

Private respondent Felix Francis started working as an auto-mechanic for petitioner

Gelmart Industries Phils., Inc. As such, his work consisted of the repair of engines and
underchassis, as well as trouble shooting and overhauling of company vehicles. He is likewise
entrusted with some tools and spare parts in furtherance of the work assigned to him. Private
respondent was caught by the security guards taking out of GELMART's premises one (1)
plastic container filled with about 16 ounces of "used' motor oil, without the necessary gate pass
to cover the same as required under GELMART's rules and regulations. By reason thereof, he
was placed under preventive suspension pending investigation for violation of company rules
and regulations. Under the said rules, theft and/or pilferage of company property merits an
outright termination from employment. Private respondent was found guilty of theft of company
property. As a consequence, his services were severed. Thereafter, private respondent filed a
complaint for illegal dismissal before the NLRC.

Issue: WON the termination of employment of private respondent valid

Held:

No. NLRC rightfully tilted the balance in favor of the workingmen — and this was done
without being blind to the concomitant right of the employer to the protection of his property;
without being too harsh to the employer, on the one hand, and naively liberal to labor, on the
other, the NLRC correctly pointed out that private respondent cannot totally escape liability for
what is patently a violation of company rules and regulations. Considering that private
respondent herein has no previous derogatory record in his fifteen (15) years of service with
petitioner GELMART the value of the property pilfered (16 ounces of used motor oil) is very
minimal, plus the fact that petitioner failed to reasonably establish that non-dismissal of private
respondent would work undue prejudice to the viability of their operation or is patently inimical to
the company's interest, it is more in consonance with the policy of the State, as embodied in the
Constitution, to resolve all doubts in favor of labor. The suspension imposed upon private
respondent is a sufficient penalty for the misdemeanor committed.
 ROMEO LAGATIC vs. NATIONAL LABOR RELATIONS COMMISSION, CITYLAND
DEVELOPMENT CORPORATION, STEPHEN ROXAS, JESUS GO, GRACE LIUSON, and
ANDREW LIUSON,
G.R. No. 121004 January 28, 1998

Except as provided for, or limited by, special laws, an employer is free to regulate,
according to his discretion and judgment, all aspects of employment." Employers may, thus,
make reasonable rules and regulations for the government of their employees, and when
employees, with knowledge of an established rule, enter the service, the rule becomes a part of
the contract of employment.

Facts:
Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first as a probationary
sales agent, and later on 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. Cold calls refer to the 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 call reports petitioner was required to
explain his inaction, with a warning that further non-compliance would result in his termination
from the company. Petitioner claimed that the same was an honest omission brought about by
his concentration on other aspects of his job Cityland found his excuse inadequate and suspend
him for three days with a similar warning. Instead of complying with said directive, petitioner, on
February 16, 1993, wrote a note, "TO HELL WITH COLD CALLS! WHO CARES?" and exhibited
the same to his co-employees. To worsen matters, he left the same lying on his desk where
everyone could see it. Petitioner received a memorandum requiring him to explain why Cityland
should not make good its previous warning for his failure to submit cold call reports, as well as
for issuing the written statement aforementioned. he sent a letter-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 upon him

Issue: WON Petitioner’s employment termination valid

Held:

Yes. Petitioner loses sight of the fact that "(e)xcept as provided for, or limited by, special
laws, an employer is free to regulate, according to his discretion and judgment, all aspects of
employment." Employers may, thus, make reasonable rules and regulations for the government
of their employees, and when employees, with knowledge of an established rule, enter the
service, the rule becomes a part of the contract of employment. It is also generally recognized
that company policies and regulations, unless shown to be grossly oppressive or contrary to
law, are generally valid and binding on the parties and must be complied with. "Corollarily, an
employee may be validly dismissed for violation of a reasonable company rule or regulation
adopted for the conduct of the company business. An employer cannot rationally be expected to
retain the employment of a person whose . . . lack of regard for his employer's rules . . . has so
plainly and completely been bared." Petitioner's continued infraction of company policy
requiring cold call reports, as evidenced by the 28 instances of non-submission of aforesaid
reports, justifies his dismissal. He cannot be allowed to arrogate unto himself the privilege of
setting company policy on the effectivity of solicitation methods. To do so would be to sanction
oppression and the self-destruction of the employer.

Petitioner made it worse for himself when he wrote the statement, "TO HELL WITH COLD
CALLS! WHO CARES?" When required to explain, he merely denied ally knowledge of the
same. 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. The rule, however, is that denial, if
unsubstantiated by clear and convincing evidence, is negative and self-serving evidence which
has no weight in law. More telling, petitioner, while making much capital out of his lack of
opportunity to confront the affiants, never, in all of his pleadings, categorically denied writing the
same. He only denied knowledge of the allegation that he issued such a statement.

Based on the foregoing, we find petitioner guilty of willful disobedience. Willful disobedience
requires the concurrence of at least two requisites: the employee's assailed conduct must have
been willful or intentional, the willfulness being characterized by a wrongful and perverse
attitude; and the order violated must have been reasonable, lawful, made known to the
employee and must pertain to the duties which he had been engaged to discharge.
 CHINA BANKING CORPORATION vs. MARIANO M. BORROMEO
October 19, 2004 G.R. No. 156515

It is well recognized that company policies and regulations are, unless shown to be
grossly oppressive or contrary to law, generally binding and valid on the parties and must be
complied with until finally revised or amended unilaterally or preferably through negotiation or by
competent authority.

Facts:
Respondent Mariano M. Borromeo joined the petitioner Bank as Manager assigned at
the latter’s Regional Office in Cebu City. He then had the rank of Manager Level
I. Subsequently, the respondent was laterally transferred to Cagayan de Oro City as Branch
Manager of the petitioner Banks branch thereat. For the years 1989 and 1990, the respondent
received a highly satisfactory performance rating and was given the corresponding profit
sharing/performance bonus. From 1991 up to 1995, he consistently received a very good
performance rating for each of the said years and again received the corresponding profit
sharing/performance bonus; he was promoted from Manager Level I to Manager Level II. With a
highly satisfactory performance rating, the respondent was promoted again the position of
Assistant Vice-President, Branch Banking Group for the Mindanao area. Each promotion had
the corresponding increase in the respondents salary as well as in the benefits he received from
the petitioner Bank. However, prior to his last promotion and then unknown to the petitioner
Bank, the respondent, without authority from the Executive Committee or Board of Directors,
approved several DAUD/BP accommodations amounting to P2,441,375 in favor of Joel
Maniwan, with Edmundo Ramos as surety. DAUD/BP is the acronym for checks Drawn Against
Uncollected Deposits/Bills Purchased. Such checks, which are not sufficiently funded by cash,
are generally not honored by banks. Further, a DAUD/BP accommodation is a credit
accommodation granted to a few and select bank clients through the withdrawal of uncollected
or uncleared check deposits from their current account. Under the petitioner Banks standard
operating procedures, DAUD/BP accommodations may be granted only by a bank officer upon
express authority from its Executive Committee or Board of Directors.
As a result of the DAUD/BP accommodations in favor of Maniwan, a total of ten out-of-
town checks (7 PCIB checks and 3 UCPB checks) of various dates amounting toP2,441,375
were returned unpaid from September 20, 1996 to October 17, 1996. Each of the returned
checks was stamped with the notation Payment Stopped/Account Closed.
On October 8, 1996, the respondent wrote a Memorandum to the petitioner Banks senior
management requesting for the grant of a P2.4 million loan to Maniwan. The memorandum
stated that the loan was to regularize/liquidate subjects (referring to Maniwan) DAUD
availments. It was only then that the petitioner Bank came to know of the DAUD/BP
accommodations in favor of Maniwan. The petitioner Bank further learned that these DAUD/BP
accommodations exceeded the limit granted to clients, were granted without proper prior
approval and already past due. Acting on this information, Samuel L. Chiong, the petitioner
Banks First Vice- President and Head-Visayas Mindanao Division, in his Memorandum for the
respondent ask to clarify some things
Later, respondent filed his resignation and denied that he benefited from the Maniwan
case. In a memorandum addressed to the respondent, informed him that his approval of the
DAUD/BP accommodations in favor of Maniwan without authority and/or approval of higher
management violated the petitioner’s Banks Code of Ethics. As such, he was directed to
restitute the amount of P1,507,736.79 representing 90% of the total loss of P1,675,263.10
incurred by the petitioner Bank. However, in view of his resignation and considering the years of
service in the petitioner Bank, the management earmarked only P836,637.08 from the
respondents total separation benefits or pay. In another letter addressed to the respondent, it
stated that sum of his separation pay will not be released until recovery of the sum demanded
from the Maniwan case.

Issue: WON the bank has the prerogative/right to impose the withholding of respondent’s
benefitsas what it considered the appropriate penalty under the circumstances pursuant to its
companyrules and regulations.

Held:
Yes. It is well recognized that company policies and regulations are, unless shown to be
grossly oppressive or contrary to law, generally binding and valid on the parties and must be
complied with until finally revised or amended unilaterally or preferably through negotiation or by
competent authority. Moreover, management has the prerogative to discipline its employees
and to impose appropriate penalties on erring workers pursuant to company rules and
regulations. With more reason should these truisms apply to the respondent, who, by reason of
his position, was required to act judiciously and to exercise his authority in harmony with
company policies. The petitioner Bank was left with no other recourse but to impose the
ancillary penalty of restitution. It was certainly within the petitioner Banks prerogative to impose
on the respondent what it considered the appropriate penalty under the circumstances pursuant
to its company rules and regulations.
ASSOCIATED WATCHMEN AND SECURITY UNION (PTWO), vs. THE HON. JUDGES JUAN
LANTING, ARSENIO MARTINEZ, EMILIANO TABIGNE, of the Court of Industrial Relations
and MACONDRAY AND COMPANY, INC.
G.R. No. L-14120 February 29, 1960

The refusal of the respondent to employ guards affiliated with a security or watchmen
agency that does not furnish bond can not constitute an unfair labor practice. Such refusal is
merely the exercise of respondent's legitimate right to protect its own interests.

Facts:

Three agencies (K. Tagle Ship Watchmen Agency, City Watchmen and Security Agency
and Republic Ships Security Agency) were employed by certain shipping agencies in the City
of Manila and private respondent Macondray and Company Inc., in guarding ships or vessels
arriving at the port of Manila. and in discharging cargo on its piers. Thirty-eight affiliates of the
Republic Ships Security Agency belong to the petitioner labor union. On or about February 18,
1956, petitioner union and its members declared a strike against 19 shipping firms in the City of
Manila. Attempts were made by the Court of Industrial Relations to settle the strike. A petition
was filed before the Court of Industrial Relations asking for reinstatement of 47 strikers who
belong to the petitioner Associated Watchmen and Security Union (PTWO) The manager of
respondent Macondray and Company, Inc. expressed willingness to employ the strikers
belonging to the petitioner union under the condition that the agency to which they belong file a
bond in the sum of P5,000 in favor of Macondray and Company, Inc. to respond for any
negligence, misfeasance or malfeasance of any of the watchmen of petitioner (Exhibit "I",
respondent). This requirement of filing a bond was also demanded of the other two security
agencies, the K. Tagle Ship Watchmen Agency and the City Watchmen and Security Agency.
However, the Republic Ships Security Agency, to which most of the members of the petitioner
union belonged, failed to comply with the demands of Macondray and Company, Inc. that they
furnish such a bond. The manager of the agency was one by the name of Fernando Derupe.
Because of the failure of the Republic Ships Security Agency to furnish a bond, Macondray and
Company, Inc. refused to employ watchmen from the said agency. Some of the members of the
agency transferred to the other two agencies that had furnished a bond and after having joined
the said agencies they were employed as watchmen by the respondent Macondray and
Company, Inc.

Issue: WON Macondray and Co. Committed unfair labor practice for having dismissed
andrefused to employ 38 members of the petitioner in relation to the failure of the Republic
ShipsSecurity Agency to furnish a bond required by herein respondent

Held:

No. The demand of the respondent that the watchmen agencies furnish a bond had
become necessary in view of the fact that on or about March 18, 1956, three guards from the
Republic Ships Security Agency left the "M/V Talleyrand," a ship of which respondent was an
agent, without notice, abandoning their work, and then went on strike without giving advance
notice of their intention or desire to do so. The requirement of a bond was, therefore, fully
justified by the acts of the members of the petitioner union who were affiliated with the Republic
Ships Security Agency and who struck without previous notice. The refusal of the respondent to
employ guards affiliated with a security or watchmen agency that does not furnish bond can not
constitute an unfair labor practice. Such refusal is merely the exercise of respondent's legitimate
right to protect its own interests, especially as the members of the petitioner had abandoned a
ship they were guarding without previous notice and exposed the ship losses due to theft and
pilferage. It is to be noted that the requirement of filing of a bond was not demanded from any of
the labor unions, or from the petitioner union herein. The court cannot conclude that because
the respondent company refused to employ the guards affiliated with the Republic Ships
Security Agency, which affiliates are members of the petitioner union, respondent committed an
unfair labor practice or a discrimination against petitioner union.
 PAMPANGA BUS COMPANY, INC. vs. PAMBUSCO EMPLOYEES' UNION, INC
G.R. No. 46739 September 23, 1939

The general right to make a contract in relation to one's business is an essential part of
the liberty of the citizens protected by the due-process clause of the Constitution.

Facts:

Court of Industrial Relations issued an order, directing the petitioner herein, Pampanga
Bus Company, Inc., to recruit from the respondent, Pambusco Employees' Union, Inc., new
employees or laborers it may need to replace members of the union who may be dismissed
from the service of the company, with the proviso that, if the union fails to provide employees
possessing the necessary qualifications, the company may employ any other persons it may
desire. This order, in substance and in effect, compels the company, against its will, to employ
preferentially, in its service, the members of the union.

Issue: WON the said order issued by the CIR valid and not violative of the right of the employer
to select employees.

Held:

No. The general right to make a contract in relation to one's business is an essential part
of the liberty of the citizens protected by the due-process clause of the Constitution. The right of
the laborer to sell his labor to such person as he may choose is, in its essence, the same as the
right of an employer to purchase labor from any person whom it chooses. The employer and the
employee have thus an equality of right guaranteed by the Constitution. "If the employer can
compel the employee to work against the latter's will, this is servitude. If the employee can
compel the employer to give him work against the employer's will, this is oppression."
 GREGORIO ARANETA EMPLOYEES UNION, ETC., ET AL. vs. ARSENIO C. ROLDAN, ET
AL.

G.R. No. L-6846 July 20, 1955

The Lay-off of employees is valid for it is due to the retrenchment policy which the
Company had to adopt in order to reduce the overcapitalization and minimize expenses.

Facts:

The Agricultural Division of the Gregorio Araneta, Inc., was established in 1947 with a
capital of P200,000. The total investment in that Division in 1953 was about P3,000,000. To
reduce this overcapitalization, the Board of Directors felt that it was necessary either to invite
fresh capital from outside or to adopt a retrenchment policy. When Heacock and Company
refused the invitation to invest in the enterprise, the Board took the alternative of retrenchment.
The Board decided not to import as much merchandise as usual. It also reduced credits. All
these plans required a reduction in the volume of business necessitating likewise a reduction of
personnel and caused the laying off of 17 employees. These employees were given one month
separation pay, except Nicolas Gonzalez who refused to receive it.

Issue: WON the laying off of 17 employees valid

Held:

Yes. The laying off of the 17 employees was due to the retrenchment policy which the
Company had to adopt in order to reduce the overcapitalization and minimize expenses. The
volume of business was considerably reduced.

It should be noted that the retrenchment policy was adopted before even the organization of the
petitioning union. It was not, therefore, aimed at the Union or any of its members for union or
labor activities. It was not an unfair labor practice.
 RIZAL EMPIRE INSURANCE GROUP AND/OR SERGIO CORPUS VS. NATIONAL LABOR
RELATIONS COMMISSION
G.R. No. 73140 May 29, 1987

It is an elementary rule in administrative law that administrative regulations and policies

enacted by administrative bodies to interpret the law which they are entrusted to enforce, have
the force of law, and are entitled to great respect

Facts:
In August, 1977, herein private respondent Rogelio R. Coria was hired by herein
petitioner Rizal Empire Insurance Group as a casual employee with a salary of P10.00 a day.
On January 1, 1978, he was made a regular employee, having been appointed as clerk-typist,
with a monthly salary of P300.00. Being a permanent employee, he was furnished a copy of
petitioner company's "General Information, Office Behavior and Other Rules and Regulations."
In the same year, without change in his position-designation, he was transferred to the Claims
Department and his salary was increased to P450.00 a month. In 1980, he was transferred to
the Underwriting Department and his salary was increased to P580.00 a month plus cost of
living allowance, until he was transferred to the Fire Department as filing clerk. In July, 1983, he
was made an inspector of the Fire Division with a monthly salary of P685.00 plus allowances
and other benefits. On October 15, 1983, private respondent Rogelio R. Coria was dismissed
from work, allegedly, on the grounds of tardiness and unexcused absences. Accordingly, he
filed a complaint with the Ministry of Labor and Employment (MOLE), and in a Decision dated
March 14, 1985, Labor Arbiter Teodorico L. Ruiz reinstated him to his position with back wages.
Petitioner filed an appeal with the National labor Relations Commission (NLRC) but, in a
Resolution dated November 15, 1985, the appeal was dismissed on the ground that the same
had been filed out of time. Hence, the instant petition.

Issue: WON NLRC committed a grave abuse of discretion amounting to lack of jurisdiction in
dismissing petitioner’s appeal on a technicality.

Held:

Rule VIII of the Revised Rules of the National Labor Relations Commission on appeal,
provides:

SECTION 1. (a) Appeal. — Decision or orders of a labor Arbiter shall be final and executory
unless appealed to the Commission by any or both of the parties within ten (10) calendar days
from receipt of notice thereof.

SECTION 6. No extension of period. — No motion or request for extension of the period within
which to perfect an appeal shall be entertained.

The record shows that the employer (petitioner herein) received a copy of the decision of the
Labor Arbiter on April 1, 1985. It filed a Motion for Extension of Time to File Memorandum of
Appeal on April 11, 1985 and filed the Memorandum of Appeal on April 22, 1985. Pursuant to
the "no extension policy" of the National Labor Relations Commission, aforesaid motion for
extension of time was denied in its resolution dated November 15, 1985 and the appeal was
dismissed for having been filed out of time.

The Revised Rules of the National Labor Relations Commission are clear and explicit and leave
no room for interpretation. Moreover, it is an elementary rule in administrative law that
administrative regulations and policies enacted by administrative bodies to interpret the law
which they are entrusted to enforce, have the force of law, and are entitled to great respect
(Espanol v. Philippine Veterans Administration, 137 SCRA 314 [1985]).

Under the above-quoted provisions of the Revised NLRC Rules, the decision appealed from in
this case has become final and executory and can no longer be subject to appeal.

Even on the merits, the ruling of the Labor Arbiter appears to be correct; the consistent
promotions in rank and salary of the private respondent indicate he must have been a highly
efficient worker, who should be retained despite occasional lapses in punctuality and
attendance. Perfection cannot after all be demanded.
 PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS VS. HON. FRANKLIN M. DRILON
GR. No. 81958 June 30, 1988

D.O. No. 1 does not constitute an invalid exercise of legislative power. It is true that
police power is the domain of legislature, but it does not mean that such an authority may not be
lawfully delegated. The Labor Code itself in Article 5 vests the DOLE with the rule making
powers in the enforcement thereof.
Facts:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI), a firm
"engaged principally in the recruitment of Filipino workers, male and female, for overseas
placement," challenges the Constitutional validity of Department Order No. 1, Series of 1988, of
the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. The measure is
assailed for "discrimination against males or females," that it 'does not apply to all Filipino
workers but only to domestic helpers and females with similar skills," and that it is violative of
the right to travel. It was likewise held to be an invalid exercise of the lawmaking power, police
power being legislative, and not executive, in character.

In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation "in policy and decision-making processes
affecting their rights and benefits as may be provided by law." In addition, it was contended that
Department Order No. 1 was passed in the absence of prior consultations. It was claimed to be
in violation of the Charter's non-impairment clause, in addition to the "great and irreparable
injury" that PASEI members face should the Order be further enforced. The Solicitor General,
on behalf of the respondent Secretary of Labor and Administrator of the Philippine Overseas
Employment Administration, invokes the police power of the Philippine State.

Issue: WON deployment ban for female domestic helpers is valid under our Constitution.

Held:
Yes. It is a valid exercise of police power. The concept of police power is well-
established in this jurisdiction. It has been defined as the "state authority to enact legislation that
may interfere with personal liberty or property in order to promote the general welfare." As
defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in order to foster
the common good. It is not capable of an exact definition but has been, purposely, veiled in
general terms to underscore its all-comprehensive embrace. Its scope, ever-expanding to meet
the exigencies of the times, even to anticipate the future where it could be done, provides
enough room for an efficient and flexible response to conditions and circumstances thus
assuring the greatest benefits. It finds no specific Constitutional grant for the plain reason that it
does not owe its origin to the Charter. Along with the taxing power and eminent domain, it is
inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. The police power of
the State ... is a power coextensive with self- protection. It may be said to be that inherent and
plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety,
and welfare of society. As a general rule, official acts enjoy a presumed validity.

In the absence of clear and convincing evidence to the contrary, the presumption logically
stands.
The petitioner has shown no satisfactory reason why the contested measure should
be nullified. There is no question that Department Order No. 1 applies only to "female contract
workers," but it does not thereby make an undue discrimination between the sexes. It is well-
settled that "equality before the law" under the Constitution does not import a perfect Identity of
rights among all men and women. "Protection to labor" does not signify the promotion of
employment alone. What concerns the Constitution more paramountly is that such
an employment be above all, decent, just, and humane. Under these circumstances, the
Government is duty-bound to insure that our toiling expatriates have adequate protection,
personally and economically, while away from home. In this case, the Government has
evidence, evidence the petitioner cannot seriously dispute, of the lack or inadequacy of such
protection, and as part of its duty, it has precisely ordered an indefinite ban on deployment. This
Court understands the grave implications the questioned Order has on the business
of recruitment. The concern of the Government, however, is not necessarily to maintain profits
of business firms. In the ordinary sequence of events, it is profits that suffer as a result
of Government regulation. The interest of the State is to provide a decent living to its citizens.
 CBTC EMPLOYEES UNION VS. HON. JACOBO C. CLAVE
G.R. No. 49582 January 7, 1986

An administrative interpretation which diminishes the benefits of labor more than what
the statute delimits or withholds is obviously ultra vires.

Facts:
Petitioner Commercial Bank and Trust Company Employees' Union (CBTC) lodged a
complaint with the Department of Labor, against private respondent bank (Comtrust) for non-
payment of the holiday pay benefits provided for under Article 95 (now Article 94) of the Labor
Code. Failing to arrive at an amicable settlement at conciliation level, the parties opted to submit
their dispute for voluntary arbitration. On 22 April 1976, the Arbitrator handed down an award on
the dispute in favor of petitioner union. The next day, 23 April 1976, the Department of Labor
released Policy Instructions No. 9, a policy regarding the implementation of the ten (10) paid
legal holidays. Said bank interposed an appeal to the National Labor Relations Commission
(NLRC), contending that the Arbitrator demonstrated gross incompetence and/or grave abuse of
discretion when he failed to apply Policy Instructions No. 9. This appeal was dismissed on 16
August 1976. Private respondent then appealed to the Secretary of Labor. On 30 June 1977,
the Acting Secretary of Labor reversed the NLRC decision. On the principal issue of holiday
pay, the Acting Secretary, guided by Policy Instructions No. 9, applied the same retrospectively,
among other things.

Issue: WON the monthly pay of the covered employees already includes what Article 94 of the
Labor Code requires as regular holiday pay benefit in the amount of his regular daily wage.

Ruling:
In excluding the union members the benefits of the holiday pay law, public respondent
predicated his ruling on Section 2, Rule IV, Book III of the Rules to implement Article 94 of the
Labor Code promulgated by the then Secretary of Labor and Policy Instructions No. 9. In Insular
Bank of Asia and America Employees' Union (IBAAEU) vs. Inciong, this Court's Second
Division, speaking through former Justice Makasiar, expressed the view and declared that the
section and interpretative bulletin are null and void, having been promulgated by the then
Secretary of Labor in excess of his rule-making authority. The questioned Section 2, Rule IV,
Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another
excluded group, namely, 'employees who are uniformly paid by the month'. While the additional
exclusion is only in the form of a presumption that all monthly paid employees have already
been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it
is to be valid. An administrative interpretation which diminishes the benefits of labor more than
what the statute delimits or withholds is obviously ultra vires.
Ruled in favor of the petitioners. Presidential Executive Assistant and the Acting
Secretary of labor are set aside, and the award of the Arbitrator reinstated.
 NATIONAL HOUSING CORPORATION, petitioner, vs. BENJAMIN JUCO AND THE
NATIONAL LABOR RELATIONS COMMISSION, respondents.
G.R. No. L-64313 January 17, 1985

Employees of government-owned or controlled corporations are governed by the civil

service law and civil service rules and regulations.

Facts:

Private respondent (Benjamin C. Juco) was a project engineer of the National Housing
Corporation (NHC) from November 16, 1970 to May 14, 1975. For having been implicated in a
crime of theft and/or malversation of public funds involving 214 pieces of scrap G.I. pipes owned
by the corporation which was allegedly committed on March 5, 1975. Juco's services were
terminated by (NHC) effective as of the close of working hours on May 14, 1975. On March 25,
1977 he filed a complaint for illegal dismissal against petitioner (NHC) with Regional Office No.
4, Department of Labor (now Ministry of Labor and Employment) docketed as R04-3-3309-77
(Annex A, Petition). He professed innocence of the criminal acts imputed against him
contending "that he was dismissed based on purely fabricated charges purposely to harass him
because he stood as a witness in the theft case filed against certain high officials of NHC. NHC
also filed its position paper alleging that the Regional Office Branch IV, Manila, NLRC, "is
without authority to entertain the case for lack of jurisdiction, considering that the NHC is a
government owned and controlled corporation.

Issue: WON the employees of the National Housing Corporation (NHC) covered by the Labor
Code

Held:

No. The NHC is a one hundred percent (100%) government-owned corporation

organized in accordance with Executive Order No. 399, the Uniform Charter of Government
Corporations, dated January 5, 1951. Its shares of stock are owned by the Government Service
Insurance System the Social Security System, the Development Bank of the Philippines, the
National Investment and Development Corporation, and the People's Homesite and Housing
Corporation. Applying the pertinent provisions of the Constitution, the Labor Code as amended,
and the Civil Service Decree as amended and the precedent in the Alliance of Government
Workers decision, it is clear that the petitioner National Housing Corporation comes under the
jurisdiction of the Civil Service Commission, not the Ministry of Labor and Employment.
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the respondent
National Labor Relations Commission is SET ASIDE. The decision of the Labor Arbiter
dismissing the case before it for lack of jurisdiction is REINSTATED.
 NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ vs. THE
HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION, MINISTRY
OF LABOR AND EMPLOYMENT, MANILA AND EUGENIA C. CREDO

G.R. No. L-69870 November 29, 1988

Employers in the exercise of their power to dismiss employees for just causes, the law
provides that; the worker may answer the allegations stated against him in the notice of
dismissal within a reasonable period from receipt of such notice. The employer shall afford the
worker ample opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.

Facts:

Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a

domestic corporation which provides security guards as well as messengerial, janitorial and
other similar manpower services to the Philippine National Bank (PNB) and its agencies. She
was first employed with NASECO as a lady guard on 18 July 1975. Through the years, she was
promoted to Clerk Typist, then Personnel Clerk until she became Chief of Property and
Records, on 10 March 1980. Sometime before 7 November 1983, Credo was administratively
charged by Sisinio S. Lloren, Manager of Finance and Special Project and Evaluation
Department of NASECO, stemming from her non-compliance with Lloren's memorandum, dated
11 October 1983, regarding certain entry procedures in the company's Statement of Billings
Adjustment. The two had unpleasant exchanges and Credo was placed in forced leave for 15
days by NASECO general manager Perez and NASECO Committee and Personal Affairs.
While on forced leave the committee reviewed Credo’s previous misconduct and infractions and
recommended Credo's termination, with forfeiture of benefits.

Issue: WON Credo was illegally dismissed by her employer.

Held:

Yes, As guidelines for employers in the exercise of their power to dismiss employees for just
causes, the law provides that:

Section 2. Notice of dismissal. — Any employer who seeks to dismiss a worker

shall furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal.

xxx xxx xxx

Section 5. Answer and Hearing. — The worker may answer the allegations
stated against him in the notice of dismissal within a reasonable period from
receipt of such notice. The employer shall afford the worker ample opportunity to
be heard and to defend himself with the assistance of his representative, if he so
desires.

Section 6. Decision to dismiss. — The employer shall immediately notify a worker

in writing of a decision to dismiss him stating clearly the reasons therefor. 17
These guidelines mandate that the employer furnish an employee sought to be dismissed two
(2) written notices of dismissal before a termination of employment can be legally effected.
These are the notice which apprises the employee of the particular acts or omissions for which
his dismissal is sought and the subsequent notice which informs the employee of the employer's
decision to dismiss him.

Likewise, a reading of the guidelines in consonance with the express provisions of law on
protection to labor 18(which encompasses the right to security of tenure) and the broader
dictates of procedural due process necessarily mandate that notice of the employer's decision
to dismiss an employee, with reasons therefor, can only be issued after the employer has
afforded the employee concerned ample opportunity to be heard and to defend himself.

In the case at bar, NASECO did not comply with these guidelines in effecting Credo's dismissal.
Although she was apprised and "given the chance to explain her side" of the charges filed
against her, this chance was given so perfunctorily, thus rendering illusory Credo's right to
security of tenure. That Credo was not given ample opportunity to be heard and to defend
herself is evident from the fact that the compliance with the injunction to apprise her of the
charges filed against her and to afford her a chance to prepare for her defense was dispensed
in only a day. This is not effective compliance with the legal requirements aforementioned.
REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL PARKS DEVELOPMENT
COMMITTEE vs. THE HON. COURT OF APPEALS and THE NATIONAL PARKS
DEVELOPMENT SUPERVISORY ASSOCIATION & THEIR MEMBERS
G.R. No. 87676 December 20, 1989

Applicability of Labor Code; In case of a labor dispute between the employees and the
government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that the Public
Sector Labor- Management Council, not the Department of Labor and Employment, shall hear
the dispute.

Facts:

National Parks Development Committee (NPDC) was originally created in 1963 under
Executive Order No. 30, as the Executive Committee for the development of the Quezon
Memorial, Luneta and other national parks, and later renamed as the National Parks
Development Committee under Executive Order No. 68, on September 21, 1967, it was
registered in the Securities and Exchange Commission (SEC) as a non-stock and non-profit
corporation, known as "The National Parks Development Committee, Inc." However, in August,
1987, the NPDC was ordered by the SEC to show cause why its Certificate of Registration
should not be suspended for: (a) failure to submit the General Information Sheet from 1981 to
1987; (b) failure to submit its Financial Statements from 1981 to 1986; (c) failure to register its
Corporate Books; and (d) failure to operate for a continuous period of at least five (5) years
since September 27, 1967. By virtue of Executive Order NPDC provided with a separate budget
subject to audit by the Commission on Audit and all appointments and other personnel actions
shall be submitted through the Civil Service Commission. Meanwhile, the Rizal Park
Supervisory Employees Association, consisting of employees holding supervisory positions in
the different areas of the parks, was organized and it affiliated with the Trade Union of the
Philippines and Allied Services (TUPAS) under Certificate No. 1206 with two collective
bargaining agreements entered between TUPAS and NPDC. On March 20, 1988, these unions
staged a stake at the Rizal Park, Fort Santiago, Paco Park, and Pook ni Mariang Makiling at Los
Banos, Laguna, alleging unfair labor practices by NPDC. NPDC filed in the Regional Trial Court
in Manila, Branch III, a complaint against the union to declare the strike illegal and to restrain it
on the ground that the strikers, being government employees, have no right to strike although
they may form a union.

Issue: WON petitioner's labor dispute with its employees is cognizable by the Department of
Labor.

Held:
No. NPDC is a government agency, its employees are covered by civil service rules and
regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees
(Sec. 14, Executive Order No. 180).

While NPDC employees are allowed under the 1987 Constitution to organize and join unions of
their choice, there is as yet no law permitting them to strike. In case of a labor dispute between
the employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987
provides that the Public Sector Labor- Management Council, not the Department of Labor and
Employment, shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in
holding that the labor dispute between the NPDC and the members of the NPDSA is cognizable
by the Department of Labor and Employment.
 LUZON DEVELOPMENT BANK vs. ASSOCIATION OF LUZON DEVELOPMENT BANK
EMPLOYEES and ATTY. ESTER S. GARCIA in her capacity as VOLUNTARY
ARBITRATOR
G.R. No. 120319 October 6, 1995

The terms governmental "agency" or "instrumentality" are synonymous in the sense that
either of them is a means by which a government acts, or by which a certain government act or
function is performed. The word "instrumentality," with respect to a state, contemplates an
authority to which the state delegates governmental power for the performance of a state
function.

Facts:

At a conference, the parties agreed on the submission of their respective Position

Papers on December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator,
received ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit
its Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of
May 23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision
disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the
Collective Bargaining Agreement provision nor the Memorandum of Agreement
on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.

Issue: WON the Decision of the Voluntary Arbitrator valid.

Held:
Refer the case to the Court of Appeals. Under voluntary arbitration, referral of a dispute
by the parties is made, pursuant to a voluntary arbitration clause in their collective agreement, to
an impartial third person for a final and binding resolution. 2Ideally, arbitration awards are
supposed to be complied with by both parties without delay, such that once an award has been
rendered by an arbitrator, nothing is left to be done by both parties but to comply with the same.
After all, they are presumed to have freely chosen arbitration as the mode of settlement for that
particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who
shall hear and decide their case. Above all, they have mutually agreed to de bound by said
arbitrator's decision. The jurisdiction conferred by law on a voluntary arbitrator or a panel of
such arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the
appellate jurisdiction of the National Labor Relations Commission (NLRC)
Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may
not strictly be considered as a quasi-judicial agency, board or commission, still both he and the
panel are comprehended within the concept of a "quasi-judicial instrumentality." It may even be
stated that it was to meet the very situation presented by the quasi-judicial functions of the
voluntary arbitrators here, as well as the subsequent arbitrator/arbitral tribunal operating under
the Construction Industry Arbitration Commission, 11 that the broader term "instrumentalities"
was purposely included in the above-quoted provision.An "instrumentality" is anything used as a
means or agency. 12 Thus, the terms governmental "agency" or "instrumentality" are
synonymous in the sense that either of them is a means by which a government acts, or by
which a certain government act or function is performed. 13 The word "instrumentality," with
respect to a state, contemplates an authority to which the state delegates governmental power
for the performance of a state function. An individual person, like an administrator or executor,
is a judicial instrumentality in the settling of an estate, in the same manner that a sub-agent
appointed by a bankruptcy court is an instrumentality of the court, and a trustee in bankruptcy of
a defunct corporation is an instrumentality of the state. The voluntary arbitrator no less performs
a state function pursuant to a governmental power delegated to him under the provisions
therefor in the Labor Code and he falls, therefore, within the contemplation of the term
"instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers
are provided for in the Labor Code does not place him within the exceptions to said Sec. 9 since
he is a quasi-judicial instrumentality as contemplated therein. It will be noted that, although the
Employees Compensation Commission is also provided for in the Labor Code, Circular No. 1-
91, which is the forerunner of the present Revised Administrative Circular No. 1-95, laid down
the procedure for the appealability of its decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P.
129.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise
be appealable to the Court of Appeals
 SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T.
BAYLON, RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE
ALDAY, SERGIO ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO vs. THE COURT
OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC,
BRANCH 98, QUEZON CITY

G.R. No. 85279 July 28, 1989

The Labor Code itself provides that terms and conditions of employment of government
employees shall be governed by the Civil Service Law, rules and regulations [Art. 276]

Facts:

SSS filed a complaint against the officers and members of SSSEA as a result of their
strike. The complaint prayed that a writ of preliminary injunction be issued to enjoin the strike
and that the strikers be ordered to return to work; that the defendants (petitioners herein) be
ordered to pay damages; and that the strike be declared illegal. It appears that the SSSEA went
on strike after the SSS failed to act on the union's demands, which included: implementation of
the provisions of the old SSS-SSSEA collective bargaining agreement (CBA) on check-off of
union dues; payment of accrued overtime pay, night differential pay and holiday pay; conversion
of temporary or contractual employees with six (6) months or more of service into regular and
permanent employees and their entitlement to the same salaries, allowances and benefits given
to other regular employees of the SSS; and payment of the children's allowance of P30.00, and
after the SSS deducted certain amounts from the salaries of the employees and allegedly
committed acts of discrimination and unfair labor practices

Issue: WON the dispute fall within the jurisdiction of the NLRC

Held:

No. The Labor Code itself provides that terms and conditions of employment of
government employees shall be governed by the Civil Service Law, rules and regulations [Art.
276]. E.O. No. 180 vests the Public Sector Labor - Management Council with jurisdiction over
unresolved labor disputes involving government employees [Sec. 16]. Clearly, the NLRC has no
jurisdiction over the dispute. Regional Trial Court was not precluded, in the exercise of its
general jurisdiction under B.P. Blg. 129, as amended, from assuming jurisdiction over the SSS's
complaint for damages and issuing the injunctive writ prayed for therein.
 PHILIPPINE INTERNATIONAL SHIPPING CORPORATION vs. HONORABLE NATIONAL
LABOR RELATIONS COMMISSION AND BRIGIDO SAMSON
G.R. No. L-63535 May 27, 1985

The fact that the employee "has signed a satisfaction receipt does not result in waiver;
the law does not consider as valid any agreement to receive less compensation than that the
worker is entitled to recover."

Facts:
A decision was rendered on by the Executive Director of the NSB, ordering petitioner
herein to:
1. Pay complainant the sum of US $3,800.00 or its equivalent in Philippine Currency as
disability compensation benefits; and
2. Pay complainant's counsel Atty. Doroteo A. Dudal, the sum of US $380.00 or its equivalent in
Philippine Currency as attorney's fees.
Payment of these amounts should be coursed thru the National Seamen Board.
Not satisfied with the foregoing judgment, petitioner appealed to the NLRC. During the
pendency of said appeal, petitioner offered P18,000.00 to private respondent. On May 7, 1981,
private respondent received said amount and executed a "Release" document. On December
17, 1981, the appealed decision was affirmed by the NLRC. After the said decision reached
finality, the corresponding writ of execution was issued and served on petitioner. On April 28,
1982, the Sheriff who served the writ submitted a report to the Board, stating that petitioner had
paid P18,000.00 to private respondent herein which the latter accepted and evidenced by a
voucher and a "Release" document dated May 7, 1981; and that because of said payment, the
Sheriff had in the meantime refrained from collecting the balance of the award until the Board
shall have passed upon this matter. Private respondent maintained that the P18,000.00 was
accepted by him only as partial payment of the award since he badly needed the money for his
on-going medical treatment. Petitioner herein, however, insisted that said amount constituted
full payment of the award. The Board issued an order declaring that the said amount was only a
partial payment

Issue: WON NLRC erred in recognizing a clearly illegal decision, because said decision orders
payment in the dollar standard in violation of law.

Held:
No. Republic Act No. 529 makes it unlawful to require payment of domestic obligations
in foreign currency, this particular statute is not applicable to the case at bar. A careful reading
of the decision rendered by the Executive Director of the NSB dated April 2, 1981 and which led
to the Writ of Execution protested to by petitioner, will readily disclose that the award to the
private respondent does not compel payment in dollar currency but in fact expressly allows
payment of "its equivalent in Philippine currency." As to petitioner's principal contention that its
payment of P18,000.00 under the document of release executed by private respondent
constitutes full satisfaction of the award, The court uphold the ruling of the public respondent
NLRC on this matter and find no error, much less grave abuse of discretion on the part of
respondent NLRC in rejecting such assertion.

In the case of MRR Yard Crew Union versus Philippine National Railways, 72 SCRA 88 (1976),
the Court held that the fact that the employee "has signed a satisfaction receipt does not result
in waiver; the law does not consider as valid any agreement to receive less compensation than
that the worker is entitled to recover.
 INTERPHIL LABORATORIES EMPLOYEES UNION-FFW, ENRICO GONZALES and MA.
THERESA MONTEJO vs. INTERPHIL LABORATORIES, INC., AND HONORABLE
LEONARDO A. QUISUMBING, SECRETARY OF LABOR AND EMPLOYMENT
G.R. No. 142824 December 19, 2001

Through a contract freely entered into, the workshift may exceed 8 hours, with
corresponding overtime pay

Facts:

Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent
of the rank-and-file employees of Interphil Laboratories, Inc., a company engaged in the
business of manufacturing and packaging pharmaceutical products. They had a Collective
Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993 which had the
following stipulation

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.

Prior to the expiration of the CBA the officers of the Union asked the Company about the current
CBA but they were rejected for such issue must be discussed in a formal negotiations. Since
denied, all the rank-and file employees refused to follow their regular two-shift work schedule
and stopped working and left their workplace without sealing the containers and securing the
raw materials they were working on. 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.

Issue: WON the overtime boycott and slowdown campaig of the union members and
officers be considered as strike.

Held:

Yes. In the provision of the stipulations of the parties it is shown that the working hours
may be changed, at the discretion of the company, should such change be necessary for its
operations, and that the employees shall observe such rules as have been laid down by the
company. The 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.
 PAMPANGA SUGAR DEVELOPMENT CO., INC. vs. COURT OF INDUSTRIAL RELATIONS
AND SUGAR WORKERS ASSOCIATION
G.R. No. L-39387 June 29, 1982
While rights may be waived, the same must not be contrary to law, public order, public
policy, morals or good customs or prejudicial to a third person with a right recognized by law,
Quitclaim agreements are contrary to public policy. Once a civil action is filed in court, the cause
of action may not be the subject of compromise unless the same is by leave of the court
concerned

Facts:

Sometime in February, 1956, the workers' affiliates of respondent Union staged a strike
against petitioner company. After six years CIR issued an order directing petitioner company to
reinstate the members of respondent union and some 88 union members were thus reinstated
by petitioner. However, petitioner discriminated against the reemployed workers with respect to
wage rates, off-season pay, cost of living allowance, milling bonus and Christmas bonus by
depriving them of aforesaid benefits or by granting to some members benefits lesser than those
given to members of the Pasudeco Workers Union, another labor group in the service of
petitioner. By reason of such denial and/or grant of lower benefits to respondent's members
because of their union affiliation and union activities, respondent filed with the CIR a complaint
for unfair labor practice against petitioner. CIR handed down a decision adjudging herein
petitioner guilty of unfair labor practice acts as charged and finding the same to have been
committed, and thereby directing petitioner to cease and desist from further committing the said
unfair labor practice acts and directing petitioner to pay wage differentials to certain workers and
fringe benefits as would be found due and payable to them and to readmitted seasonal and
casual members of respondent union totalling 88 with the exception of 7 workers. Upon motion
of the company, CIR directing its Examining Division to compute the wage and fringe benefits
differentials due the 28 individual workers who did not waive or quitclaim their rights established
by the decision of December 4, 1972 as well as the attorney's fees equivalent to 20% of the
total wage and fringe benefits differentials due the fifty-three (53) individual workers who
executed agreements with the company waiving and quitclaiming their rights, benefits and
privileges under the aforesaid decision

Issue: WON the quitclaims valid

Held:

No. Firstly, said quitclaims were secured on December 27, 1972 by petitioner after it lost
its case in the lower court when the latter promulgated its decision on the case on December 4,
1972. Obviously in its desire to deny what is due the sugar workers concerned and frustrate the
decision of the lower court awarding benefits to them, it used its moral ascendancy as employer
over said workers to secure said quitclaims.

Secondly, while rights may be waived, the same must not be contrary to law, public
order, public policy, morals or good customs or prejudicial to a third person with a right
recognized by law (Art. 6, New Civil Code). The quitclaim agreements contain the following
provisions in paragraph I 1, No. 3, thereof:
3. Nothing herein stipulated shall be construed as an admission and/or
recognition by the Party of The Second Part of its failure refusal and/or omission
 as employer, to faithfully comply with the pertinent laws, rules and regulations
and/or agreements, nor its liability therefor and thereunder.

Needless to state, the foregoing provisions are contrary to law, It exempts the petitioner
from any legal liability. The above- quoted provision renders the quitclaim agreements void ab
initio in their entirety since they obligated the workers concerned to forego their benefits, while
at the same time, exempted the petitioner from any liability that it may choose to reject. This
runs counter to Article 22 of the New Civil Code which provides that no one shall be unjustly
enriched at the expense of another.

Thirdly, the alleged quitclaim agreements are contrary to public policy. Once a civil
action is filed in court, the cause of action may not be the subject of compromise unless the
same is by leave of the court concerned. Otherwise, this will render the entire judicial system
irrelevant to the prejudice of the national interest. Parties to litigations cannot be allowed to trifle
with the judicial system by coming to court and later on agreeing to a compromise without the
knowledge and approval of the court. This converts the judiciary into a mere tool of party-
litigants who act according to their whims and caprices. This is more so when the court has
already rendered its decision on the issues submitted.
 EASTERN ASSURANCE & SURETY CORPORATION, vs. SECRETARY OF LABOR,
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, ELVIRA VENTURA, ESTER
TRANGUILLAN, et al.
G.R. No. L-79436-50 January 17, 1990

Secretary of Labor gave the POEA "on its own initiative or upon filing of a complaint or
report or upon request for investigation by any aggrieved person authority to conduct the
necessary proceedings for the suspension or cancellation of the license or authority of any
agency or entity" for certain enumerated offenses including —
1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or
services, or any fee or bond in excess of what is prescribed by the Administration, and
2) any other violation of pertinent provisions of the Labor Code and other relevant laws, rules
and regulations.

Facts:
Petitioner filed a surety bond for the application for a license to engage in business as a
recruitment agency with the Philippine Overseas Employment Administration (POEA) of J & B
Manpower Specialist, Inc.
As narrated by the Secretary of Labor, 33 persons applied for overseas employment with
J & B In consideration of promised deployment, complainants paid respondent various amounts
for various fees. Most of' the receipts issued were sighed by Executive Vice-President of J & B.
Because of non-deployment, applicants filed separate complaints with the Licensing and
Regulation Office of POEA against J & B for violation of Articles 32 and 34 (a) of the Labor
Code. POEA found EASCO was declared jointly and severally liable with & B to twenty-nine
(29) complainants and be forever banned from participation in the overseas employment
program. It is ordered to cease and desist from further engaging in recruitment activities
otherwise it shall be prosecuted for illegal recruitment. EASCO contends that the POEA had no
"adjudicatory jurisdiction" over the monetary claims in question because the same "did not arise
from employer-employee relations.

Issue: WON POEA has jurisdiction over the claims of the applicants

Held:
Yes. Secretary of Labor has the power under Section 35 of the law to apply these
sanctions, as well as the authority, conferred by Section 36, not only, to "restrict and regulate
the recruitment and placement activities of all agencies," but also to "promulgate rules and
regulations to carry out the objectives and implement the provisions" governing said activities.
Pursuant to this rule-making power thus granted, the Secretary of Labor gave the POEA 9 "on
its own initiative or upon filing of a complaint or report or upon request for investigation by any
aggrieved person, . . . (authority to) conduct the necessary proceedings for the suspension or
cancellation of the license or authority of any agency or entity" for certain enumerated offenses
including —
1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or
services, or any fee or bond in excess of what is prescribed by the Administration, and
2) any other violation of pertinent provisions of the Labor Code and other relevant laws, rules
and regulations.
Implicit in these powers is the award of appropriate relief to the victims of the offenses
committed by the respondent agency or contractor, specially the refund or reimbursement of
such fees as may have been fraudulently or otherwise illegally collected, or such money, goods
or services imposed and accepted in excess of what is licitly prescribed. It would be illogical and
absurd to limit the sanction on an offending recruitment agency or contractor to suspension or
cancellation of its license, without the concomitant obligation to repair the injury caused to its
victims. It would result either in rewarding unlawful acts, as it would leave the victims without
recourse, or in compelling the latter to litigate in another forum, giving rise to that multiplicity of
actions or proceedings which the law abhors.
 FINMAN GENERAL ASSURANCE CORP. vs. WILLIAM INOCENCIO, ET AL. AND EDWIN
CARDONES, THE ADMINISTRATOR, PHILIPPINE OVERSEAS AND EMPLOYMENT
ADMINISTRATION, THE SECRETARY OF LABOR AND EMPLOYMENT
G.R. No. 90273-75 November 15, 1989

Section 13 of Rule VI, Book I of the POEA Rules and Regulations expressly authorize
the POEA Administrator or the Secretary of Labor to impose fines "in addition to or in lieu of the
penalties of suspension or cancellation" of the violator recruitment agency's license.

Facts:

Pan Pacific posted a surety bond issued by petitioner Finman General Assurance
Corporation ("Finman") and was granted a license to operate by the POEA. Private respondents
filed with the POEA separate complaints against Pan Pacific for violation of Articles 32 and 34
(a) of the Labor Code, as amended and for refund of placement fees paid to Pan Pacific. The
complainants alleged that Pan Pacific charged and collected such fees from them but did not
secure employment for them. POEA Administrator motu proprio impleaded petitioner Finman as
party respondent in its capacity as surety for Pan Pacific. POEA then ordered Finman and Pan
Pacific to pay jointly and severally complainants' claims

Issue: WON POEA has jurisdiction over money claims of the applicants

Held:

Yes. There is, hence, no question that, both under the Labor Code and the POEA Rules
and Regulations, Pan Pacific had violated at least one of the conditions for the grant and
continued use of the recruitment license granted to it. There can, similarly, be no question that
the POEA Administrator and the Secretary of Labor are authorized to require Pan Pacific to
refund the placement fees it had charged private respondents without securing employment for
them and to impose the fine of P60,000.00 upon Pan Pacific. Article 36 of the Labor Code
authorizes the Secretary of Labor "to restrict and regulate" the recruitment and placement
activities of agencies like Pan Pacific and "to issue orders and promulgate rules and regulations
to carry out the objectives and implement the provisions of [Title I on "Recruitment and
Placement of Workers]," including of course, Article 32 on "Fees to be paid by workers," quoted
earlier. Upon the other hand, Section 13 of Rule VI, Book I of the POEA Rules and Regulations
expressly authorize the POEA Administrator or the Secretary of Labor to impose fines "in
addition to or in lieu of the penalties of suspension or cancellation" of the violator recruitment
agency's license.
 NORBERTO SORIANO vs.OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT
KNUTSEN O.A.S., and NATIONAL LABOR RELATIONS COMMISSION (Second Division)
G.R. No. 78409 September 14, 1989

An alteration of the employment contract without the approval of the Department of

Labor is a serious violation of law.

Facts:

Petitioner sought employment and was hired by private respondent Knut Knutsen O.A.S.
through its authorized shipping agent in the Philippines, Offshore Shipping and Manning
Corporation. As evidenced by the Crew Agreement, petitioner was hired to work as Third Marine
Engineer on board Knut Provider" with a salary of US$800.00 a month on a conduction basis for
a period of fifteen (15) days. He admitted that the term of the contract was extended to six (6)
months by mutual agreement on the promise of the employer to the petitioner that he will be
promoted to Second Engineer. He later signed off due to the alleged failure of private
respondent-employer to fulfill its promise to promote petitioner to the position of Second
Engineer and for the unilateral decision to reduce petitioner's basic salary from US$800.00 to
US$560.00. Petitioner was made to shoulder his return airfare to Manila. In the Philippines, he
filed a complaint before the POEA against private respondent for payment of salary differential,
overtime pay, unpaid salary against private respondent for payment of salary differential,
overtime pay, unpaid salary. The OIC of POEA found that petitioner-complainant's total monthly
emolument is US$800.00 inclusive of fixed overtime as shown and proved in the Wage Scale
submitted to the Accreditation Department of its Office which would therefore not entitle
petitioner to any salary differential; that the version of complainant that there was in effect
contract substitution has no grain of truth because although the Employment Contract seems to
have corrections on it, said corrections or alterations are in conformity with the Wage Scale duly
approved by the POEA

Issue: WON OIC of the POEA committed grave abuse of discretion and/or acted without or in
excess of jurisdiction by disregarding the alteration of the employment contract made by private
respondent.

Held:
No. here is no dispute that an alteration of the employment contract without the approval
of the Department of Labor is a serious violation of law.
Specifically, the law provides:
Article 34 paragraph (i) of the Labor Code reads:

Prohibited Practices. — It shall be unlawful for any individual, entity, licensee, or

holder of authority:
xxxx
(i) To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up to
and including the period of expiration of the same without the approval of the
Department of Labor.
In the case at bar, both the Labor Arbiter and the National Labor Relations Commission
correctly analyzed the questioned annotations as not constituting an alteration of the original
employment contract but only a clarification thereof which by no stretch of the imagination can
be considered a violation of the above-quoted law. The purpose of Article 34, paragraph 1 of the
Labor Code is clearly the protection of both parties. In the instant case, the alleged amendment
served to clarify what was agreed upon by the parties and approved by the Department of
Labor. To rule otherwise would go beyond the bounds of reason and justice.
 SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING & EQUIPMENT SUPPLY vs.
NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS COMMISSION AND
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
G.R. No. 82252 February 28, 1989

The reason why the law requires that the POEA should approve and verify a contract
under Article 34(i) of the Labor Code is to insure that the employee shall not thereby be placed
in a disadvantageous position and that the same are within the minimum standards of the terms
and conditions of such employment contract set by the POEA. This is why a standard format for
employment contracts has been adopted by the Department of Labor. However, there is no
prohibition against stipulating in a contract more benefits to the employee than those required
by law.

Facts:
A "crew Agreement" was entered into by private respondent and Philimare whereby the
latter employed the former as able seaman on board its vessel "Santa Cruz" with a monthly
salary of US $ 300.00. Said agreement was processed and approved by the National Seaman's
Board (NSB). While on board said vessel the said parties entered into a supplementary contract
of employment stating that the employer shall be obliged to insure the employee during his
engagement against death or permanent invalidity caused by accident on board. On October 6,
1983 Balatongan met an accident in the Suez Canal, Egypt as a result of which he was
hospitalized at the Suez Canal Authority Hospital. Later, he was repatriated to the Philippines
and was hospitalized at the Makati Medical Center On August 19, 1985 the medical certificate
was issued describing his disability as "permanent in nature." Balatongan demanded payment
for his claim for total disability insurance but his claim was denied for having been submitted to
the insurers beyond the designated period for doing so. Respondent then filed a complaint with
the POEA for non-payment of his claim for permanent total disability with damages and
attorney's fees. POEA rendered its decision in favor of the respondent and ordered petitioner to
pay him the amount for his permanent total disability insurance

Issue: WON POEA erred in applying the Supplemental Contract

Held:
No. The supplementary contract of employment was entered into between petitioner and
private respondent to modify the original contract of employment The reason why the law
requires that the POEA should approve and verify a contract under Article 34(i) of the Labor
Code is to insure that the employee shall not thereby be placed in a disadvantageous position
and that the same are within the minimum standards of the terms and conditions of such
employment contract set by the POEA. This is why a standard format for employment contracts
has been adopted by the Department of Labor. However, there is no prohibition against
stipulating in a contract more benefits to the employee than those required by law. Thus, in this
case wherein a "supplementary contract" was entered into affording greater benefits to the
employee than the previous one, and although the same was not submitted for the approval of
the POEA, the public respondents properly considered said contract to be valid and
enforceable. Indeed, said pronouncements of public respondents have the effect of an approval
of said contract. Moreover, as said contract was voluntarily entered into by the parties the same
is binding between them. 11 Not being contrary to law, morals, good customs, public policy or
public order, its validity must be sustained. 12 By the same token, the court sustains the ruling of
public respondents that the provision in the supplementary contract whereby private respondent
waives any claim against petitioners for damages arising from death or permanent disability is
against public policy, oppressive and inimical to the rights of private respondent. The said
provision defeats and is inconsistent with the duty of petitioners to insure private respondent
against said contingencies as clearly stipulated in the said contract. There is no question that
under the said supplementary contract of employment, it is the duty of the employer, petitioners
herein, to insure the employee, during his engagement, against death and permanent invalidity
caused by accident on board up to $ 50,000.00. Consequently, it is also its concomitant
obligation to see to it that the claim against the insurance company is duly filed by private
respondent or in his behalf, and within the time provided for by the terms of the insurance
contract. t was only on August 19, 1985 that he was issued a medical certificate describing his
disability to be permanent in nature. It was not possible for private respondent to file a claim for
permanent disability with the insurance company within the one-year period from the time of the
injury, as his disability was ascertained to be permanent only thereafter. Petitioners did not exert
any effort to assist private respondent to recover payment of his claim from the insurance
company. They did not even care to dispute the finding of the insurer that the claim was not flied
on time. 14 Petitioners must, therefore, be held responsible for its omission, if not negligence, by
requiring them to pay the claim of private respondent.
 MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY vs THE NATIONAL LABOR
RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
and FRANCISCO D. REYES
G.R. No. 77279 April 15, 1988
A private employment agency may be sued jointly and solidarily with its foreign principal
for violations of the recruitment agreement and the contracts of employment
Facts:
Petitioner, as agent of Ali and Fahd Shabokshi Group, a Saudi Arabian firm, recruited
private respondent to work in Saudi Arabia as a steelman. The term of the contract was for one
year, however the contract provided for its automatic renewal. The contract was automatically
renewed when private respondent was not repatriated by his Saudi employer but instead was
assigned to work as a crusher plant operator. While he was working as a crusher plant operator,
private respondent's right ankle was crushed under the machine he was operating. after the
expiration of the renewed term, private respondent returned to the Philippines. His ankle was
operated on at the Sta. Mesa Heights Medical Center for which he incurred expenses. On
September 9, 1983, he returned to Saudi Arabia to resume his work. On May 15,1984, he was
repatriated. Upon his return, he had his ankle treated for which he incurred further expenses.
On the basis of the provision in the employment contract that the employer shall compensate
the employee if he is injured or permanently disabled in the course of employment, private
respondent filed a claim, and POEA rendered judgment in his favor, that the NLRC affirmed

Issue: WON NLRC gravely abused its discretion when it ruled that petitioner was liable to
private respondent for disability benefits since at the time he was injured his original
employment contract, which petitioner facilitated, had already expired.

Held:
NO. Private respondents contract of employment cannot be said to have expired on May
14, 1982 as it was automatically renewed since no notice of its termination was given by either
or both of the parties at least a month before its expiration, as so provided in the contract itself.
Therefore, private respondent's injury was sustained during the lifetime of the contract. Even if
indeed petitioner and the Saudi principal had already severed their agency agreement at the
time private respondent was injured, petitioner may still be sued for a violation of the
employment contract because no notice of the agency agreement's termination was given to the
private respondent.
 ROYAL CROWN INTERNATIONALE, vs. NATIONAL LABOR RELATIONS COMMISSI0N
and VIRGILIO P. NACIONALES
G.R. No. 78085 October 16, 1989

In applying for its license to operate a private employment agency for overseas
recruitment and placement, whereby a document or verified undertaking it assumed all
responsibilities for the proper use of its license and the implementation of the contracts of
employment with the workers it recruited and deployed for overseas employment

Facts:

Petitioner recruited and deployed private respondent for employment with ZAMEL as an
architectural draftsman in Saudi Arabia. ZAMEL later terminated the employment of private
respondent on the ground that his performance was below par. For three (3) successive days
thereafter, he was detained at his quarters and was not allowed to report to work until his exit
papers were ready. On February 16, 1984, he was made to board a plane bound for the
Philippines. Private respondent then filed a case with POEA against petitioner and ZAMEL for
illegal dismissal. POEA then decided, which the NLRC affirmed, in favor of private respondent
and held the petitioner and ZAMEL jointly and solidarily liable for the amount to be paid to
Nacionales.

Issue: WON NLRC and POEA erred in ruling that petitioner be held jointly and solidarily liable
with the foreign-based employer for any claim which may arise in connection with the
implementation of the employment contracts of the employees recruited and deployed abroad

Held:

No. Petitioner conveniently overlooks the fact that it had voluntarily assumed solidary
liability under the various contractual undertakings it submitted to the Bureau of Employment
Services. In applying for its license to operate a private employment agency for overseas
recruitment and placement, petitioner was required to submit, among others, a document or
verified undertaking whereby it assumed all responsibilities for the proper use of its license
and the implementation of the contracts of employment with the workers it recruited and
deployed for overseas employment. It was also required to file with the Bureau a formal
appointment or agency contract executed by the foreign-based employer in its favor to recruit
and hire personnel for the former, which contained a provision empowering it to sue and be
sued jointly and solidarily with the foreign principal for any of the violations of the recruitment
agreement and the contracts of employment. Petitioner was required as well to post such cash
and surety bonds as determined by the Secretary of Labor to guarantee compliance with
prescribed recruitment procedures, rules and regulations, and terms and conditions of
employment as appropriate. These contractual undertakings constitute the legal basis for
holding petitioner, and other private employment or recruitment agencies, liable jointly and
severally with its principal, the foreign-based employer, for all claims filed by recruited workers
which may arise in connection with the implementation of the service agreements or
employment contracts.
 FACILITIES MANAGEMENT CORPORATION, J. S. DREYER, and J. V. CATUIRA vs.
LEONARDO DE LA ROSA AND THE HONORABLE COURT OF INDUSTRIAL RELATIONS
G.R. No. L-38649 March 26, 1979

If a foreign corporation, not engaged in business in the Philippines, is not banned from
seeking redress from courts in the Philippines, a fortiori, that same corporation cannot claim
exemption from being sued in Philippine courts for acts done against a person or persons in the
Philippines.
Facts:
Leonardo dela Rosa sought his reinstatement, with full backwages, as well as the
recovery of his overtime compensation, swing shift and graveyard shift differentials. Petitioner
alleged that he was employed by respondents as, painter, houseboy and cashier. He further
averred that from December, 1965 to August, 1966, inclusive, he rendered overtime services
daily and that this entire period was divided into swing and graveyard shifts to which he was
assigned, but he was not paid both overtime and night shift premiums despite his repeated
demands from respondents. The petitioner, a foreign corporation domiciled outside the
Philippines was ordered by CIR then to pay the unpaid overtime and premium pay. However, on
certiorari, the petitioner contended that because it was domiciled outside and not doing
business in Philippines, it could not be sued in the country.

Issue: WON CIR can validly affirm a judgment against persons domiciled outside and not doing
business in the Philippines

Held:

Yes. the object of Sections 68 and 69 of the Corporation Law was not to prevent the
foreign corporation from performing single acts, but to prevent it from acquiring a domicile for
the purpose of business without taking the steps necessary to render it amenable to suit in the
local courts. It was never the purpose of the Legislature to exclude a foreign corporation which
happens to obtain an isolated order for business from the Philippines, from securing redress in
the Philippine courts.

Indeed, if a foreign corporation, not engaged in business in the Philippines, is not banned from
seeking redress from courts in the Philippines, a fortiori, that same corporation cannot
claim exemption from being sued in Philippine courts for acts done against a person or persons
in the Philippines.
 PEOPLE vs BULU CHOWDURY
G.R. No. 129577-80. February 15, 2000

An employee of a company or corporation engaged in illegal recruitment may be held

liable as principal, together with his employer, if it is shown that he actively and consciously
participated in illegal recruitment.

Facts:
Chowdury was charged before the RTC of Manila with the crime of illegal recruitment in
a large scale and the prosecution presented four witnesses stating that it was Chowdury who
interviewed them and presented himself as the consultant of Craftrade. As a defense, Chowdury
admitted that he interviewed private complainants on different dates. Their office secretary
handed him their bio-data and thereafter he led them to his room where he conducted the
interviews. During the interviews, he had with him a form containing the qualifications for the job
and he filled out this form based on the applicant's responses to his questions. He then
submitted them to Mr. Utkal Chowdury who in turn evaluated his findings. He never received
money from the applicants. He resigned from Craftrade on November 12, 1994. The RTC held
him guilty of the crime.

Issue: WON Chowdury is liable for illegal recruitment in a large scale

Held:
No. As stated in the first sentence of Section 6 of RA 8042, the persons who may be
held liable for illegal recruitment are the principals, accomplices and accessories. An employee
of a company or corporation engaged in illegal recruitment may be held liable as principal,
together with his employer[ if it is shown that he actively and consciously participated in
illegal recruitment. The employee or agent of a corporation engaged in unlawful business
naturally aids and abets in the carrying on of such business and will be prosecuted as principal
if, with knowledge of the business, its purpose and effect, he consciously contributes his efforts
to its conduct and promotion, however slight his contribution may be. Upon examination of the
records, however, we find that the prosecution failed to prove that accused-appellant was aware
of Craftrade's failure to register his name with the POEA and that he actively engaged in
recruitment despite this knowledge. The obligation to register its personnel with the POEA
belongs to the officers of the agency. A mere employee of the agency cannot be expected to
know the legal requirements for its operation. The evidence at hand shows that accused-
appellant carried out his duties as interviewer of Craftrade believing that the agency was duly
licensed by the POEA and he, in turn, was duly authorized by his agency to deal with the
applicants in its behalf. Accused-appellant in fact confined his actions to his job description. He
merely interviewed the applicants and informed them of the requirements for deployment but he
never received money from them. Their payments were received by the agency's cashier,
Josephine Ong. Furthermore, he performed his tasks under the supervision of its president and
managing director. Hence, we hold that the prosecution failed to prove beyond reasonable
doubt accused-appellant's conscious and active participation in the commission of the crime of
illegal recruitment. His conviction, therefore, is without basis.
 PEOPLE vs CABAIS
G.R. No. 129070. March 16, 2001

An employee of a company or corporation engaged in illegal recruitment may be held

liable as principal, together with his employer, if it is shown that he actively and consciously
participated in illegal recruitment.

Facts:
Cabais was convicted by the RTC of illegal recruitment committed in large scale by a
syndicate. Cabais talked to complainants several times. persuading them to be contract workers
in South Korea. In subsequent meetings, accused Cabais introduced accused Anita Forneas as
her boss and the owner of RSEA. Accused Cabais and Forneas tried to convince them to
submit their applications so that RSEA could process them. Later on, accused Cabais
introduced to them a certain Korean named Harm Yo Hong. Harm Yo Hong managed to
persuade the complainants to apply as contract workers in South Korea. As a defense, Cabais
denied all the charges and argued that she was hired as an employee to augment her
insufficient payment of the placement fee. As such employee, her duties included processing
other applications for job placement, entertaining applicants, accompanying accused Anita
Forneas and doing errands for the latter. Accused Cabais denied involvement in the recruitment
of complainants, claiming that it was her boss who was doing recruitment activities. She
admitted, though, that she received payments from complainants, but alleged that she was
merely acting upon the instruction of Forneas and that she turned over all the payments to her
employer.

Issue: WON Cabais was guilty of illegal recruitment in large scale by syndicate

Held:
Yes. An employee of a company or corporation engaged in illegal recruitment may be
held liable as principal, together with his employer, if it is shown that he actively and consciously
participated in illegal recruitment. Recruitment is any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not: Provided,
That any person or entity which, in any manner, offers or promises for a fee employment to two
or more persons shall be deemed engaged in recruitment and placement.[ In this case,
evidence showed that accused-appellant was the one who informed complainants of job
prospects in Korea and the requirements for deployment. She also received money from them
as placement fees. All of the complainants testified that they personally met accused-appellant
and transacted with her regarding the overseas job placement offers. Complainants parted with
their money, evidenced by receipts signed by accused Cabais and accused Forneas. Thus,
accused-appellant actively participated in the recruitment of the complainants. Her acts
constituted recruitment, and considering that she admittedly had no license or authority to
recruit workers for overseas employment, accused-appellant is guilty of illegal recruitment.
Despite the fact that she was just an ordinary employee of the company, her criminal liability
would still stand for being a conspirator with the corporate officers in undertaking illegal
recruitment activities. Since the recruitment involves three or more persons, accused-
appellant is guilty of illegal recruitment in a large scale punishable under Article 39 of the Labor
Code with life imprisonment and a fine of one hundred thousand pesos.
 PEOPLE vs FLORES
G.R. Nos. 138535-38. April 19, 2001

Art. 13 (b) of the Labor Code defines recruitment and placement as referring to any act
of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for employment, locally or abroad,
whether for profit or not. The same article further states that any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement.

Facts:
Flores was held guilty by the RTC for illegal recruitment in large scale together with
Baloran, Domingo, and Mendoza. As a defense, accused-appellant denied having promised
complainants overseas employment and having collected money from them. According to her,
she came to know Andy Baloran and Engr. Leonardo Domingo through Joseph Mendoza, who
referred her and her son, Noli, to them in connection with their own applications for overseas
employment. She came to know Joseph Mendoza through Elsa Cas and Felixberto Leongson,
Jr. Accused-appellant claimed that she and Noli agreed to pay Baloran, Domingo, and Mendoza
the total sum of P90,000.00 for their application fees. Since she did not have enough money to
cover the amount, she asked her neighbors and friends to help her get a loan she used the
amount to pay for her and her son’s recruitment fees. accused-appellant filed a complaint for
illegal recruitment and estafa against them on November 7, 1994 in the NBI, including as her
co-complainants Felixberto Leongson, Jr., Ronald Frederizo, Larry Tibor, Eduardo Sibbalucas,
Har Taccad, Romeo Gallardo, Joseph Mendoza, and her son, Noli Flores.[16]

Issue: WON Flores was guilty of illegal recruitment in large scale

Held:
Yes. Art. 13 (b) of the Labor Code defines recruitment and placement as referring to any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for employment, locally or abroad,
whether for profit or not. The same article further states that any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement. Accused-appellant contends that all she did was to refer
complainants to Domingo, Baloran, and Mendoza. However, under Art. 13 (b) of the Labor
Code, recruitment includes referral, which is defined as the act of passing along or forwarding
an applicant for employment after initial interview of a selected applicant for employment to a
selected employer, placement officer, or bureau. In these cases, accused-appellant did more
than just make referrals. She actively and directly enlisted complainants for supposed
employment abroad, even promising them jobs as seamen, and collected moneys from them.
 PEOPLE vs SAGAYADO
G.R. Nos. 124671-75. September 29, 2000

Illegal recruitment includes any of the following activities that would constitute
recruitment and placement: canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, including referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. Article 13 (b) further provides that any
person or entity which, in any manner, offers or promises for a fee employment to two (2) or
more persons shall be deemed engaged in recruitment and placement

Facts:
Sagayado was held guilty by the RTC for the crime of illegal recruitment in large scale.
The accused denied having recruited any of the private complainants. She claimed that they
came to her voluntarily after being informed that she was able to send her three (3) sons to
Korea. While accused admitted having received money from complainants Gina Cleto and Naty
Pita, she said she used their money to buy their plane tickets. Gina and Naty were not able to
leave because the Korean government imposed a visa requirement beginning January,
1992. When asked why she was not able to return the money of Gina and Naty, accused said
that she returned the plane tickets to the Tour Master travel Agency for refund but said agency
did not make reimbursements. With respect to complainants Jessie Bolinao and Rogelio Tibeb,
the accused denied having received any money from them.

Issue: WON Sagaydo is guilty of illegal recruitment in large scale

Held:
Yes. Illegal recruitment has been defined to include the act of engaging in any of the
activities mentioned in Article 13 (b) of the Labor Code without the required license or authority
from the POEA. Under the aforesaid provision, any of the following activities would constitute
recruitment and placement: canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, including referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. Article 13 (b) further provides that any
person or entity which, in any manner, offers or promises for a fee employment to two (2) or
more persons shall be deemed engaged in recruitment and placement. Illegal recruitment is
deemed committed in large scale if committed against three (3) or more persons, individually or
as a group. This crime requires proof that the accused: (1) engaged in the recruitment and
placement of workers defined under Article 13 or in any of the prohibited activities under Article
34 of the Labor Code; (2) does not have a license or authority to lawfully engage in
the recruitment and placement of workers; and (3) committed the infraction against three or
more persons, individually or as a group.
All the aforementioned requisites were present in this case. The accused-appellant made
representations to each of the private complainants that she could send them to Korea to work
as factory workers, constituting a promise of employment which amounted to recruitment as
defined under Article 13 (b) of the Labor Code. From the testimonies of the private complainants
that the trial court found to be credible and untainted with improper motives, there is no denying
that accused-appellant gave the complainants the distinct impression that she had the power or
ability to send them abroad for work such that the latter were convinced to part with their money
in order to be employed. As against the positive and categorical testimonies of the
complainants, mere denial of accused-appellant cannot prevail. The record also showed that
accused-appellant did not have the authority to recruit for employment abroad, per certification
issued by the POEA Regional Extension Unit in Baguio City
 THE PEOPLE OF THE PHILIPPINES, vs. BENZON ONG y SATE alias "BENZ ONG,"
G.R. No. 119594 January 18, 2000

"Referral" is employment as the act of passing along or forwarding of an applicant for

employment after initial interview of a selected applicant for employment to a selected employer,
placement officer or bureau.

Facts:
Benzon Ong was found guilty of illegal dismissal in large scale by the RTC of Baguio
City for he failed to comply with his commitment to send complainants Bacasnot, Eliw, Kamura,
Malinias, Bagni, Gallao, Esteban and Joaquin to Taiwan as he could no longer be located after
collecting placement fees from them. As his defense, he only offered to scout for a recruitment
agency in Manila. Accused-appellant accompanied complainants to Steadfast Recruitment
Agency in Manila and introduced them to a certain Marilyn Pagsibigan, Marketing Manager of
the agency. He came to know about the agency through a friend in Manila, one Ernesto Sy. He
denied collecting placement fees from the complainants and claimed that his signatures on the
receipts had been forged.

Issue: WON Ong was guilty of illegal recruitment in large scale

Held:
Yes. Accused-appellant is charged with violation of Art. 38 of the Labor Code, as
amended by Presidential Decree No. 2018, which provides that any recruitment activity,
including the prohibited practices enumerated in Art. 34 of said Code, undertaken by persons
who have no license or authority to engage in recruitment for overseas employments is illegal
and punishable under Art. 39. Under Art. 13(b) of the Labor Code, "recruitment and placement"
refer to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for employment,
locally or abroad, whether for profit or not; provided, that any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons, is considered
engaged in recruitment and placement. On the other hand, "referral" is employment as the act
of passing along or forwarding of an applicant for employment after initial interview of a selected
applicant for employment to a selected employer, placement officer or bureau.

To prove illegal recruitment, it must be shown that the accused-appellant gave

complainants the distinct impression that he had the power or ability to send complainants
abroad for work such that the latter were convinced to part with their money in order to be
employed. Accused-appellant represented himself to complainants as one capable of deploying
workers abroad and even quoted the alleged salary rates of factory and construction workers in
Taiwan. He advised Bacasnot to accept a job as a factory worker first because it would be then
easier for him to transfer jobs once he got to Taiwan. Accused-appellant said his mother, who
was based in Taiwan, could help Bacasnot. Bacasnot paid accused-appellant an initial
placement fee agreeing to pay the balance through salary deductions once he was employed.
Accused-appellant also promised jobs to Eliw and the other complainants. He accompanied
them to Manila so that they could be interviewed and physically examined at the Steadfast
Recruitment Agency with which accused-appellant represented he was connected. These acts
of accused-appellant created the distinct impression on the eight complainants that he was a
recruiter for overseas employment. There is no question that he was neither licensed nor
authorized to recruit workers for overseas employment. Nor is there any question that he dealt
with complainants. What he claims is that he merely "suggested" to complainants to apply at the
Steadfast Recruitment Agency, which is a recruitment agency.

Even if accused-appellant did no more than "suggest" to complainants where they could
apply for overseas employment, his act constituted "referral" within the meaning of Art. 13(b) of
the Labor Code. Indeed, the testimonial and documentary evidence in the record shows that
accused-appellant did more than just make referrals. The evidence shows that he made
misrepresentations to them concerning his authority to recruit for overseas employment and
collected various amounts from them for placement fees. Clearly, accused-appellant committed
acts constitutive of large scale illegal recruitment.
 PEOPLE VS CALONZO
G.R. Nos. 115150-55. September 27, 1996
Illegal recruitment in large scale is committed when a person "(a) undertakes any
recruitment activity defined under Article 13(b) or any prohibited practice enumerated under
Article 34 of the Labor Code; (b) does not have a license or authority to lawfully engage in the
recruitment and placement of workers; and (c) commits the sameagainst three or more persons,
individually or as a group."

Facts:
Calonzo was charged with Illegal recruitment in large scale. Calonzo was affirmed by the
POEA that he was not authorized to recruit workers for employment abroad. As his defense, he
admits that he knew the complainants as they have sought his assistance regarding their real
estate business. He denies knowing the complaining witnesses except Danilo de los Reyes and
Belarmino Torregrosa who once visited him in his office. While he disclaims the receipts
presented by the prosecution as official receipts of his R. A. C. Business Agency he admits that
the signatures thereon were similar to his.

Issue: WON Calonzo is guilty of illegal recruitment in large scale

Held:
Yes. llegal recruitment in large scale is committed when a person "(a) undertakes any
recruitment activity defined under Article 13(b) or any prohibited practice enumerated under
Article 34 of the Labor Code; (b) does not have a license or authority to lawfully engage in the
recruitment and placement of workers; and (c) commits the sameagainst three or more persons,
individually or as a group." The testimony of complainants evidently showed that Calonzo was
engaged in recruitment activities in large scale. Firstly, he deluded complainants into believing
that jobs awaited them in Italy by distinctly impressing upon them that he had the facility to send
them for work abroad. He even showed them his passport to lend credence to his
claim. Secondly, POEA likewise certified that neither Calonzo nor R. A. C. Business
Agency was licensed to recruit workers for employment abroad. Appellant admitted this fact
himself. Thirdly, appellant recruited five (5) workers thus making the crime illegal recruitment in
large scale constituting economic sabotage.
All the complaining witnesses testified that they gave their money to Calonzo through
Loreta Castaeda who in turn gave the amounts to Calonzo in their presence. In support thereof
complainants even presented receipts issued by the R. A. C. Business Agency with Calonzo's
signature affixed thereon. Nobody corroborated Calonzo's denial. Even Loreta who could have
confirmed such denial testified that all the amounts given by the complainants were turned over
by her to Calonzo. The attempt of the defense at reinforcing such denial proved futile when it
presented Carmeo Alix to testify that appellant owned another import-export business as it had
no relevance to his defense.
 PEOPLE vs FRANCISCO HERNANDEZ (at large), KARL REICHL, and YOLANDA
GUTIERREZ DE REICHL, accused,
G.R. No. 141221-36 March 7, 2002

There is illegal recruitment when one who does not possess the necessary authority or
license gives the impression of having the ability to send a worker abroad.

Facts:
Eight (8) information for syndicated and large scale illegal recruitment were filed against
accused-appellants, spouses Karl and Yolanda Reichl, together with Francisco Hernandez.
Only the Reichl spouses were tried and convicted by the trial court as Francisco Hernandez
remained at large. The evidence for the prosecution consisted of the testimonies of private
complainants; a certification from the Philippine Overseas Employment Administration (POEA)
that Francisco Hernandez, Karl Reichl and Yolanda Gutierrez Reichl in their personal capacities
were neither licensed nor authorized by the POEA to recruit workers for overseas
employment;2 the receipts for the payment made by private complainants; and two documents
signed by the Reichl spouses where they admitted that they promised to secure Austrian tourist
visas for private complainants and that they would return all the expenses incurred by them if
they are not able to leave by March 24, 1993,3 and where Karl Reichl pledged to refund to
private complainants the total sum of P1,388,924.00 representing the amounts they paid for the
processing of their papers.4

Issue: WON accused-appellants were guilty of syndicated and large scale illegal recruitment

Held:
Yes. Article 38 of the Labor Code defines illegal recruitment as "any recruitment
activities, including the prohibited practices enumerated under Article 34 of (the Labor Code), to
be undertaken by non-licensees or non-holders of authority." The term "recruitment and
placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, including referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not, provided that any person or entity
which, in any manner, offers or promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement.23 The law imposes a higher penalty when the
illegal recruitment is committed by a syndicate or in large scale as they are considered an
offense involving economic sabotage. Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction, enterprise or scheme. It is deemed
committed in large scale if committed against three (3) or more persons individually or as a
group. In the case at bar, the prosecution was able to prove beyond reasonable doubt that
accused-appellants engaged in activities that fall within the definition of recruitment and
placement under the Labor Code. The evidence on record shows that they promised overseas
employment to private complainants and required them to prepare the necessary documents
and to pay the placement fee, although they did not have any license to do so. There is illegal
recruitment when one who does not possess the necessary authority or license gives the
impression of having the ability to send a worker abroad.
 NATIONAL WATERWORKS and SEWERAGE AUTHORITY vs. NWSA CONSOLIDATED
UNIONS, ET A

G.R. No. L-18939 August 31, 1964

Undertime of a worker of a worker should not be set-off against the worker in

determining whether the latter has rendered service in excess of eight hours for that day

Facts:

To resolve the issue of the parties, CIR rendered its decision that NWSA is an
agency not performing governmental functions and, therefore, is liable to pay additional
compensation for work on Sundays and legal holidays. the computation followed by NAWASA in
computing overtime compensation is contrary to Commonwealth Act 444; the undertime of a
worker should not be set-off against the worker in determining whether the latter has rendered
service in excess of eight hours for that day; in computing the daily wage of those employed on
daily basis, the additional 25% compensation for Sunday work should be included; the
computation used by the NAWASA for monthly salaried employees to wit, dividing the monthly
basic pay by 30 is erroneous

Issue: WON the CIR erred in its decision

Held:

No. There is merit in the decision of respondent court that the method used by petitioner
in offsetting the overtime with the undertime and at the same time charging said undertime to
the accrued leave of the employee is unfair, for under such method the employee is made to
pay twice for his undertime because his leave is reduced to that extent while he was made to
pay for it with work beyond the regular working hours. The proper method should be to deduct
the undertime from the accrued leave but pay the employee the overtime to which he is entitled.
This method also obviates the irregular schedule that would result if the overtime should be set
off against the undertime for that would place the schedule for working hours dependent on the
employee.
 FARLE P. ALMODIEL, vs. NATIONAL LABOR RELATIONS COMMISSION (FIRST
DIVISION), RAYTHEON PHILS., INC
G.R. No. 100641 June 14, 1993

Article 40 of the Labor Code which requires employment permit refers to non-resident
aliens. The employment permit is required for entry into the country for employment purposes
and is issued after determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for which the alien
is desired.

Facts:

Petitioner Farle P. Almodiel is a certified public accountant who was hired as Cost
Accounting Manager of respondent Raytheon Philippines, Inc. through a reputable placement
firm, John Clements Consultants, Inc. standard cost accounting system was installed and used
at the Raytheon plants and subsidiaries worldwide. It was likewise adopted and installed in the
Philippine operations. As a consequence, the services of a Cost Accounting Manager allegedly
entailed only the submission of periodic reports that would use computerized forms prescribed
and designed by the international head office of the Raytheon Company in California, USA.
Petitioner claims that the functions of his position were absorbed by the Payroll/Mis/Finance
Department under the management of Danny Ang Tan Chai, a resident alien without any
working permit from the Department of Labor and Employment as required by law.

Issue: WON the termination of Almodiel’s employment valid

Held:

Yes. Petitioner's imputation of unlawful discrimination when Raytheon caused corollary

functions appertaining to cost accounting to be absorbed by Danny Ang Tan Chai, a resident
alien without a working permit. Article 40 of the Labor Code which requires employment permit
refers to non-resident aliens. The employment permit is required for entry into the country for
employment purposes and is issued after determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time of application to perform the services
for which the alien is desired. Since Ang Tan Chai is a resident alien, he does not fall within the
ambit of the provision. Ang Tan Chai was promoted to the position during the middle part of
1988 or before the abolition of petitioner's position in early 1989. Besides the fact that Ang Tan
Chai's promotion thereto is a settled matter, it has been consistently held that an objection
founded on the ground that one has better credentials over the appointee is frowned upon so
long as the latter possesses the minimum qualifications for the position. In the case at bar, since
petitioner does not allege that Ang Tan Chai does not qualify for the position, the Court cannot
substitute its discretion and judgment for that which is clearly and exclusively management
prerogative.
 GENERAL MILLING CORPORATION and EARL TIMOTHY CONE vs. HON. RUBEN D.
TORRES, in his capacity as Secretary of Labor and Employment, HON. BIENVENIDO E.
LAGUESMA, in his capacity as Acting Secretary of Labor and Employment, and
BASKETBALL COACHES ASSOCIATION OF THE PHILIPPINES
G.R. No. 93666 April 22, 1991

Under Article 40 of the Labor Code, an employer seeking employment of an alien must
first obtain an employment permit from the Department of Labor.

Facts:
DOLE issued an alien employment permit in favor of Cone, a US citizen, as sports
consultant and assistant coach for General Milling Corporation. Later, the Board of Special
Inquiry of the Commission on Immigration and Deportation approved Cone’s application for a
change of admission status from temporary visitor to pre-arranged employee. A month later,
GMC requested renewal of Cone’s alien employment permit and it be allowed to employ Cone
as full-pledged coach. The Basketball Coaches Association of the Philippines appealed the
issuance of the said permit to the Secretary of DOLE who canceled Cone’s employment permit
because GMC failed to show that there was no person in the Philippines who was competent
and willing to do the services required nor that the hiring of Cone would redound to the national
interest

Issue: WON the Secretary of Labor act with grave abuse of discretion in revoking Cone’s Alien
Employment Permit

Held:

No. GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal
basis at all. Under Article 40 of the Labor Code, an employer seeking employment of an alien
must first obtain an employment permit from the Department of Labor. Petitioner GMC's right to
choose whom to employ is, of course, limited by the statutory requirement of an alien
employment permit. Petitioners will not find solace in the equal protection clause of the
Constitution. As pointed out by the Solicitor-General, no comparison can be made between
petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the country," and
thus, not subject to the provisions of Article 40 of the Labor Code which apply only to "non-
resident aliens." Neither can petitioners validly claim that implementation of respondent
Secretary's decision would amount to an impairment of the obligations of contracts. The
provisions of the Labor Code and its Implementing Rules and Regulations requiring alien
employment permits were in existence long before petitioners entered into their contract of
employment. It is firmly settled that provisions of applicable laws, especially provisions relating
to matters affected with public policy, are deemed written into contracts. Petitioners' contention
that respondent Secretary of Labor should have deferred to the findings of Commission on
Immigration and Deportation as to the necessity of employing petitioner Cone, is, again, bereft
of legal basis. The Labor Code itself specifically empowers respondent Secretary to make a
determination as to the availability of the services of a "person in the Philippines who is
competent, able and willing at the time of application to perform the services for which an alien
is desired." In short, the Department of Labor is the agency vested with jurisdiction to determine
the question of availability of local workers. The constitutional validity of legal provisions
granting such jurisdiction and authority and requiring proof of non-availability of local nationals
able to carry out the duties of the position involved cannot be seriously questioned.
DEE C. CHUAN & SONS, INC. vs. THE COURT OF INDUSTRIAL RELATIONS, CONGRESS
OF LABOR ORGANIZATIONS (CLO), KAISAHAN NG MGA MANGGAGAWA SA KAHOY SA
PILIPINAS and JULIAN LUMANOG AND HIS WORK-CONTRACT LABORERS

G.R. No. L-2216 January 31, 1950

CIR has jurisdiction to determine the number of men to be laid off during off-seasons. By
the same token, the court may specify that a certain proportion of the additional laborers to be
employed should be Filipinos, if such condition, in the court's opinion, "is necessary or
expedient for the purpose of settling disputes or doing justice to the parties."

Facts:

Pending settlement by the CIR of a labor dispute between petitioner company and its
labor union, petitioner requested for authority to hire about 12 more laborers from time to time
and on a temporary basis. CIR granted the request on the condition that the majority of the
laborers be employed should be native. Hence the petition

Issue: WON the order of the CIR restrain the petitioner’s right to hire labor

Held:

No. That the employer's right to hire labor is not absolute has to be admitted. "This
privilege of hiring and firing ad libitum is, of course, being subjected to restraints today." The
power of the legislature to make regulations is subject only to the condition that they should be
affected with public interest and reasonable under the circumstances. The power may be
exercised directly by the law-making body or delegated by appropriate rules to the courts or
administrative agencies. Commonwealth Act No. 103 has precisely vested the Court of
Industrial Relations with authority to intervene in all disputes between employees or strikes
arising from the difference as regards wages, compensation, and other labor conditions which it
may take cognizance of. Thus it has jurisdiction to determine the number of men to be laid off
during off-seasons. By the same token, the court may specify that a certain proportion of the
additional laborers to be employed should be Filipinos, if such condition, in the court's opinion,
"is necessary or expedient for the purpose of settling disputes or doing justice to the parties."
 FELIPE DE LEON, BALDOMERO SALVADOR, MARTINIANO EVANGELISTA, VICENTE
PANLAQUI, CASTOR TUASON, FRANCISCO GONZALO, ENRIQUE PAGCU, CLAUDIO
SICHON, ESTANISLAO SICHON, RUBEN ICBAN, ABONDINO ISIP, LUIS P. ISIP,
DIOSDADO P. GONZALES, MAXIMO PAULE, FAUSTINO DIMATULAC, MATEO BAUTISTA,
WILFREDO AYCARDO, HORACIO OCAMPO, FABIAN MENESES, FLORENTINO GARCIA
and JOSE D. GALANG vs. PAMPANGA SUGAR DEVELOPMENT COMPANY, INC
G.R. No. L-26844 September 30, 1969

For work on Sundays and legal holidays, the employer must pay the employee: (1) his
regular remuneration, or 100%; and (2) an additional sum of at least 25% of the regular
remuneration, which is called the "premium pay." In other words, the pay for Sundays and legal
holidays is 125% of the pay for ordinary days, but only the excess of 25% is premium pay. With
respect to employees paid on a monthly basis, the first 100% (of the 125%), corresponding to
the regular remuneration, may or may not be included in the monthly salary. If it is, then the
employee is entitled to collect only the premium of 25%. If it is not, then the employee has a
right to receive the entire 125%.

Facts:

The respondent Pampanga Sugar Development Company (PASUDECO) operates a sugar

central at San Fernando, Pampanga. The petitioners, 21 all told, were its security guards
required to work eight hours a day, seven days a week seeking payment to them of premium or
differential pay. Upon the finding that the "petitioners were paid their monthly salaries plus 25%
additional compensation for work on Sundays and Holidays as provided for by law and that work
on said days is one of the terms and conditions of their employment as security guards." CIR
Judge dismissed the case. The petitioners' claim, in essence, is that under the authority of
section 4 of Commonwealth Act 444 as amended (Eight-Hour Labor Law), for a Sunday or legal
holiday work of not more than eight hours, each of them is entitled to his monthly salary and his
premium or differential compensation, i.e., his wage for the said Sunday or legal holiday plus at
least 25% thereof.

.Issue: WON the petitioners' monthly salaries already cover the 100% regular remuneration for
Sundays and legal holidays.

HELD:

Yes. From the particular precise statement, "Rate per day plus 25% - P3.95," t follows
that the regular rate per ordinary day is P3.1666, which is 1/30th of the monthly salary of P95.
This means that in computing the daily wage, each of the petitioners divided his monthly salary
by 30, the average number of days in a month, which includes Sundays and legal holidays. This
is an effective admission, or at least demonstrates awareness on the part of the petitioners, that
their monthly salaries covered work not only on ordinary days but also on Sundays and legal
holidays. 3 The allegation, "300 Sundays and holidays multiplied by P3.95 rate per each Sunday
and Holiday — P1,185.00," is correct. However, it must be remembered that of the amount of
P1,185, the sum of P948 had already been paid to De Leon as part of his salary for the five-year
period from January 1, 1946 to December 31, 1950.
 JOSE RIZAL COLLEGE vs. NATIONAL LABOR RELATIONS COMMISSION AND
NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS
G.R. No. L-65482 December 1, 1987

Hourly paid faculty members are not entitled to holiday pay for regular holidays, whether
the same be during the regular semesters of the school year or during semestral, Christmas, or
Holy Week vacations; but are entitled to their regular hourly rate on days declared as special
holidays or for some reason classes are called off or shortened for the hours they are supposed
to have taught, whether extensions of class days be ordered or not; in case of extensions said
faculty members shall likewise be paid their hourly rates should they teach during said
extensions.

Facts:
Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977,
private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the
faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against
the college for said alleged non-payment of holiday pay

Issue: WON the school faculty who according to their contracts are paid per lecture hour are
entitled to unworked holiday pay.

Held:

exempting petitioner from paying hourly paid faculty members their pay for regular
holidays, whether the same be during the regular semesters of the school year or during
semestral, Christmas, or Holy Week vacations; but ordering petitioner to pay said faculty
members their regular hourly rate on days declared as special holidays or for some reason
classes are called off or shortened for the hours they are supposed to have taught, whether
extensions of class days be ordered or not; in case of extensions said faculty members shall
likewise be paid their hourly rates should they teach during said extensions.

Regular holidays specified as such by law are known to both school and faculty
members as no class days;" certainly the latter do not expect payment for said unworked days,
and this was clearly in their minds when they entered into the teaching contracts. It is readily
apparent that the declared purpose of the holiday pay which is the prevention of diminution of
the monthly income of the employees on account of work interruptions is defeated when a
regular class day is cancelled on account of a special public holiday and class hours are held on
another working day to make up for time lost in the school calendar. Otherwise stated, the
faculty member, although forced to take a rest, does not earn what he should earn on that day.
Be it noted that when a special public holiday is declared, the faculty member paid by the hour
is deprived of expected income, and it does not matter that the school calendar is extended in
view of the days or hours lost, for their income that could be earned from other sources is lost
during the extended days. Similarly, when classes are called off or shortened on account of
typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or
not extensions are ordered.
 NITTO ENTERPRISES vs. NATIONAL LABOR RELATIONS COMMISSION and ROBERTO
CAPILI
G.R. No. 114337 September 29, 1995

Apprenticeship needs DOLE’s prior approval, or apprentice becomes regular employee

Facts:

Petitioner hired Capili as an apprentice machinist under an apprenticeship agreement for

six months for a daily wage, which was 75% of the applicable minimum wage. Capili later
resigned and executed a quitclaim and release in favor of the petitioner in consideration of
P1,912.79. three days after, he filed a complaint for illegal dismissal and payment of other
monetary benefits. The Labor Arbiter found the termination valid and dismissed the money
claim. But on appeal, NLRC reversed the decision and directed petitioner to reinstate Capili with
backawages because he was a regular employee who was illegally dismissed.

The petitioner assails the NLRC’s finding that Capili cannot be considered an apprentice
since no apprenticeship program had yet been filed and approved by DOLE.

Issue: WON Capili is considered as a regular employee

Held:

Yes. Petitioner did not comply with the requirements of the law. It is mandated that
apprenticeship agreements entered into by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly approved by the Minister of Labor and
Employment. Prior approval by the Department of Labor and Employment of the proposed
apprenticeship program is, therefore, a condition sine quo non before an apprenticeship
agreement can be validly entered into. The act of filing the proposed apprenticeship program
with the Department of Labor and Employment is a preliminary step towards its final approval
and does not instantaneously give rise to an employer-apprentice relationship. Hence, since the
apprenticeship agreement between petitioner and private respondent has no force and effect in
the absence of a valid apprenticeship program duly approved by the DOLE, private
respondent's assertion that he was hired not as an apprentice but as a delivery boy ("kargador"
or "pahinante") deserves credence.
 FILAMER CHRISTIAN INSTITUTE vs. HONORABLE COURT OF APPEALS, HONORABLE
ENRIQUE P. SUPLICO, in his capacity as Judge of the Regional Trial Court,. Branch XIV,
Roxas City and the late POTENCIANO KAPUNAN, SR., as substituted by his heirs,
namely: LEONA KAPUNAN TIANGCO, CICERO KAPUNAN, JESUS KAPUNAN, SANTIAGO
KAPUNAN, POTENCIANO KAPUNAN, JR., PAZ KAPUNAN PUBLICO, SUSA KAPUNAN
GENUINO and ERLINDA KAPUNAN TESORO
G.R. No. 75112 October 16, 1990

There is no employer-employee relationship between students on the one hand, and

schools, colleges or universities on the other, where students work for the latter in exchange for
the privilege to study free of charge; provided the students are given real opportunity, including
such facilities as may be reasonable, necessary to finish their chosen court under such
arrangement.

Facts:
Kapunan Sr., an 82-year old retired teacher, was struck by a jeepney owned by
petitioner and driven by its alleged employee, Funtecha. Because Kapunan suffered multiple
injuries and was hospitalized, he filed a criminal case against Funtecha alone but reserved his
right to file an independent civil action. Funtecha was found guilty.
Pursuant to his reservation, Kapunan commenced a civil case for damages not only
against Funtecha but also the Institute and its president. The trial court and the CA found the
defendants liable for damages.

Issue: WON the term "employer" as used in Article 2180 is applicable to petitioner Filamer with
reference to Funtecha.

Held:
No. The Civil Code provides Art. 2180. The obligation imposed by article 2176 is
demandable not only for one's own acts or omissions but also for those of persons for whom
one is responsible.
xxx xxx xxx
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not engaged
in any business or industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the persons herein mentioned prove
that they observe all the diligence of a good father of a family to prevent damage.
Filamer cannot be considered as Funtecha's employer. Funtecha belongs to that special
category of students who render service to the school in exchange for free tuition Funtecha
worked for petitioner for two hours daily for five days a week. He was assigned to clean the
school passageways from 4:00 a.m. to 6:00 a.m. with sufficient time to prepare for his 7:30 a.m.
classes. As admitted by Agustin Masa in open court, Funtecha was not included in the company
payroll. Even if it to concede the status of an employee on Funtecha, still the primary
responsibility for his wrongdoing cannot be imputed to petitioner Filamer for the plain reason
that at the time of the accident, it has been satisfactorily shown that Funtecha was not acting
within the scope of his supposed employment. His duty was to sweep the school passages for
two hours every morning before his regular classes. Taking the wheels of the Pinoy jeep from
the authorized driver at 6:30 in the evening and then driving the vehicle in a reckless manner
resulting in multiple injuries to a third person were certainly not within the ambit of his assigned
tasks.
 PEOPLE OF THE PHILIPPINES vs. TAN TIONG MENG alias "TOMMY TAN"
G.R. No. 120835-40 April 10, 1997

Accused-appellant’s acts of accepting placement fees from job applicants and

representing to said applicants that he could get them jobs abroad constitute recruitment and
placement

Facts:
Accused-appellant Tan Tiong Meng alias "Tommy Tan" was charged with Illegal
Recruitment in Large Scale. As his defense, he estified that he is a Singaporean national
married to Estelita Oribiana, a Filipino-Chinese. He added that he works as a sales
representative for Oribiana Laboratory Supplies, a company owned by his brother-in-law which
sells laboratory equipment to various schools in Cavite. Tan alleged that Jose Percival Borja
was introduced to him by a certain Malou Lorenzo at the office of their laboratory supplies in
Sta. Cruz, Manila Lorenzo allegedly told him that Borja needed his help in processing job
applications for abroad. When he talked to Borja, the latter told him that he could help in
convincing applicants that they could work in Taiwan. Borja offered him a P1,000.00
commission from the amount paid by each applicant. Tan admitted having received money from
all the complainants but he said that all the money was turned over to Borja after deducting his
commission. Tan likewise admitted that he and his wife are respondents in about seventy (70)
cases of estafa and illegal recruitment but that it was Lorenzo who was the main recruiter. He
maintains that he merely received commissions from the transactions and that the deceit was
employed not by him but by Borja who introduced him as a job recruiter.

Issue: WON Tan is guilty of illegal recruitment in large scale

Held:
Yes. The Labor Code defines recruitment and placement thus:
(A)ny act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not; Provided,
that any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment
and placement.
It is clear that accused-appellant's acts of accepting placement fees from job applicants and
representing to said applicants that he could get them jobs in Taiwan constitute recruitment and
placement under the above provision of the Labor Code.
The Labor Code prohibits any person or entity, not authorized by the POEA, from engaging in
recruitment and placement activities thus:
(a) Any recruitment activities, including the prohibited practices enumerated
under Article 34 of this Code, to be undertaken by non-licensees or non-holders
of authority shall be deemed illegal and punishable under Article 39 of this Code .
(b) Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group
of three (3) or more persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme defined
under the first paragraph hereof. Illegal recruitment is deemed committed in large
scale if committed against three (3) or more persons individually or as a group. 14
The POEA having certified that accused-appellant is not authorized to recruit workers for
overseas employment, it is clear that the offense committed against the six (6) complainants in
this case is illegal recruitment in large scale punishable under Article 39 (a) of the Labor Code
with life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00).
 PEOPLE vs. ARABIA AND TOMAS
G.R. No. 138431-36. September 12, 2001

Accused-appellant’s acts of accepting placement fees from job applicants and

representing to said applicants that he could get them jobs abroad constitute recruitment and
placement

Facts:
Accused-appellants were found guilty of illegal recruitment in large scale. accused
Arabia convinced the complaining witnesses to apply for employment in Taiwan by making
representations that they will be getting a salary of P20,000.00 a month, and upon arrival in
Taiwan, they will be paid their two months’ salary in advance therefore, accused Arabia and
Tomas were engaged in recruiting workers for employment abroad without authority or license
to do so. The only defense of the accused Arabia and Tomas is denial. They claim that, like the
complainants, they too, accused Arabia and Tomas, were job applicants and their recruiter was
one Rebecca de Jesus; that they were likewise victimized by Rebecca de Jesus. As a matter of
fact, according to the accused, like them, complainants also filed a case against said illegal
recruiter, Rebecca de Jesus.

Issue: WON accused-appellants are guilty of illegal recruitment

Held:
Yes. There is no doubt as to accused-appellants guilt for all the essential elements of the
crime of Illegal Recruitment in Large Scale have been established beyond reasonable
doubt. Accused-appellants recruited at least four persons, giving them the impression that they
had the capability to send them to Taiwan for employment. They collected various amounts
allegedly for recruitment and placement fees without license or authority to do so. It is settled
that the fact that an accused in an illegal recruitment case did not issue the receipts for amounts
received from the complainants has no bearing on his culpability so long as complainants show
through their respective testimonies and affidavits that the accused was involved in the
prohibited recruitment. The complainants were positive and categorical in their testimonies that
they personally met accused-appellants and that the latter asked from them sums of money in
exchange for the promised employment overseas. Complainants had no motive to testify falsely
against accused-appellants. Needless to state, against the positive and categorical statements
of the complainants, the mere denials of accused-appellants and their pinpointing of the crime to
one Rebecca de Jesus who was never produced in court cannot prevail. As the Court held in
another illegal recruitment case, with the accused-appellants failure to present the person who
was allegedly responsible for the recruitment of the complainants, she risked the adverse
inference and legal presumption that evidence suppressed would be adverse if produced
 PEOPLE vs VERANO

G.R. No. 90017-18 March 1, 1994

Illegal Recruitment. — (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-
holders of authority shall be deemed illegal and punishable under Article 39 of this Code.
The Ministry of Labor and Employment or any law enforcement officer may initiate
complaints under this Article.

(b) Illegal recruitment when committed by a syndicate or in large scale shall be

considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.

Facts:

Verona persuaded private complainants to accept overseas employment as salesmen in

Bahrain, and in consideration thereof, they are required to pay some amount of money to cover
the expenses for the processing of their travel papers, i.e., passports, visas and the cost of their
plane tickets, medical examination and recruitment fees. They were issued separate receipts by
accused-appellant. 5To further convince them of her capacity to send them abroad, accused-
appellant even signed a contract of employment with her as employer and Arturo as employee.
On the supposed date of their departure, Verano did not show up. It happened not only once but
three times so the private complainants decided to file a complaint against Verano. As a
defense, she argues that she never represented herself as having the capacity to contract
workers for overseas employment; that she merely introduced private complainants Jose, Arturo
and Aldonso to a certain Juliet Majestrado who was the one who claimed to have such capacity

Issue: WON Verano is guilty of illegal recruitment

Held:

Yes. Appellant's argument is obviously without merit in the light of the well-settled
doctrine that findings of fact made by the trial court are final and conclusive and cannot be
reviewed on appeal. Except for a few recognized instances, which do not apply in the case at
bench, such findings are bindings and will not be reviewed by us for this Court is not a trier of
facts. The issues raised by appellant are purely and undisputably factual, as she herself admits.
Considering that none of the exceptions apply, as aforesaid, we would not be justified in
reversing the judgment of conviction. Hence, the appeal must fail.
 PEOPLE vs. ESPANOL

Illegal recruitment includes any of the following activities that would constitute
recruitment and placement: canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, including referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. Article 13 (b) further provides that any
person or entity which, in any manner, offers or promises for a fee employment to two (2) or
more persons shall be deemed engaged in recruitment and placement

Facts:
Accused canvassed, enlisted, contracted and promised employment to 14 persons,
demanding some amount of money as recruitment fees, without authority or license from POEA.
Accused introduced himself as one who had rich and influential relatives in USA. On several
occasions, complainants talked to the accused, who kept promising that he could send them
abroad. When the complainants sensed that they were deceived, they demanded return of their
money, but the accused failed and started hiding. As a defense, accused argued that he did not
know the applicants except one, that he had no brother or sister in USA and that the house
where he celebrated his birthday was owned by one de la Pasion, who shouldered all the
expenses.

Issue: WON the accused appellant guilty of illegal recruitment

Held:
Yes. The court found accused guilty beyond reasonable doubt of the crime charged and
sentenced him to suffer 8 years of imprisonment and to pay a fine of 50,000php. The accused is
likewise ordered to reimburse the amount of 21,500php to the complainants.
 PEOPLE vs. ROXAS

Any person applying with a private fee-charging employment agency for employment
assistance shall not be charged any fee until he has obtained employment through its efforts or
has actually commenced employment. Such fee shall be always covered with the appropriate
receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a schedule of
allowable fees.

Facts:
Accused, doing business under the name and style of F.C Roxas Construction, was a
licensed private recruitment entity, a service contractor. As a service contractor, it is not allowed
to charge, directly or indirectly, any fee from the workers except the authorized documentation
fee of 1,500php. During the period of January 1984 to July 1986, F.C construction Co.
demanded and received from its applicants 22 various sums of money ranging from 1,500-8,500
php in excess of the limits set forth by law. The complainants, furthermore, were not able to
work abroad, were not issued any travel documents, and despite efforts, were not refunded the
money said to and received by the accused. Roxas did not deny the receipts covering the
different sums of money paid by private complainants. He reasoned out that the amounts paid
to and received by him were for passporting and ticketing of the complainants

Issue: WON Roxas is guilty of illegal recruitment

Held:
Yes. The court found the excuse of accused to be highly unjustified and definitely
unconvincing. Besides the accused has jumped bail, despite the issuance of warrant of arrest,
he has not been apprehended. As a matter of fact, he was tried in absentia. The fundamental
rule that the plight of the accused is consistent with his guilt was made applicable in this case.
The accused was further ordered to refund to the herein private complainants the amounts paid
by each of them plus legal interest of 12% per annum from the filing of this case until the above
amounts are paid in full, and also to pay the cost of this suit.
 PEOPLE vs REMULLO
G.R. Nos. 124443-46. June 6, 2002

For a charge of illegal recruitment to prosper, the following elements must concur: (1)
the accused was engaged in recruitment activity defined under Article 13 (b), or any prohibited
practice under Article 34 of the Labor Code; (2) he or she lacks the requisite license or authority
to lawfully engage in the recruitment and placement of workers; and (3) he or she committed
such acts against three or more persons, individually or as a group.

Facts:
Complainants testified that Remullo told them she was recruiting factory workers for
Malaysia. Appellant told them to fill up application forms and go to the office of Jamilla and Co.,
the recruitment agency where appellant worked. Appellant also required each applicant to
undergo a medical examination. Appellant asked them to pay, as in fact she received an
amount, as placement fee. On the day of their departure, an immigration officer told them that
they lacked a requirement imposed by POEA. They were not able to leave because their visas
were for tourist only. They inquired from the company regarding their application papers. In
response, the company denied any knowledge of such papers and that Remullo did not submit
any document to them. The company certified that Remullo was not authorized to receive
payments on behalf of Jamila.

Issue: WON Remullo is guilty of illegal recruitment in large scale.

Held:
Yes. For a charge of illegal recruitment to prosper, the following elements must
concur: (1) the accused was engaged in recruitment activity defined under Article 13 (b), or any
prohibited practice under Article 34 of the Labor Code; (2) he or she lacks the requisite license
or authority to lawfully engage in the recruitment and placement of workers; and (3) he or she
committed such acts against three or more persons, individually or as a group. The court is
convinced that private complainants, the main witnesses for the prosecution, were enticed by
appellant to apply for jobs abroad. However, she acted without license or lawful authority to
conduct recruitment of workers for overseas placement. The POEAs licensing branch issued a
certification stating that appellant, in her personal capacity, was not authorized to engage in
recruitment activities. The general manager of the placement agency where appellant used to
work denied that the scope of appellants work included recruiting workers and receiving
placement fees.
 PEOPLE vs ANGELES
G.R. No. 132376. April 11, 2002

To prove illegal recruitment, it must be shown that the accused-appellant gave

complainants the distinct impression that he had the power or ability to send complainants
abroad for work such that the latter were convinced to part with their money in order to be
employed. To be engaged in the practice of recruitment and placement, it is plain that there
must at least be a promise or offer of an employment from the person posing as a recruiter
whether locally or abroad.

Facts:
Samina Angeles was charged of the crime of illegal recruitments. Complainants testified
that the accused-appellant presented herself that she was able to send them abroad for work.
As a defense, Angeles contended that she never represented to the complainants that she
could provide them work abroad. She pointed out that none of the complainants testified on
what kind of jobs were promised to them, how much they would earn, the length of their
employment and even the names of their employers, which are basic subjects a prospective
employee would first determine.

Issue: WON Angeles is guilty of illegal recruitment.

Held:
No. To prove illegal recruitment, it must be shown that the accused-appellant gave
complainants the distinct impression that he had the power or ability to send complainants
abroad for work such that the latter were convinced to part with their money in order to be
employed. To be engaged in the practice of recruitment and placement, it is plain that there
must at least be a promise or offer of an employment from the person posing as a recruiter
whether locally or abroad. In the case at bar, accused-appellant alleges that she never
promised nor offered any job to the complainants. A perusal of the records reveals that not one
of the complainants testified that accused-appellant lured them to part with their hard-earned
money with promises of jobs abroad. On the contrary, they were all consistent in saying that
their relatives abroad were the ones who contacted them and urged them to meet accused-
appellant who would assist them in processing their travel documents. Accused-appellant did
not have to make promises of employment abroad as these were already done by complainants
relatives. There is no testimony that accused-appellant offered complainants jobs
abroad. Hence, accused-appellant Samina Angeles cannot be lawfully convicted of illegal
recruitment.
 SAN MIGUEL CORPORATION vs. THE HONORABLE COURT OF APPEALS-FORMER
THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE M. ESPAOL, JR., Hon.
CRESENCIANO B. TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M. MACARAYA
G.R. No. 146775. January 30, 2002

All private corporations, offices, agencies, and entities or establishments operating within
the designated Muslim provinces and cities are required to observe Muslim holidays, both
Muslim and Christians working within the Muslim areas may not report for work on the days
designated by law as Muslim holidays.

Facts:
Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine
inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the
course of the inspection, it was discovered that there was underpayment by SMC of regular
Muslim holiday pay to its employees. DOLE sent a copy of the inspection result to SMC and it
was received by and explained to its personnel officer Elena dela Puerta. SMC failed to submit
proof that it was paying regular Muslim holiday pay to its employees. Hence, Alan M. Macaraya,
Director IV of DOLE Iligan District Office issued a compliance order directing SMC to consider
Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees
holiday pay within thirty (30) days from the receipt of the order.

Issue: WON public respondents committed grave abuse of discretion when they granted
holiday pay to non-muslim employees of the petitioner

Held:
No. Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that
(t)he provisions of this Code shall be applicable only to Muslims x x x. However, there should be
no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim
holidays. The Court of Appeals did not err in sustaining Undersecretary Espaol who stated:

Assuming arguendo that the respondents position is correct, then by the same token, Muslims
throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by
law as regular holidays. We must remind the respondent-appellant that wages and other
emoluments granted by law to the working man are determined on the basis of the criteria laid
down by laws and certainly not on the basis of the workers faith or religion.

At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that x x x nothing herein
shall be construed to operate to the prejudice of a non-Muslim.
In addition, the 1999 Handbook on Workers Statutory Benefits, approved by then DOLE
Secretary Bienvenido E. Laguesma on 14 December 1999 categorically stated:

Considering that all private corporations, offices, agencies, and entities or establishments
operating within the designated Muslim provinces and cities are required to observe Muslim
holidays, both Muslim and Christians working within the Muslim areas may not report for
work on the days designated by law as Muslim holidays.
 INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION (IBAAEU) vs. HON.
AMADO G. INCIONG, Deputy Minister, Ministry of Labor and INSULAR BANK OF ASIA
AND AMERICA,
G.R. No. L-52415 October 23, 1984

Right to holiday pay and other premiums covers not only daily wage workers but also
monthly wage earners
Facts:
Petitioner filed a complaint against the respondent bank for the payment of holiday pay
before the then Department of Labor, National Labor Relations Commission, Regional Office
No. IV in Manila. Conciliation having failed, and upon the request of both parties, the case was
certified for arbitration. Labor Arbiter Ricarte T. Soriano rendered a decision in the above-
entitled case, granting petitioner's complaint for payment of holiday pay.
The Department of Labor, in relation to the passage of Presidential Decree No. 850 (now
Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with
pay. The controversial section thereof reads:
Sec. 2. Status of employees paid by the month. — Employees who are uniformly
paid by the month, irrespective of the number of working days therein, with a
salary of not less than the statutory or established minimum wage shall be
presumed to be paid for all days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the statutory
minimum wage multiplied by 365 days divided by twelve"
Respondent bank, by reason of the ruling laid down by the aforecited rule implementing
Article 94 of the Labor Code and by Policy Instruction No. 9, stopped the payment of holiday
pay to an its employees.

Issue: WON PD 850 was intended only for daily wage workers.

Held:
No. Article 94 of the Labor Code, as amended by P.D. 850, provides:
Art. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily
wage during regular holidays, except in retail and service establishments
regularly employing less than ten (10) workers. ...
The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out
under Article 82 thereof which reads:
Art. 82. Coverage. — The provision of this Title shall apply to employees in all
establishments and undertakings, whether for profit or not, but not to government
employees, managerial employees, field personnel members of the family of the
employer who are dependent on him for support domestic helpers, persons in the
personal service of another, and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.
From the above-cited provisions, it is clear that monthly paid employees are not excluded from
the benefits of holiday pay. It is elementary in the rules of statutory construction that when the
language of the law is clear and unequivocal the law must be taken to mean exactly what it
says. In the case at bar, the provisions of the Labor Code on the entitlement to the benefits of
holiday pay are clear and explicit - it provides for both the coverage of and exclusion from the
benefits. In Policy Instruction No. 9, the then Secretary of Labor went as far as to categorically
state that the benefit is principally intended for daily paid employees, when the law clearly states
that every worker shall be paid their regular holiday pay. This is a flagrant violation of the
mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the
implementation and interpretation of the provisions of this Code, including its implementing rules
and regulations, shall be resolved in favor of labor." Moreover, it shall always be presumed that
the legislature intended to enact a valid and permanent statute which would have the most
beneficial effect that its language permits
 CHARTERED BANK EMPLOYEES ASSOCIATION vs. HON. BLAS F. OPLE, in his capacity as
the Incumbent Secretaryof Labor, and THE CHARTERED BANK
.G.R. No. L-44717 August 28, 1985

Right to holiday pay and other premiums covers not only daily wage workers but also
monthly wage earners

Facts:
On May 20, 1975, the Chartered Bank Employees Association, in representation of its monthly
paid employees/members, instituted a complaint with the Regional Office No. IV, Department of
Labor, now Ministry of Labor and Employment (MOLE) against Chartered Bank, for
the payment of ten (10) unworked legal holidays, as well as for
premium and overtime differentials for worked legal holidays fromNovember 1, 1974. The
Minister of Labor dismissed the Chartered Bank Employees Association’s claim for lack of merit
basing its decision on Section 2, Rule IV, Book Ill of the Integrated Rules and Policy Instruction
No. 9, which respectively provide:

Sec. 2. Status of employees paid by the month. Employees who are uniformly paid
by the month, irrespective of the number of working days therein, with a salary of not
less than the statutory or established minimum wage shall be presumed to be paid for all
days in the month whether worked or not.
POLICY INSTRUCTION NO. 9
TO: All Regional Directors
SUBJECT: PAID LEGAL HOLIDAYS
The rules implementing PD 850 have clarified the policy in the implementation of the ten (10)
paid legal holidays. Before PD 850, the number of working days a year in a firm was considered
important in determining entitlement to the benefit. Thus, where an employee was working for at
least 313 days, he was considered definitely already paid. If he was working for less than 313,
there was no certainty whether the ten (10) paid legal holidays were already paid to him or not.
The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily
employees. In the case of monthly, only those whose monthly salary did not yet include
payment for the ten (10) paid legal holidays are entitled to the benefit.
Under the rules implementing PD 850, this policy has been fully clarified to eliminate
controversies on the entitlement of monthly paid employees. The new determining rule is this: 'If
the monthly paid employee is receiving not less than P240, the maximum monthly minimum
wage, and his monthly pay is uniform from January to December, he is presumed to be already
paid the ten (10) paid legal holidays. However, if deductions are made from his monthly salary
on account of holidays in months where they occur, then he is still entitled to the ten (10) paid
legal holidays.
These new interpretations must be uniformly and consistently upheld.
This issuance shall take effect immediately.

Issue: WON the Secretary of Labor erred and acted contrary

to law in promulgating Sec. 2, Rule IV, Book III of the Integrated
Rules and Policy Instruction No. 9.

Held:
 Yes. The Secretary (Minister) of Labor had exceeded his statutory authority granted by
Article 5 of the Labor Code authorizing him to promulgate the necessary implementing rules
and regulations. While it is true that the Minister has the authority in the performance of his duty
to promulgate rules and regulations to implement, construe and clarify the Labor Code, such
power is limited by provisions of the statute sought to be implemented, construed or clarified.
 CEZAR ODANGO in his behalf and in behalf of 32 complainants vs. NATIONAL LABOR
RELATIONS COMMISSION and ANTIQUE ELECTRIC COOPERATIVE, INC
G.R. No. 147420 June 10, 2004

The right to be paid for un-worked days is generally limited to the ten legal holidays in a
year.

Facts:

Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday
to Friday and half of Saturday. After a routine inspection, the Regional Branch of the
Department of Labor and Employment ("DOLE") found ANTECO liable for underpayment of the
monthly salaries of its employees. On 10 September 1989, the DOLE directed ANTECO to pay
its employees wage differentials amounting to P1,427,412.75. ANTECO failed to pay. Thus, 33
monthly paid employees filed a complaint with the NLRC Regional Branch VI, Iloilo City, praying
for payment of wage differentials, damages and attorney’s fees. Labor Arbiter Rodolfo G. Lagoc
("Labor Arbiter") heard the consolidated complaints. On 29 November 1996, the Labor Arbiter
rendered a Decision in favor of petitioners granting them wage differentials amounting
to P1,017,507.73 and attorney’s fees of 10%. Florentino Tongson, whose case the Labor Arbiter
dismissed, was the sole exception.

Issue: WON the petitioners are entitled to their money claims

Held:

No. he right to be paid for un-worked days is generally limited to the ten legal holidays in
a year.15 Petitioners’ claim is based on a mistaken notion that Section 2, Rule IV of Book III
gave rise to a right to be paid for un-worked days beyond the ten legal holidays. In effect,
petitioners demand that ANTECO should pay them on Sundays, the un-worked half of
Saturdays and other days that they do not work at all. Petitioners’ line of reasoning is not only a
violation of the "no work, no pay" principle, it also gives rise to an invidious classification, a
violation of the equal protection clause. Sustaining petitioners’ argument will make monthly-paid
employees a privileged class who are paid even if they do not work.

The use of a divisor less than 365 days cannot make ANTECO automatically liable for
underpayment. The facts show that petitioners are required to work only from Monday to Friday
and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365
days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287
days means that ANTECO’s workers are deprived of their holiday pay for some or all of the ten
legal holidays. The 304 days divisor used by ANTECO is clearly above the minimum of 287
days.
 Union of Filipro Employees vs Benigno Vivar Jr., NLRC and Nestle Philippnes

G.R No. 79255 January 20, 1992

Field Personnel whose time and performance is unsupervised by the employer is not
entitled to Holiday pay.

Facts:

Respondent Filed with the NLRC a petition for declaratory relief seeking a ruling on its
rights and obligations respecting claims of its monthly paid employees for holiday pay. The
petitioner insists that respondent's sales personnel are not field personnel under Article 82 of
the Labor Code. The respondent company controverts this assertion. It is undisputed that these
sales personnel start their field work at 8:00 a.m. after having reported to the office and come
back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based. The petitioner maintains
that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales personnel's working
hours which can be determined with reasonable certainty.

Issue: WON Nestle’s sales personnel are entitled to holiday pay

Held:

No. The law requires that the actual hours of work in the field be reasonably ascertained.
The company has no way of determining whether or not these sales personnel, even if they
report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m, really spend
the hours in between in actual field work. Moreover, the requirement that "actual hours of work
in the field cannot be determined with reasonable certainty" must be read in conjunction with
Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

xxx xxx xxx

(e) Field personnel and other employees whose time and performance is
unsupervised by the employer . . .

The Supervisor of the day schedule adverted to by the petitioner does not in the least signify
that these sales personnel's time and performance are supervised. The purpose of this
schedule is merely to ensure that the sales personnel are out of the office not later than 8:00
a.m. and are back in the office not earlier than 4:00 p.m.
WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION vs. CRESENCIANO
B. TRAJANO, Under-Secretary of Labor and Employment, ELMER ABADILLA, and 34
others
G.R. No. 114698 July 3, 1995
There is no provision of law requiring any employer to make such adjustments in the
monthly salary rate set by him to take account of legal holidays falling on Sundays in a given
year, or, contrary to the legal provisions bearing on the point, otherwise to reckon a year at
more than 365 days.

Facts:

A routine inspection conducted by a Labor Enforcement Officer f the Wellington Flour

Mills, an establishment owned and operated by petitioner Wellington Investment and
Manufacturing Corporation (hereafter, simply Wellington). The officer thereafter drew up a
report, a copy of which was "explained to and received by" Wellington's personnel manager, in
which he set forth his finding of "(n)on-payment of regular holidays falling on a Sunday for
monthly-paid employees. Wellington sought reconsideration of the Labor Inspector's report, by
letter dated August 10, 1991. It argued that "the monthly salary of the company's monthly-
salaried employees already includes holiday pay for all regular holidays . . . (and hence) there is
no legal basis for the finding of alleged non-payment of regular holidays falling on a Sunday."
The Regional Director who, in an Order issued on July 28, 1992, ruled that "when a regular
holiday falls on a Sunday, an extra or additional working day is created and the employer has
the obligation to pay the employees for the extra day except the last Sunday of August since the
payment for the said holiday is already included in the 314 factor," and accordingly directed
Wellington to pay its employees compensation corresponding to four (4) extra working days.

Issue: WON a monthly-paid employee, receiving a fixed monthly compensation, is entitled to an

additional pay aside from his usual holiday pay, whenever a regular holiday falls on a Sunday.

Held:

No. There is no provision of law requiring any employer to make such adjustments in the
monthly salary rate set by him to take account of legal holidays falling on Sundays in a given
year, or, contrary to the legal provisions bearing on the point, otherwise to reckon a year at
more than 365 days. As earlier mentioned, what the law requires of employers opting to pay by
the month is to assure that "the monthly minimum wage shall not be less than the statutory
minimum wage multiplied by 365 days divided by twelve," 17 and to pay that salary "for all days
in the month whether worked or not," and "irrespective of the number of working days
therein." 18 That salary is due and payable regardless of the declaration of any special holiday in
the entire country or a particular place therein, or any fortuitous cause precluding work on any
particular day or days (such as transportation strikes, riots, or typhoons or other natural
calamities), or cause not imputable to the worker. And as also earlier pointed out, the legal
provisions governing monthly compensation are evidently intended precisely to avoid re-
computation and alterations in salary on account of the contingencies just mentioned, which, by
the way, are routinely made between employer and employees when the wages are paid on
daily basis.
 JOSE RIZAL COLLEGE vs. NATIONAL LABOR RELATIONS COMMISSION AND
NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS
G.R. No. L-65482 December 1, 1987

Hourly paid faculty members are not entitled to holiday pay for regular holidays, whether
the same be during the regular semesters of the school year or during semestral, Christmas, or
Holy Week vacations; but are entitled to their regular hourly rate on days declared as special
holidays or for some reason classes are called off or shortened for the hours they are supposed
to have taught, whether extensions of class days be ordered or not; in case of extensions said
faculty members shall likewise be paid their hourly rates should they teach during said
extensions.

Facts:
Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977,
private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the
faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against
the college for said alleged non-payment of holiday pay

Issue: WON the school faculty who according to their contracts are paid per lecture hour are
entitled to unworked holiday pay.

Held:

Exempting petitioner from paying hourly paid faculty members their pay for regular
holidays, whether the same be during the regular semesters of the school year or during
semestral, Christmas, or Holy Week vacations; but ordering petitioner to pay said faculty
members their regular hourly rate on days declared as special holidays or for some reason
classes are called off or shortened for the hours they are supposed to have taught, whether
extensions of class days be ordered or not; in case of extensions said faculty members shall
likewise be paid their hourly rates should they teach during said extensions.

Regular holidays specified as such by law are known to both school and faculty
members as no class days;" certainly the latter do not expect payment for said unworked days,
and this was clearly in their minds when they entered into the teaching contracts. It is readily
apparent that the declared purpose of the holiday pay which is the prevention of diminution of
the monthly income of the employees on account of work interruptions is defeated when a
regular class day is cancelled on account of a special public holiday and class hours are held on
another working day to make up for time lost in the school calendar. Otherwise stated, the
faculty member, although forced to take a rest, does not earn what he should earn on that day.
Be it noted that when a special public holiday is declared, the faculty member paid by the hour
is deprived of expected income, and it does not matter that the school calendar is extended in
view of the days or hours lost, for their income that could be earned from other sources is lost
during the extended days. Similarly, when classes are called off or shortened on account of
typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or
not extensions are ordered.