LABOR

August 2, 2013 3. Domestic  Article 141 (Labor Code)

Coverage. - This Chapter shall apply to all persons rendering services in households for compensation. ―Domestic or household service‖ shall mean service in the employers home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employers household, including services of family drivers.  Article 151 (Labor Code)

Employment certification. – Upon the severance of the household service relation, the employer shall give the househelper a written statement of the nature and duration of the service and his or her efficiency and conduct as househelper.  Book III, Rule XIII of the Omnibus Implementing Rules: RULE XIII Employment of Househelpers SECTION 1. General statement on coverage. — (a) The provisions of this Rule shall apply to all househelpers whether employed on full or part-time basis. (b) The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family. SECTION 2. Method of payment not determinant. — The provisions of this Rule shall apply irrespective of the method of payment of wages agreed upon by the employer and househelper, whether it be hourly, daily, weekly, or monthly, or by piece or output basis. SECTION 3. Children of househelpers. — The children and relatives of a househelper who live under the employer's roof and who share the accommodations provided for the househelpers by the employer shall not be deemed as househelpers if they are not otherwise engaged as such and are not required to perform any substantial household work. SECTION 4. Employment contract. — The initial contract for household service shall not last for more than two (2) years. However, such contract may be renewed from year to year.cralaw SECTION 5. Minimum monthly wage. — The minimum compensation of househelpers shall not be less than the following rates: (a) Sixty pesos (P60.00) a month for those employed in the cities of Manila, Quezon, Pasay and Caloocan, and in the municipalities of Makati, San Juan, Mandaluyong,

Muntinlupa, Navotas, Malabon, Parañaque, Las Piñas, Pasig and Marikina, in the Province of Rizal. (b) Forty-five pesos (P45.00) a month for those employed in other chartered cities and first class municipalities; and (c) Thirty pesos (P30.00) a month for those in other municipalities. SECTION 6. Equivalent daily rate. — The equivalent minimum daily wage rate of househelpers shall be determined by dividing the applicable minimum monthly rate by thirty (30) days. SECTION 7. Payment by results. — Where the method of payment of wages agreed upon by the employer and the househelper is by piece or output basis, the piece or output rates shall be such as will assure the househelper of the minimum monthly or the equivalent daily rate as provided in this issuance. SECTION 8. Minimum cash wage. — The minimum wage rates prescribed under this Rule shall be basic cash wages which shall be paid to the househelpers in addition to lodging, food and medical attendance. SECTION 9. Time and manner of payment. — Wages shall be paid directly to the househelper to whom they are due at least once a month. No deductions therefrom shall be made by the employer unless authorized by the househelper himself or by existing laws. SECTION 10. Assignment to non-household work. — No househelper shall be assigned to work in a commercial, industrial or agricultural enterprise at a wage or salary rate lower than that provided for agricultural and non-agricultural workers. SECTION 11. Opportunity for education. — If the househelper is under the age of eighteen (18) years, the employer shall give him or her an opportunity for at least elementary education. The cost of such education shall be part of the househelper's compensation, unless there is a stipulation to the contrary. SECTION 12. Treatment of househelpers. — The employer shall treat the househelper in a just and humane manner. In no case shall physical violence be inflicted upon the househelper. SECTION 13. Board, lodging and medical attendance. — The employer shall furnish the househelper free suitable and sanitary living quarters as well as adequate food and medical attendance. SECTION 14. Indemnity for unjust termination of service. — If the period for household service is fixed, neither the employer nor the househelper may terminate the contract before the expiration of the term, except for a just cause. If the househelper is unjustly dismissed, he or she shall be paid the compensation already earned plus that for fifteen (15) days by way of indemnity. If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him or her not exceeding fifteen (15) days. SECTION 15. Employment certification. — Upon the severance of the household service relationship, the househelper may demand from the employer a written statement of the nature and duration of the service and his or her efficiency and conduct as househelper. SECTION 16. Funeral expenses. — In case of death of the househelper, the employer shall bear the funeral expenses commensurate to the standards of life of the deceased.

SECTION 17. Disposition of the househelper's body. — Unless so desired by the househelper or by his or her guardian with court approval, the transfer or use of the body of the deceased househelper for purposes other than burial is prohibited. When so authorized by the househelper, the transfer, use and disposition of the body shall be in accordance with the provisions of Republic Act No. 349.cralaw SECTION 18. Employment records. — The employer may keep such records as he may deem necessary to reflect the actual terms and conditions of employment of his househelper which the latter shall authenticate by signature or thumbmark upon request of the employer. SECTION 19. Prohibited reduction of pay. — When the compensation of the househelper before the promulgation of these regulations is higher than that prescribed in the Code and in this issuance, the same shall not be reduced or diminished by the employer on or after said date. SECTION 20. Relation to other laws and agreements. — Nothing in this Rule shall deprive a househelper of the right to seek higher wages, shorter working hours and better working conditions than those prescribed herein, nor justify an employer in reducing any benefit or privilege granted to the househelper under existing laws, agreements or voluntary employer practices with terms more favorable to the househelpers than those prescribed in this Rule. 4. Homeworkers  Article 153 (Labor Code)

Regulation of industrial homeworkers. – The employment of industrial homeworkers and field personnel shall be regulated by the government through the appropriate regulations issued by the Secretary of Labor and Employment to ensure the general welfare and protection of homeworkers and field personnel and the industries employing them.  Article 155 (Labor Code)

Distribution of homework. – For purposes of this Chapter, the ―employer‖ of homeworkers includes any person, natural or artificial who, for his account or benefit, or on behalf of any person residing outside the country, directly or indirectly, or through an employee, agent contractor, sub-contractor or any other person: (1) Delivers, or causes to be delivered, any goods, articles or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions; or (2) Sells any goods, articles or materials to be processed or fabricated in or about a home and then rebuys them after such processing or fabrication, either by himself or through some other person.



Book III, Rule XIV of the Omnibus Implementing Rules

RULE XIV Employment of Homeworkers SECTION 1. General statement on coverage. — This Rule shall apply to any homeworker who performs in or about his home any processing of goods or materials, in whole or in part, which have been furnished directly or indirectly by an employer and thereafter to be returned to the latter. SECTION 2. Definitions. — As used in this Rule, the following terms shall have the meanings indicated hereunder: (a) "Home" means any room, house, apartment, or other premises used regularly, in whole or in part, as a dwelling place, except those situated within the premises or compound of an employer, contractor, and the work performed therein is under the active or personal supervision by, or for, the latter. (b) "Employer" means any natural or artificial person who, for his own account or benefit, or on behalf of any person residing outside the Philippines, directly or indirectly, or through any employee, agent, contractor, sub-contractor; or any other person: (1) Delivers or causes to be delivered any goods or articles to be processed in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his direction; or (2) Sells any goods or articles for the purpose of having such goods or articles processed in or about a home and then repurchases them himself or through another after such processing. (c) "Contractor" or "sub-contractor" means any person who, for the account or benefit of an employer, delivers or caused to be delivered to a homeworker goods or articles to be processed in or about his home and thereafter to be returned, disposed of or distributed in accordance with the direction of the employer. (d) "Processing" means manufacturing, fabricating, finishing, repairing, altering, packing, wrapping or handling any material. SECTION 3. Payment for work. — (a) Immediately upon receipt of the finished goods or articles, the employer shall pay the homeworker or the contractor or sub-contractor, as the case may be, for the work performed; Provided, However, that where payment is made to a contractor or subcontractor, the homeworker shall be paid within the week after the contractor or sub-contractor has collected the goods or articles from the homeworkers. (b) The Secretary of Labor and Employment shall from time to time establish the standard minimum piece or output rate in appropriate orders for the particular work or processing to be performed by the homeworkers.

SECTION 4. Deductions. — No employee, contractor, or sub-contractor shall make any deduction from the homeworker's earnings for the value of materials which have been lost, destroyed, soiled or otherwise damaged unless the following conditions are met: (a) The homeworker concerned is clearly shown to be responsible for the loss or damage; (b) The employee is given reasonable opportunity to show cause why deductions should not be made; (c) The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damages; and (d) The deduction is made at such rate that the amount deducted does not exceed 20% of the homeworker's earnings in a week. SECTION 5. Conditions for payment of work. — (a) The employer may require the homeworker to re-do work which has been improperly executed without having to pay the stipulated rate more than once. (b) An employer, contractor, or sub-contractor need not pay the homeworker for any work which has been done on goods and articles which have been returned for reasons attributable to the fault of the homeworker. SECTION 6. Disagreement between homeworkers and employer. — In cases of disagreement between the homeworker and the employer, contractor or sub-contractor on matters falling under Section 4 (a), 5 and 6 of this Rule, either party may refer the case to the Regional Office having jurisdiction over the homeworker. The Regional Office shall decide the case within ten (10) working days from receipt of the case. Its decision shall be final and unappealable. SECTION 7. Liability of employer and contractor. — Whenever an employer shall contract with another for the performance of the employer's work, it shall be the duty of such employer to provide in such contract that the employees or homeworkers of the contractor and the latter's sub-contractor shall be paid in accordance with the provisions of this Rule. In the event that such contractor or sub-contractor fails to pay the wages or earnings of his employees or homeworkers as specified in this Rule, such employer shall be jointly and severally liable with the contractor or sub-contractor to the workers of the latter, to the extent that such work is performed under such contract, in the same manner as if the employees or homeworkers were directly engaged by the employer. 5. Handicapped/Disabled RA 7277 (Magna Carta for the Disabled)  Section 4

(a) Disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being;

(b) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function; (c) Disability shall mean 1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; 2) a record of such an impairment; or 3) being regarded as having such an impairment; chan robles virtual law library (d) Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability, that limits or prevents the function or activity, that is considered normal given the age and sex of the individual; (i) Sheltered Employment refers to the provision of productive work for disabled persons through workshops providing special facilities, income-producing projects or homework schemes with a view to giving them the opportunity to earn a living thus enabling them to acquire a working capacity required in open industry;  Section 5-11

TITLE II RIGHTS AND PRIVILEGES OF DISABLED PERSONS CHAPTER I EMPLOYMENT Sec. 5. Equal Opportunity for Employment. — No disable person shall be denied access to opportunities for suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person. Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons. Sec. 6. Sheltered Employment — If suitable employment for disabled persons cannot be found through open employment as provided in the immediately preceding Section, the State shall endeavor to provide it by means of sheltered employment. In the placement of disabled persons in sheltered employment, it shall accord due regard to the individual qualities, vocational goals and inclinations to ensure a good working atmosphere and efficient production. Sec. 7. Apprenticeship. — Subject to the provisions of the Labor Code as amended, disabled persons shall be eligible as apprentices or learners: Provided, That their handicap is not as much as to effectively impede the performance of job operations in the particular occupation for which they are hired; Provided, further, That after the lapse of the period of apprenticeship, if found satisfactory in the job performance, they shall be eligible for employment.

Sec. 8. Incentives for Employers. — (a) To encourage the active participation of the private sector in promoting the welfare of disabled persons and to ensure gainful employment for qualified disabled persons, adequate incentives shall be provided to private entities which employ disabled persons. (b) Private entities that employ disabled persons who meet the required skills or qualifications, either as regular employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income, equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to disabled persons: Provided, however, That such entities present proof as certified by the Department of Labor and Employment that disabled persons are under their employ: Provided, further, That the disabled employee is accredited with the Department of Labor and Employment and the Department of Health as to his disability, skills and qualifications. (c) Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income, equivalent to fifty percent (50%) of the direct costs of the improvements or modifications. This Section, however, does not apply to improvements or modifications of facilities required under Batas Pambansa Bilang 344. Sec. 9. Vocational Rehabilitation. — Consistent with the principle of equal opportunity for disabled workers and workers in general, the State shall take appropriate vocational rehabilitation measures that shall serve to develop the skills and potentials of disabled persons and enable them to compete favorably for available productive and remunerative employment opportunities in the labor market. The State shall also take measures to ensure the provision of vocational rehabilitation and livelihood services for disabled persons in the rural areas. In addition, it shall promote cooperation and coordination between the government and nongovernmental organizations and other private entities engaged in vocational rehabilitation activities. The Department of Social Welfare and Development shall design and implement training programs that will provide disabled persons with vocational skills to enable them to engage in livelihood activities or obtain gainful employment. The Department of Labor and Employment shall likewise design and conduct training programs geared towards providing disabled persons with skills for livelihood. Sec. 10. Vocational Guidance and Counseling. — The Department of Social and Welfare and Development, shall implement measures providing and evaluating vocational guidance and counseling to enable disabled persons to secure, retain and advance in employment. It shall ensure the availability and training of counselors and other suitably qualified staff responsible for the vocational guidance and counseling of disabled persons. Sec. 11. Implementing Rules and Regulations. — The Department of Labor and Employment shall in coordination with the Department of Social Welfare and Development (DSWD) and

National Council for the Welfare of the Disabled Persons (NCWDP) shall promulgate the rules and regulations necessary to implement the provisions under this Chapter.  Section 32-33

TITLE III PROHIBITION ON DISCRIMINATION AGAINST DISABLED PERSONS CHAPTER I DISCRIMINATION ON EMPLOYMENT Sec. 32. Discrimination on Employment. — No entity, whether public or private, shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. The following constitute acts of discrimination: (a) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his work opportunities; (b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a disabled person unless such standards, tests or other selection criteria are shown to be job-related for the position in question and are consistent with business necessity; (c) Utilizing standards, criteria, or methods of administration that: (1) have the effect of discrimination on the basis of disability; or (2) perpetuate the discrimination of others who are subject to common administrative control. (d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a qualified disabled employee, by reason of his disability, than the amount to which a non-disabled person performing the same work is entitled; (e) Favoring a non-disabled employee over a qualified disabled employee with respect to promotion, training opportunities, study and scholarship grants, solely on account of the latter's disability; (f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability; (g) Dismissing or terminating the services of a disabled employee by reason of his disability unless the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity: Provided, however, That the employer first sought to provide reasonable accommodations for disabled persons;

(h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the disabled applicant or employee that such tests purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and (i) Excluding disabled persons from membership in labor unions or similar organizations.

Sec. 33. Employment Entrance Examination. — Upon an offer of employment, a disabled applicant may be subjected to medical examination, on the following occasions: (a) all entering employees are subjected to such an examination regardless of disability; (b) information obtained during the medical condition or history of the applicant is collected and maintained on separate forms and in separate medical files and is treated as a confidential medical record; Provided, however, That: (1) supervisors and managers may be informed regarding necessary restrictions on the work or duties of the employees and necessary accommodations; (2) first aid and safety personnel may be informed, when appropriate, if the disability may require emergency treatment; (3) government officials investigating compliance with this Act shall be provided relevant information on request; and (4) the results of such examination are used only in accordance with this Act. 

Article 78-81 (Labor Code)

Chapter III HANDICAPPED WORKERS Art. 78. Definition. Handicapped workers are those whose earning capacity is impaired by age or physical or mental deficiency or injury. Art. 79. When employable. Handicapped workers may be employed when their employment is necessary to prevent curtailment of employment opportunities and when it does not create unfair competition in labor costs or impair or lower working standards. Art. 80. Employment agreement. Any employer who employs handicapped workers shall enter into an employment agreement with them, which agreement shall include: 1. The names and addresses of the handicapped workers to be employed;

2. The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of the applicable legal minimum wage; 3. The duration of employment period; and 4. The work to be performed by handicapped workers. The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized representative. Art. 81. Eligibility for apprenticeship. Subject to the appropriate provisions of this Code, handicapped workers may be hired as apprentices or learners if their handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired.  Book II, Rule VIII of the Omnibus Implementing Rules

RULE VIII Handicapped Workers SECTION 1. Definition of terms. — (a) "Handicapped workers" are those whose earning capacity is impaired by age or physical or mental deficiency or injury. (b) "Employment agreement" is the contract of employment entered into between the employer and the handicapped worker. SECTION 2. When handicapped workers may be employed. — Handicapped workers may be employed when their employment is necessary to prevent curtailment of employment opportunities and when it does not create unfair competition in labor costs or impair working standards. SECTION 3. Contents of employment agreement. — An employer who hires a handicapped worker shall enter into an employment agreement with the latter which shall include: (a) The names and addresses of the employer and the handicapped worker; (b) The rate of pay of the handicapped worker which shall not be less than seventy-five (75%) percent of the legal minimum wage; (c) The nature of work to be performed by the handicapped worker; and (d) The duration of the employment. SECTION 4. Copy of agreement to be furnished to Division. — A copy each of the employment agreement shall be furnished by the employer to the handicapped worker and the Apprenticeship Division involved. The Secretary of Labor and Employment or his duly

authorized representative may inspect from time to time the working conditions of handicapped workers to verify compliance by the parties with their employment agreement. SECTION 5. Eligibility for apprenticeship. — Handicapped workers shall not be precluded from employment as apprentices or learners if their handicap is not such as to effectively impede the performance of job operations in the particular trade or occupation which is the subject of the apprenticeship or learnership program.

6. Apprentices and Learners (Read Memory Aid) V. Labor Standards Benefits A. Coverage of the Labor Code 1. Article 6 of the Labor Code Applicability. All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural. (As amended by Presidential Decree No. 570-A, November 1, 1974) B. General Concepts  PEFTOK Integrated Services vs. NLRC (G.R No. 124841, July 31 1998) Article 6. Rights maybe waived, unless the waiver is contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law.

Pacta privata juri publico derogare non possunt. Private agreements (between parties) cannot derogate from public right. Filed on May 22, 1996, this petition for certiorari under Rule 65 of the Revised Rules of Court seeks to set aside the decision of the National Labor Relations Commission (NLRC) dismissing the appeal of petitioner. The case stemmed from the decision handed down by Labor Arbiter Noel Augusto S. Magbanua, disposing, as follows: ―WHEREFORE, in view of the foregoing premises, respondents-PEFTOK Security Agency and Timber Industries of the Philippines, Inc. (TIPI) and Union Plywood Corporation are hereby ordered to pay, jointly and solidarily the claims of complainants as previously computed as follows: 1. Eduardo Abugho 2. Clenio Macanoquit 3. Claro Mendez 4. Leovemin Lumban 5. Crispin Balingkit 6. Ulysses Labis 7. Fidel Sabellina 8. Leonardo Daluperi P49,397.83 31,596.12 49,308.83 16,666.45 44,772.34 43,812.64 23,666.90 27,026.59

9. Valentine Adame 10. Gonzalo Ernero 11. Celso Niluag 12. Reynaldo Maasin GRAND TOTAL -

17,084.92 18,018.56 18,670.00 19,499.28[1] 342,598.52

Other claims are hereby dismissed for failure to substantiate and for lack of merit. SO ORDERED.‖ Pertinent sheriff‘s return shows that the aforesaid decision was partly executed up to fifty percent (50%), Timber Industries of the Philippines (TIPI) having paid half of their solidary obligation to the security guards-employees, who quitclaimed and waived fifty percent (50%) of the benefits adjudged in their favor. On October 13, 1989,[2] Eduardo Abugho, Claro Mendez and Leonardo Daluperi executed a waiver[3] of all their claims against Peftok Integrated Services, Inc. (PEFTOK, for brevity) for the period ending on June 30, 1989. Said waiver[4] appeared to bar all claims they may have had against PEFTOK before June 30, 1989. Urged by their entitlement to full benefits as provided in the labor arbiter‘s decision, the private respondents sought the issuance of an alias writ of execution. On May 29, 1992, Eduardo Abugho, Fidel Sabellina, Leonardo Daluperi, Claro Mendez and Reynaldo Maasin executed another waiver and quitclaim[5] purportedly renouncing whatever claims they may have against PEFTOK for the period ending March 15, 1998. Such waiver or quitclaim was worded to preclude whatever claim they may have against PEFTOK on or before March 16, 1998. However, Eduardo Abugho, Fidel Sabellina, Leonardo Daluperi, Reynaldo Maasin and Claro Mendez subsequently executed affidavits[6] stating that the aforementioned quitclaims were prepared and readied for their signature by PEFTOK and they were forced to sign the same for fear that they would not be given their salary on pay day, and worse, their services would be terminated if they did not sign the said quitclaims under controversy. Private respondents asserted that the waivers of claims signed by them are contrary to public policy; the same being written in the English language which they do not understand and the contents thereof were not explained to them. On June 19, 1995, the prayer for alias writ of execution was granted by Labor Arbiter Henry F. Te. In support of its prayer, petitioner PEFTOK theorizes that the quitclaims executed by the security guards suffer no legal infirmity. Like any other right, the claims in dispute can be waived and waiver thereof is not prohibited by law. No surety bond is required to perfect an appeal, in the same manner that no bond is necessary for the issuance of an alias writ of execution; petitioner maintains. The comment sent in by the Solicitor General prays that the petition be dismissed outright for being premature and for non-compliance with the requisite motion for reconsideration of the NLRC decision before elevating the same to this court. It stressed that quitclaims by employees are basically against public policy. There is no quibble over the fact that subject decision of the labor arbiter appealed from was received by petitioner on June 30, 1995. The appeal therefrom should have been interposed within 10 days or not later than July 10, 1995. But unfortunately for petitioner, its appeal was only filed on July 17, 1995. Indeed, it is decisively clear that petitioner‘s appeal is flawed by late filing. The prescribed period for appeal is both mandatory and jurisdictional.

Then, too, the petition under consideration is likewise dismissable on the ground of prematurity. In consonance with the principle of exhaustion of administrative remedies, it was necessary for a motion for reconsideration of the decision of the National Labor Relations Commission to be filed in order to give NLRC a chance to correct its mistakes, if there be any. So also, under Rule 65 of the Revised Rules of Court, petitioner must establish that it has no plain, speedy and adequate remedy in the ordinary course of law for its perceived grievance.[7] It is decisively clear that they (guards) affixed their signatures to subject waivers and/or quitclaims for fear that they would not be paid their salaries on pay day or worse, still, their services would be terminated if they did not sign those papers. In short, there was no voluntariness in the execution of the quitclaim or waivers in question. it should be borne in mind that in this jurisdiction, quitclaims, waivers or releases are looked upon with disfavor.[8] ―Necessitous men are not free men.‖[9] ―They are commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers‘ legal rights.‖[10] With respect to the posting of cash or surety bond, the requirement therefor is mandatory. The bond is sine qua non to the perfection of appeal from the labor arbiter‘s monetary award.[11] The posting of cash or surety bond is unconditional‖[12] and cannot therefore be trifled with. It is the intendment of the law that employees be assured that if they finally prevail in the case, they will receive the monetary award granted them. The bond also serves to discourage employers from using the appeal as a ploy to delay or evade payment of monetary obligations to their employees. WHEREFORE, the petition is hereby DISMISSED for lack of merit; the decision of the NLRC dated February 26, 1995 is AFFIRMED and the questioned alias writ of execution UPHELD.  San Miguel Brewery Sales vs. Ople (170 SCRA 25, G.R no. L-53515)

This is a petition for review of the Order dated February 28, 1980 of the Minister of Labor in Labor Case No. AJML-069-79, approving the private respondent‘s marketing scheme, known as the ―Complementary Distribution System‖ (CDS) and dismissing the petitioner labor union‘s complaint for unfair labor practice. On April 17, 1978, a collective bargaining agreement (effective on May 1, 1978 until January 31, 1981) was entered into by petitioner San Miguel Corporation Sales Force Union (PTGWO), and the private respondent, San Miguel Corporation, Section 1, of Article IV of which provided as follows: Art. IV, Section 1. Employees within the appropriate bargaining unit shall be entitled to a basic monthly compensation plus commission based on their respective sales. In September 1979, the company introduced a marketing scheme known as the ―Complementary Distribution System‖ (CDS) whereby its beer products were offered for sale directly to wholesalers through San Miguel‘s sales offices.

The labor union (herein petitioner) filed a complaint for unfair labor practice in the Ministry of Labor, with a notice of strike on the ground that the CDS was contrary to the existing marketing scheme whereby the Route Salesmen were assigned specific territories within which to sell their stocks of beer, and wholesalers had to buy beer products from them, not from the company. It was alleged that the new marketing scheme violates Section 1, Article IV of the collective bargaining agreement because the introduction of the CDS would reduce the take-home pay of the salesmen and their truck helpers for the company would be unfairly competing with them. The complaint filed by the petitioner against the respondent company raised two issues: (1) whether the CDS violates the collective bargaining agreement, and (2) whether it is an indirect way of busting the union. In its order of February 28, 1980, the Minister of Labor found: … We see nothing in the record as to suggest that the unilateral action of the employer in inaugurating the new sales scheme was designed to discourage union organization or diminish its influence, but rather it is undisputable that the establishment of such scheme was part of its overall plan to improve efficiency and economy and at the same time gain profit to the highest. While it may be admitted that the introduction of new sales plan somewhat disturbed the present set-up, the change however was too insignificant as to convince this Office to interpret that the innovation interfered with the worker‘s right to self-organization. Petitioner‘s conjecture that the new plan will sow dissatisfaction from its ranks is already a prejudgment of the plan‘s viability and effectiveness. It is like saying that the plan will not work out to the workers‘ [benefit] and therefore management must adopt a new system of marketing. But what the petitioner failed to consider is the fact that corollary to the adoption of the assailed marketing technique is the effort of the company to compensate whatever loss the workers may suffer because of the new plan over and above than what has been provided in the collective bargaining agreement. To us, this is one indication that the action of the management is devoid of any anti-union hues. The dispositive part of the Minister‘s Order reads: WHEREFORE, premises considered, the notice of strike filed by the petitioner, San Miguel Brewery Sales Force Union-PTGWO is hereby dismissed. Management however is hereby ordered to pay an additional three (3) months back adjustment commissions over and above the adjusted commission under the complementary distribution system. The petition has no merit. Public respondent was correct in holding that the CDS is a valid exercise of management prerogatives:

Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of work. … (NLU vs. Insular La Yebana Co., 2 SCRA 924; Republic Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V. Hernandez, Labor Relations Law, 1985 Ed., p. 44.) Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means designed towards that goal. In Abbott Laboratories vs. NLRC, 154 SCRA 713, We ruled: … Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. So long as a company‘s management prerogatives are exercised in good faith for the advancement of the employer‘s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them (LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18 SCRA 110). San Miguel Corporation‘s offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS by paying them a so-called ―back adjustment commission‖ to make up for the commissions they might lose as a result of the CDS proves the company‘s good faith and lack of intention to bust their union. WHEREFORE, the petition for certiorari is dismissed for lack of merit. Labor Standards – Management Rights – Return of Investments In 1979, SMC implemented its ―Complementary Distribution System‖ (CDS) whereby wholesalers can directly get beer products from any SMC offices. The SMB Union assailed this program because it violates the CBA particularly the established scheme whereby route salesmen have been given specific territories to sell beer products. The CDS scheme would then lower the take home pay of the route salesmen. SMB Union then sued SMC for unfair labor practices. ISSUE: Whether or not the CDS is a violation of the CBA. HELD: No. The SC ruled that the CDS is an exercise of management prerogatives whereby the management can implement schemes to optimize their profit. Further, the CDS provides for a compensation clause as well for salesmen. San Miguel Corporation‘s offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS by paying them a so-called ―back adjustment commission‖ to make up for the commissions they

might lose as a result of the CDS proves the company‘s good faith and lack of intention to bust their union. C. Working Conditions 1. Article 82 (Labor Code) Coverage. The provisions 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. As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. 2. Book III, Rule 1, Section 1 of the Omnibus Implementing Rules SECTION 1. General statement on coverage. The provisions of this Rule shall apply to all employees in all establishments and undertakings, whether operated for profit or not, except to those specifically exempted under Section 2 hereof. 3. Book III, Rule 1, Section 2 of the Omnibus Implementing Rules SECTION 2. Exemption. — The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein: (a) Government employees whether employed by the National Government or any of its political subdivision, including those employed in government-owned and/or controlled corporations; (b) Managerial employees, if they meet all of the following conditions: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof. (2) They customarily and regularly direct the work of two or more employees therein. (3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.

(c) Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; and (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 work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. (d) Domestic servants and persons in the personal service of another if they perform such services in the employer's home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employer's household. (e) Workers who are paid by results, including those who are paid on piece-work, "takay," "pakiao" or task basis, and other non-time work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section. (f) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.  Facts: Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery. In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. We glean from the records that for about ten years prior to the JE Program, the members of respondent union were treated in the same manner as rankand 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. National Sugar vs. NLRC (G.R No. 101761, 1993)

With the implementation of the JE Program, 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. In May 1990, petitioner NASUREFCO recognized herein respondent union, which was organized pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own unions, as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery. In June 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. In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages complained of. On appeal, in a decision promulgated on July 1991, respondent National Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent union are not managerial employees, and, therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the evaluation, review and final action by their department heads. Issue: W/N the Supervisors are considered Managerial Employees and should no longer receive overtime, rest day and holiday pay. Ruling: Yes Ratio: "Art. 82 Coverage. — The provisions 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. "As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff." (Emphasis supplied.) It is the submission of petitioner that 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.

Quintessentially, 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. As correctly pointed out by petitioner, if the union members really wanted to continue receiving the benefits which attach to their former positions, there was nothing to prevent them from refusing to accept their promotions and their corresponding benefits. As the saying goes by, they could not, as a simple matter of law and fairness, get the best of both worlds at the expense of NASUREFCO. Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management, provided it is done in good faith. In the case at bar, private respondent union has miserably failed to convince this Court that the petitioner acted implementing the JE Program. There is no showing that the JE Program was intended to circumvent the law and deprive the members of respondent union of the benefits they used to receive. FACTS: Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery. On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. As a result, all positions were re-evaluated, and all employees including the members of respondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions. 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. With the implementation of the JE Program, the following adjustments among others 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. On May 11, 1990, petitioner NASUREFCO recognized herein respondent union as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery.

Two years after the implementation of the JE Program the members of herein respondent union filed a complaint for non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code. ISSUE: W/N supervisory employees should be 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. HELD: YES. Article 212(m), Book V of the Labor Code on Labor Relations 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 rankand-file employees of this Book.‖ Respondent NLRC, in holding that the union members are entitled to overtime, rest day and holiday pay, and in ruling that the latter are not managerial employees, adopted the definition stated in the aforequoted statutory provision. A cursory perusal of the Job Value Contribution Statements of the union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning, organizing, staffing, directing, controlling communicating and in making decisions in attaining the company‘s set goals and objectives. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. The members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the aforestated Rules to Implement the Labor Code, viz.: (1) their primary duty consists of the performance of work directly related to management policies of their employer; (2) they customarily and regularly exercise discretion and independent judgment; (3) they regularly and directly assist the managerial employee whose primary duty consist of the management of a department of the establishment in which they are employed (4) they execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; (5) they execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described.

Under the facts obtaining in this case, the union members should be considered as officers and members of the managerial staff and are, therefore, exempt from the coverage of Article 82 hence they are not entitled to overtime, rest day and holiday  Apex Mining Mining Co. Inc vs. NLRC (G.R No. 94951, 1991)

Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm? This is the novel issue raised in this petition. Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece rate basis. However, on January 17, 1982, she was paid on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month. On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally slipped and hit her back on a stone. She reported the accident to her immediate supervisor Mila de la Rosa and to the personnel officer, Florendo D. Asirit. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for medication. De la Rosa offered her the amount of P 2,000.00 which was eventually increased to P5,000.00 to persuade her to quit her job, but she refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her on February 4, 1988. On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and Employment. After the parties submitted their position papers as required by the labor arbiter assigned to the case on August 24, 1988 the latter rendered a decision, the dispositive part of which reads as follows:
WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the respondent, Apex Mining Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit: 1 Salary Differential –– P16,289.20 2. Emergency Living Allowance –– 12,430.00 3. 13th Month Pay Differential –– 1,322.32 4. Separation Pay (One-month for

every year of service [1973-19881) –– 25,119.30 or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55,161.42). SO ORDERED.
1

Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations Commission (NLRC), wherein in due course a decision was rendered by the Fifth Division thereof on July 20, 1989 dismissing the appeal for lack of merit and affirming the appealed decision. A motion for reconsideration thereof was denied in a resolution of the NLRC dated June 29, 1990. Hence, the herein petition for review by certiorari, which appopriately should be a special civil action for certiorari, and which in the interest of justice, is hereby treated as such. 2 The main thrust of the petition is that private respondent should be treated as a mere househelper or domestic servant and not as a regular employee of petitioner. The petition is devoid of merit. Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are defined as follows: The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family. 3 The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to minister exclusively to the personal comfort and enjoyment of the employer's family. Such definition covers family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other similar househelps. The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the needs of the company's guest and other persons availing of said facilities. By the same token, it cannot be considered to extend to then driver, houseboy, or gardener exclusively working in the company, the staffhouses and its premises. They may not be considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law. The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are

employees of the company or employer in the business concerned entitled to the privileges of a regular employee. Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the employer that such househelper or domestic servant may be considered as such as employee. The Court finds no merit in making any such distinction. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and employees, warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer and not as a mere family househelper or domestic servant as contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as amended. Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her work. This argument notwithstanding, there is enough evidence to show that because of an accident which took place while private respondent was performing her laundry services, she was not able to work and was ultimately separated from the service. She is, therefore, entitled to appropriate relief as a regular employee of petitioner. Inasmuch as private respondent appears not to be interested in returning to her work for valid reasons, the payment of separation pay to her is in order. WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are hereby AFFIRMED. No pronouncement as to costs. FACTS: Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on apiece rate basis. However, later on, she was paid on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month. While she was attending to her assigned task and she was hanging her laundry, she accidentally slipped and hit her back on a stone. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for medication. She was offered the amount of P 2,000.00 which was eventually increased to P5,000.00 to persuade her to quit her job, but she refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her. Private respondent filed a request for assistance with the DOLE. The latter rendered a decision ordering the petitioner to pay Candida the total amount of P55,161.42 as Salary Differential, Emergency Living Allowance,13th Month Pay Differential and Separation Pay. Petitioner then appealed to the NLRC which in turn, dismissed the appeal. ISSUE: Whether or not a househelper in the staff houses of an industrial company is a domestic helper or a regular employee of the said firm. HELD:

Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are defined as follows: The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family. The definition cannot be interpreted to include househelp or laundrywomen working in staff houses of a company, like petitioner who attends to the needs of the company's guest and other persons availing of said facilities. The criterion is the personal comfort and enjoyment of the family of the employer in the home of said employer. The nature of the work of a househelper or laundrywoman in a home or in a company staff house maybe similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staff houses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in thebusiness concerned entitled to the privileges of a regular employee. 

San Miguel vs. Democratic Labor, (G.R No. L-18353, 1963)

On January 27, 1955, the Democratic Labor Association filed complaint against the San Miguel Brewery, Inc. embodying 12 demands for the betterment of the conditions of employment of its members. The company filed its answer to the complaint specifically denying its material averments and answering the demands point by point. The company asked for the dismissal of the complaint. At the hearing held sometime in September, 1955, the union manifested its desire to confine its claim to its demands for overtime, night-shift differential pay, and attorney's fees, although it was allowed to present evidence on service rendered during Sundays and holidays, or on its claim for additional separation pay and sick and vacation leave compensation.1äwphï1.ñët After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who was commissioned to receive the evidence, rendered decision expressing his disposition with regard to the points embodied in the complaint on which evidence was presented. Specifically, the disposition insofar as those points covered by this petition for review are concerned, is as follows: 1. With regard to overtime compensation, Judge Bautista held that the provisions of the Eight-Hour Labor Law apply to the employees concerned for those working in the field or engaged in the sale of the company's products outside its premises and consequently they should be paid the extra compensation accorded them by said law in addition to the monthly salary and commission earned by them, regardless of the meal allowance given to employees who work up to late at night. 2. As to employees who work at night, Judge Bautista decreed that they be paid their corresponding salary differentials for work done at night prior to January 1, 1949 with the present qualification: 25% on the basis of their salary to those who work from 6:00 to 12:00 p.m., and 75% to those who work from 12:01 to 6:00 in the morning.

3. With regard to work done during Sundays and holidays, Judge Bautista also decreed that the employees concerned be paid an additional compensation of 25% as provided for in Commonwealth Act No. 444 even if they had been paid a compensation on monthly salary basis. The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis, payment of accumulated vacation and sick leave and attorney's fees, as well as the award of additional separation pay, were either dismissed, denied, or set aside. Its motion for reconsideration having been denied by the industrial court en banc, which affirmed the decision of the court a quo with few exceptions, the San Miguel Brewery, Inc. interposed the present petition for review. Anent the finding of the court a quo, as affirmed by the Court of Industrial Relations, to the effect that outside or field sales personnel are entitled to the benefits of the Eight-Hour Labor Law, the pertinent facts are as follows: 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 require 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. The amount of compensation they receive is uncertain depending upon their individual efforts or industry. Besides the monthly salary, they are paid sales commission that range from P30, P40, sometimes P60, P70, to sometimes P90, P100 and P109 a month, at the rate of P0.01 to P0.01½ per case. 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. Indeed, it is claimed, overtime compensation is an additional pay for work or services rendered in excess of 8 hours a day by an employee, and if the employee is already given extra compensation for labor performed in excess of 8 hours a day, he is not covered by the law. His situation, the company contends, can be likened to an employee who is paid on piece-work, "pakiao", or commission basis, which is expressly excluded from the operation of the Eight-Hour Labor Law.1 We are in accord with this view, for in our opinion the Eight-Hour Labor Law only has application where an employee or laborer is paid on a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if he is made to work beyond the requisite period of 8 hours, he should be paid the additional compensation prescribed by law. This law has no application when the employee or laborer is paid on a piece-work, "pakiao", or commission basis, regardless of

the time employed. The philosophy behind this exemption is that his earnings in the form of commission based on the gross receipts of the day. His participation depends upon his industry so that the more hours he employs in the work the greater are his gross returns and the higher his commission. This philosophy is better explained in Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, as follows: The reasons for excluding an outside salesman are fairly apparent. Such salesman, to a greater extent, works individually. There are no restrictions respecting the time he shall work and he can earn as much or as little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily receives commissions as extra compensation. He works away from his employer's place of business, is not subject to the personal supervision of his employer, and his employer has no way of knowing the number of hours he works per day. True it is that the employees concerned are paid a fixed salary for their month of service, such as Benjamin Sevilla, a salesman, P215; Mariano Ruedas, a truck driver, P155; Alberto Alpaza and Alejandro Empleo, truck helpers, P125 each, and sometimes they work in excess of the required 8-hour period of work, 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. Thus, on this point, said official stated: . . . Moreover, when a fieldman receives a regular monthly salary plus commission on percentage basis of his sales, it is also the established policy of the Office to consider his commission as payment for the extra time he renders in excess of eight hours, thereby classifying him as if he were on piecework basis, and therefore, technically speaking, he is not subject to the Eight-Hour Labor Law. We are, therefore, of the opinion that the industrial court erred in holding that the Eight-Hour Labor Law applies to the employees composing the outside service force and in ordering that they be paid the corresponding additional compensation. With regard to the claim for night salary differentials, the industrial court found that claimants Magno Johnson and Jose Sanchez worked with the respondent company during the period specified by them in their testimony and that watchmen Zoilo Illiga, Inocentes Prescillas and Daniel Cayuca rendered night duties once every three weeks continuously during the period of the employment and that they were never given any additional compensation aside from their monthly regular salaries. The court found that the company started paying night differentials only in January, 1949 but never before that time. And so it ordered that the employees concerned be paid 25% additional compensation for those who worked from 6:00 to 12:00 p.m. and 75% additional compensation for those who worked from 12:01 to 6: 00 in the morning. It is now contended that this ruling is erroneous because an award for night shift differentials cannot be given retroactive effect but can only be entertained from the date of demand which was on

January 27, 1953, citing in support thereof our ruling in Earnshaws Docks & Honolulu Iron Works v. The Court of Industrial Relations, et al., L-8896, January 25, 1957. This ruling, however, has no application here for it appears that before the filing of the petition concerning this claim a similar one had already been filed long ago which had been the subject of negotiations between the union and the company which culminated in a strike in 1952. Unfortunately, however, the strike fizzled out and the strikers were ordered to return to work with the understanding that the claim for night salary differentials should be settled in court. It is perhaps for this reason that the court a quo granted this claim in spite of the objection of the company to the contrary. The remaining point to be determined refers to the claim for pay for Sundays and holidays for service performed by some claimants who were watchmen or security guards. It is contended that these employees are not entitled to extra pay for work done during these days because they are paid on a monthly basis and are given one day off which may take the place of the work they may perform either on Sunday or any holiday. We disagree with this claim because it runs counter to law. Section 4 of Commonwealth Act No. 444 expressly provides that no person, firm or corporation may compel an employee or laborer to work during Sundays and legal holidays unless he is paid an additional sum of 25% of his regular compensation. This proviso is mandatory, regardless of the nature of compensation. The only exception is with regard to public utilities who perform some public service. WHEREFORE, the decision of the industrial court is hereby modified as follows: the award with regard to extra work performed by those employed in the outside or field sales force is set aside. The rest of the decision insofar as work performed on Sundays and holidays covering watchmen and security guards, as well as the award for night salary differentials, is affirmed. No costs. D. Hours of Work 1. Articles 83-90 (Labor Code) Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and (b) all time during which an employee is suffered or permitted to work. Rest periods of short duration during working hours shall be counted as hours worked.

Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o‘clock in the evening and six o‘clock in the morning. Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. Art. 89. Emergency overtime work. Any employee may be required by the employer to perform overtime work in any of the following cases: a. When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; b. When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; c. When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; d. When the work is necessary to prevent loss or damage to perishable goods; and e. Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter. Art. 90. Computation of additional compensation. For purposes of computing overtime and other additional remuneration as required by this Chapter, the "regular wage" of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer.

2. Book III, Rule I, Sections 4-10 Of the Omnibus Implementing Rules SECTION 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: (a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. (b) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place. (c) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. (d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working 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. SECTION 5. Waiting time. — (a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait. (b) An employee who is required to remain on call in the employer's premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call. SECTION 6. Lectures, meetings, training programs. — Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met: (a) Attendance is outside of the employee's regular working hours; (b) Attendance is in fact voluntary; and (c) The employee does not perform any productive work during such attendance. SECTION 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee:

(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion; (b) Where the establishment regularly operates not less than sixteen (16) hours a day; (c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and (d) Where the work is necessary to prevent serious loss of perishable goods. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. SECTION 8. Overtime pay. — Any employee covered by this Rule who is permitted or required to work beyond eight (8) hours on ordinary working days shall be paid an additional compensation for the overtime work in the amount equivalent to his regular wage plus at least twenty-five percent (25%) thereof. SECTION 9. Premium and overtime pay for holiday and rest day work. — (a) Except employees referred to under Section 2 of this Rule, an employee who is permitted or suffered to work on special holidays or on his designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium pay of not less than thirty percent (30%) of his regular wage. For work performed in excess of eight (8) hours on special holidays and rest days not falling on regular holidays, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus at least thirty percent (30%) thereof. (b) Employees of public utility enterprises as well as those employed in non-profit institutions and organizations shall be entitled to the premium and overtime pay provided herein, unless they are specifically excluded from the coverage of this Rule as provided in Section 2 hereof. (c) The payment of additional compensation for work performed on regular holidays shall be governed by Rule IV, Book Three, of these Rules. SECTION 10. Compulsory overtime work. — In any of the following cases, an employer may require any of his employees to work beyond eight (8) hours a day, provided that the employee required to render overtime work is paid the additional compensation required by these regulations: (a) When the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive; (b) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities;

(c) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other causes of similar nature; (d) When the work is necessary to prevent loss or damage to perishable goods; (e) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; or (f) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.cralaw In cases not falling within any of these enumerated in this Section, no employee may be made to work beyond eight hours a day against his will. 3. Book III, Rule 1-A of the Omnibus Implementing Rules RULE I-A Hours of Work of Hospital and Clinic Personnel SECTION 1. General statement on coverage. — This Rule shall apply to: (a) All hospitals and clinics, including those with a bed capacity of less than one hundred (100) which are situated in cities or municipalities with a population of one million or more; and (b) All hospitals and clinics with a bed capacity of at least one hundred (100), irrespective of the size of the population of the city or municipality where they may be situated. SECTION 2. Hospitals or clinics within the meaning of this Rule. — The terms "hospitals" and "clinics" as used in this Rule shall mean a place devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment and care of individuals suffering from illness, disease, injury, or deformity, or in need of obstetrical or other medical and nursing care. Either term shall also be construed as any institution, building, or place where there are installed beds, or cribs, or bassinets for twenty-four (24) hours use or longer by patients in the treatment of disease, injuries, deformities, or abnormal physical and mental states, maternity cases or sanitorial care; or infirmaries, nurseries, dispensaries, and such other similar names by which they may be designated. SECTION 3. Determination of bed capacity and population. — (a) For purposes of determining the applicability of this Rule, the actual bed capacity of the hospital or clinic at the time of such determination shall be considered, regardless of the actual or bed occupancy. The bed capacity of hospital or clinic as determined by the Bureau of Medical Services pursuant to Republic Act No. 4226, otherwise known as the Hospital Licensure Act, shall prima facie be considered as the actual bed capacity of such hospital or clinic. (b) The size of the population of the city or municipality shall be determined from the latest official census issued by the Bureau of the Census and Statistics.

SECTION 4. Personnel covered by this Rule. — This Rule applies to all persons employed by any private or public hospital or clinic mentioned in Section 1 hereof, and shall include, but not limited to, resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians paramedical technicians, psychologists, midwives, and attendants. SECTION 5. Regular working hours. — The regular working hours of any person covered by this Rule shall not be more than eight (8) hours in any one day nor more than forty (40) hours in any one week. For purposes of this Rule a "day" shall mean a work day of twenty-four (24) consecutive hours beginning at the same time each calendar year. A "week" shall mean the work of 168 consecutive hours, or seven consecutive 24-hour work days, beginning at the same hour and on the same calendar day each calendar week. SECTION 6. Regular working days. — The regular working days of covered employees shall not be more than five days in a work week. The work week may begin at any hour and on any day, including Saturday or Sunday, designated by the employer. Employers are not precluded from changing the time at which the work day or work week begins, provided that the change is not intended to evade the requirements of this Rule. SECTION 7. Overtime work. — Where the exigencies of the service so require as determined by the employer, any employee covered by this Rule may be scheduled to work for more than five (5) days or forty (40) hours a week, provided that the employee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least thirty percent (30%) thereof, subject to the provisions of this Book on the payment of additional compensation for work performed on special and regular holidays and on rest days. SECTION 8. Hours worked. — In determining the compensable hours of work of hospital and clinic personnel covered by this Rule, the pertinent provisions of Rule 1 of this Book shall apply. SECTION 9. Additional compensation. — Hospital and clinic personnel covered by this Rule, with the exception of those employed by the Government, shall be entitled to an additional compensation for work performed on regular and special holidays and rest days as provided in this Book. Such employees shall also be entitled to overtime pay for services rendered in excess of forty hours a week, or in excess of eight hours a day, whichever will yield the higher additional compensation to the employee in the work week. SECTION 10. Relation to Rule I. — All provisions of Rule I of this Book which are not inconsistent with this Rule shall be deemed applicable to hospital and clinic personnel.  Rada vs. NLRC (G.R No. 96078, 1992)

In this special civil action for certiorari, petitioner Rada seeks to annul the decision of respondent National Labor Relations Commission (NLRC), dated November 19, 1990, reversing the decision of the labor arbiter which ordered the reinstatement of petitioner with backwages and awarded him overtime pay. 1

The facts, as stated in the Comment of private respondent Philnor Consultants and Planners, Inc. (Philnor), are as follows: ―Petitioner‘s initial employment with this Respondent was under a ‗Contract of Employment for a Definite Period‘ dated July 7, 1977, copy of which is hereto attached and made an integral part hereof as Annex A whereby Petitioner was hired as ‗Driver‘ for the construction supervision phase of the Manila North Expressway Extension, Second Stage (hereinafter referred to as MNEE Stage 2) for a term of ‗about 24 months effective July 1, 1977.‘ xxx xxx xxx

―Highlighting the nature of Petitioner‘s employment, Annex A specifically provides as follows: ‗It is hereby understood that the Employer does not have a continuing need for the services of the Employee beyond the termination date of this contract and that the Employee‘s services shall automatically, and without notice, terminate upon the completion of the above specified phase of the project; and that it is further understood that the engagement of his/her services is coterminous with the same and not with the whole project or other phases thereof wherein other employees of similar position as he/she have been hired.‘ (Par. 7, emphasis supplied). ―Petitioner‘s first contract of employment expired on June 30, 1979. Meanwhile, the main project, MNEE Stage 2, was not finished on account of various constraints, not the least of which was inadequate funding, and the same was extended and remained in progress beyond the original period of 2.3 years. Fortunately for the Petitioner, at the time the first contract of employment expired, Respondent was in need of Driver for the extended project. Since Petitioner had the necessary experience and his performance under the first contract of employment was found satisfactory, the position of Driver was offered to Petitioner, which he accepted. Hence a second Contract of Employment for a Definite Period of 10 months, that is, from July 1, 1979 to April 30, 1980 was executed between Petitioner and Respondent on July 7, 1979. . . ―In March 1980 some of the areas or phases of the project were completed, but the bulk of the project was yet to be finished. By that time some of those project employees whose contracts of employment expired or were about to expire because of the completion of portions of the project were offered another employment in the remaining portion of the project. Petitioner was among those whose contract was about to expire, and since his service performance was satisfactory, respondent renewed his contract of employment in April 1980, after Petitioner agreed to the offer. Accordingly, a third contract of employment for a definite period was executed by and between the Petitioner and the Respondent whereby the Petitioner was again employed as Driver for 19 months, from May 1, 1980 to November 30, 1981, . . . ―This third contract of employment was subsequently extended for a number of times, the last extension being for a period of 3 months, that is, from October 1, 1985 to December 31, 1985, . .. ―The last extension, from October 1, 1985 to December 31, 1985 (Annex E) covered by an ‗Amendment to the Contract of Employment with a Definite Period,‘ was not extended any further because Petitioner had no more work to do in the project. This last extension was confirmed by a notice on November 28, 1985 duly acknowledged by the Petitioner the very next day, . . .

―Sometime in the 2nd week of December 1985, Petitioner applied for ‗Personnel Clearance‘ with Respondent dated December 9, 1985 and acknowledged having received the amount of P3,796.20 representing conversion to cash of unused leave credits and financial assistance. Petitioner also released Respondent from all obligations and or claims, etc. in a ‗Release, Waiver and Quitclaim‘ . . .‖ 2 Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National Capital Region, Department of Labor and Employment, a Complaint for nonpayment of separation pay and overtime pay. On June 3, 1987, Philnor filed its Position Paper alleging, inter alia, that petitioner was not illegally terminated since the project for which he was hired was completed; that he was hired under three distinct contracts of employment, each of which was for a definite period, all within the estimated period of MNEE Stage 2 Project, covering different phases or areas of the said project; that his work was strictly confined to the MNEE Stage 2 Project and that he was never assigned to any other project of Philnor; that he did not render overtime services and that there was no demand or claim for him for such overtime pay; that he signed a ―Release, Waiver and Quitclaim,‖ releasing Philnor from all obligations and claims; and that Philnor‘s business is to provide engineering consultancy services, including supervision of construction services, such that it hires employees according to the requirements of the project manning schedule of a particular contract. 3 On July 2, 1987, petitioner filed an Amended Complaint alleging that he was illegally dismissed and that he was not paid overtime pay although he was made to render three hours overtime work from Monday to Saturday for a period of three years. On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed since he was a regular employee entitled to security of tenure; that he was not a project employee since Philnor is not engaged in the construction business as to be covered by Policy Instructions No. 20; that the contract of employment for a definite period executed between him and Philnor is against public policy and a clear circumvention of the law designed merely to evade any benefits or liabilities under the statute; that his position as driver was essential, necessary and desirable to the conduct of the business of Philnor; that he rendered overtime work until 6:00 P.M. daily except Sundays and holidays and, therefore, he was entitled to overtime pay. 4 In his Reply to Respondent‘s Position Paper, petitioner claimed that he was a reg ular employee pursuant to Article 278(c) of the Labor Code and, thus, he cannot be terminated except for a just cause under Article 280 of the Code; and that the public respondent‘s ruling in Quiwa vs. Philnor Consultants and Planners, Inc. 5 is not applicable to his case since he was an administrative employee working as a company driver, which position still exists and is essential to the conduct of the business of Philnor even after the completion of his contract of employment. 6 Petitioner likewise avers that the contract of employment for a definite period entered into between him and Philnor was a ploy to defeat the intent of Article 280 of the Labor Code. On July 28, 1987, Philnor filed its Respondent‘s Supplemental Position Paper, alleging therein that petitioner was not a company driver since his job was to drive the employees hired to work at the MNEE Stage 2 Project to and from the field office at Sto. Domingo Interchange, Pampanga; that the office hours observed in the project were from 7:00 A.M. to 4:00 P.M., Mondays through Saturdays; that Philnor adopted the policy of allowing certain employees, not necessarily the project driver, to bring home project vehicles to afford fast and free transportation to and from the project field office considering the distance between the project site and the employees‘ residences, to avoid project delays and inefficiency due to employee tardiness caused by transportation problems; that petitioner was allowed to use a project vehicle

which he used to pick up and drop off some ten employees along Epifanio de los Santos Avenue (EDSA), on his way home to Marikina, Metro Manila; that when he was absent or on leave, another employee living in Metro Manila used the same vehicle in transporting the same employees; that the time used by petitioner to and from his residence to the project site from 5:30 A.M. to 7:00 A.M. and from 4:00 P.M. to 6:00 P.M., or about three hours daily, was not overtime work as he was merely enjoying the benefit and convenience of free transportation provided by Philnor, otherwise without such vehicle he would have used at least four hours by using public transportation and spent P12.00 daily as fare; that in the case of Quiwa vs. Philnor Consultants and Planners Inc., supra, the NLRC upheld Philnor‘s position that Quiwa was a project employee and he was not entitled to termination pay under Policy Instructions No. 20 since his employment was coterminous with the completion of the project. On August 25, 1987, Philnor filed its Respondent‘s Reply/Comments to Complainant‘s Rejoinder and Reply, submitting therewith two letters dated January 5, 1985 and February 6, 1985, signed by MNEE Stage 2 Project employees, including herein petitioner, where they asked what termination benefits could be given to them as the MNEE Stage 2 Project was nearing completion, and Philnor‘s letter-reply dated February 22, 1985 informing them that they are not entitled to termination benefits as they are contractual/project employees. On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision, 7 with the following dispositive portion: ―WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered: (1) Ordering the respondent company to reinstate the complainant to his former position without loss of seniority right and other privileges with full backwages from the time of his dismissal to his actual reinstatement; (2) Directing the respondent company to pay the complainant overtime pay for the three excess hours of work performed during working days from January 1983 to December 1985; and (3) Dismissing all other claims for lack of merit. SO ORDERED.‖ Acting to Philnor‘s appeal, the NLRC rendered its assailed decision dated November 19, 1990, setting aside the labor arbiter‘s aforequoted decision and dismissing petitioner‘s complaint. Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion amounting to lack of jurisdiction for the following reasons: 1. The decision of the labor arbiter, dated August 31, 1989, has already become final and executory; 2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is it applicable to this case; 3. The petitioner is a regular employee with eight years and five months of continuous services for his employer, private respondent Philnor;

4. The claims for overtime services, reinstatement and full backwages are valid and meritorious and should have been sustained; and 5. The decision of the labor arbiter should be reinstated as it is more in accord with the facts, the law and evidence. The petition is devoid of merit. 1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of the appeal filed by Philnor in spite of the latter‘s failure to file a supersedeas bond within ten days from receipt of the labor arbiter‘s decision, by reason of which the appeal should be deemed to have been filed out of time. It will be noted, however, that Philnor was able to file a bond although it was made beyond the 10-day reglementary period. While it is true that the payment of the supersedeas bond is an essential requirement in the perfection of an appeal, however, where the fee had been paid although payment was delayed, the broader interests of justice and the desired objective of resolving controversies on the merits demands that the appeal be given due course. Besides, it was within the inherent power of the NLRC to have allowed late payment of the bond, considering that the aforesaid decision of the labor arbiter was received by private respondent on October 3, 1989 and its appeal was duly filed on October 13, 1989. However, said decision did not state the amount awarded as backwages and overtime pay, hence the amount of the supersedeas bond could not be determined. It was only in the order of the NLRC of February 16, 1990 that the amount of the supersedeas bond was specified and which bond, after an extension granted by the NLRC, was timely filed by private respondent. Moreover, as provided by Article 221 of the Labor Code, ―in any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in Courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively without regard to technicalities of law or procedure, all in the interest of due process. 8 Finally, the issue of timeliness of the appeal being an entirely new and unpleaded matter in the proceedings below it may not now be raised for the first time before this Court. 9 2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he cannot be terminated without cause. Private respondent Philnor believes otherwise and asserts that petitioner is merely a project employee who was terminated upon the completion of the project for which he was employed. In holding that petitioner is a regular employee, the labor arbiter found that: ―. . . There is no question that the complainant was employed as driver in the respondent company continuously from July 1, 1977 to December 31, 1985 under various contracts of employment. Similarly, there is no dispute that respondent Philnor Consultants & Planners, Inc., as its business name connotes, has been engaged in providing to its client(e)le engineering consultancy services. The record shows that while the different labor contracts executed by the parties stipulated definite periods of engaging the services of the complainant, yet the latter was suffered to continue performing his job upon the expiration of one contract and the renewal of another. Under these circumstances, the complainant has obtained the status of regular employee, it appearing that he has worked without fail for almost eight years a fraction of six

months considered as one whole year, and that his assigned task as driver was necessary and desirable in the usual trade business of the respondent employer. Assuming to be true, as spelled out in the employment contract, that the Employer has no ‗continuing need for the services of the Employe(e) beyond the termination date of this contract and that the Employee‘s services shall automatically, and without notice, terminate upon completion of the above specified phase of the project,‘ still we cannot see our way clear why the complainant was hired and his services engaged contract after contract straight from 1977 to 1985 which, to our considered few, lends credence to the contention that he worked as regular driver ferrying early in the morning office personnel to the company main office in Pampanga and bringing them back late in the afternoon to Manila, and driving company executives for inspection of construction projects, as well as engineers and workers to the jobsites. All told, we believe that the complainant, under the environmental facts obtaining in the case at bar, is a regular employee, the provision of written agreement to the contrary notwithstanding and regardless of the oral understanding of the parties . . .‖ 10 On the other hand, respondent NLRC declared that, as between the uncorroborated and unsupported assertions of petitioner and those of private respondent which are supported by documents, greater credence should be given the latter. It further held that: ―Complainant was hired in a specific project or undertaking as driver. While such project was still on-going he was hired several times with his employment period fixed every time his contract was renewed. At the completion of the specific project or undertaking his employment contract was not renewed. ―We reiterate our ruling, in the case of (Quiwa) vs. Philnor Consultants and Planners, Inc., NLRC RAB III 5-1738-84, it being applicable in this case, viz: ―. . . While it is true that the activities performed by him were necessary or desirable in the usual business or trade of the respondent as consultants, planners, contractor and while it is also true that the duration of his employment was for a period of about seven years, these circumstances did not make him a regular employee in contemplation of Article 281 of (the) Labor Code . . .‖ 11 Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et al., 12 is applicable to the case at bar. Thus: ―We hold that private respondents were project employees whose work was coterminous with the project for which they were hired. Project employees, as distinguished from regular or nonproject employees, are mentioned in Section 281 of the Labor Code as those ‗where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.‘ ―Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer employee relations in the construction industry, provides:

‗Project employees are those employed in connection with a particular construction project. Non-project (regular) employees are those employed by a construction company without reference to any particular project.

‗Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination.‘ ―The petitioner cited three of its own cases wherein the National Labor Relations Commission, Deputy Minister of Labor and Employment Inciong and the Director of the National Capital Region held that the layoff of its project employees was lawful. Deputy Minister Inciong in TFU Case No. 1530, In Re Sandoval Shipyards, Inc. Application for Clearance to Terminate Employees, rendered the following ruling on February 26, 1979: ‗We feel that there is merit in the contention of the applicant corporation. To our mind, the employment of the employees concerned were fixed for a specific project or undertaking. For the nature of the business the corporation is engaged into is one which will not allow it to employ workers for an indefinite period. ‗It is significant to note that the corporation does not construct vessels for sale or otherwise which will demand continuous productions of ships and will need permanent or regular workers. It merely accepts contracts for shipbuilding or for repair of vessels from third parties and, only, on occasion when it has work contract of this nature that it hires workers to do the job which, needless to say, lasts only for less than a year or longer. ‗The completion of their work or project automatically terminates their employment, in which case, the employer is, under the law, only obliged to render a report on the termination of the employment. (139-140, Rollo of G.R. No. 65689)‖‗ ( emphasis supplied.) In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., 13 we likewise held that: ―As an electrical contractor, the private respondent depends for its business on the contracts it is able to obtain from real estate developers and builders of buildings. Since its work depends on the availability of such contracts or ‗projects,‘ necessarily the duration of the employments of its work force is not permanent but co-terminus with the projects to which they are assigned and from whose payrolls they are paid. It would be extremely burdensome for their employer who, like them, depends on the availability of projects, if it would have to carry them as permanent employees and pay them wages even if there are no projects for them to work on‖ ( emphasis supplied.) It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the fact that his services were rendered only for a particular project which took that same period of time to complete categorizes him as a project employee. Petitioner was employed for one specific project. A non-project employee is different in that the employee is hired for more than one project. A non-project employee, vis-a-vis a project employee, is best exemplified in the case of Fegurin, et al. vs. National Labor Relations Commission, et al. 14 wherein four of the petitioners had been working with the company for nine years, one for eight years, another for six years, the shortest term being three years. In holding that petitioners are regular employees, this Court therein explained:

―Considering the nature of the work of petitioners, that of carpenter, laborer or mason, their respective jobs would actually be continuous and on-going. When a project to which they are individually assigned is completed, they would be assigned to the next project or a phase thereof. In other words, they belonged to a work pool‘ from which the company would draw workers for assignment to other projects at its discretion. They are, therefore, actually ‗non-project employees.‘‖ From the foregoing, it is clear that petitioner is a project employee considering that he does not belong to a ―work pool‖ from which the company would draw workers for assignment to other projects at its discretion. It is likewise apparent from the facts obtaining herein that petitioner was utilized only for one particular project, the MNEE Stage 2 Project of respondent company. Hence, the termination of herein petitioner is valid by reason of the completion of the project and the expiration of his employment contract. 3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to petitioner‘s job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of the employer, herein private respondent. This fact is inevitably deducible from the Memorandum of respondent company: ―The herein Respondent resorted to the above transport arrangement because from its previous project construction supervision experiences, Respondent found out that project delays and inefficiencies resulted from employees‘ tardiness; and that the problem of tardiness, in turn, was aggravated by transportation problems, which varied in degrees in proportion to the distance between the project site and the employees‘ residence. In view of this lesson from experience, and as a practical, if expensive, solution to employees‘ tardiness and its concomitant problems, Respondent adopted the policy of allowing certain employees not necessarily project drivers to bring home project vehicles, so that employees could be afforded fast, convenient and free transportation to and from the project field office . . .‖ 15 Private respondent does not hesitate to admit that it is usually the project driver who is tasked with picking up or dropping off his fellow employees. Proof thereof is the undisputed fact that when petitioner is absent, another driver is supposed to replace him and drive the vehicle and likewise pick up and/or drop off the other employees at the designated points on EDSA. If driving these employees to and from the project site is not really part of petitioner‘s job, then there would have been no need to find a replacement driver to fetch these employees. But since the assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time required of and used by petitioner in going from his residence to the field office and back, that is, from 5:30 A.M. to 7:00 A.M. and from 4:00 P.M. to around 6:00 P.M., which the labor arbiter rounded off as averaging three hours each working day, should be paid as overtime work. Quintessentially, petitioner should be given overtime pay for the three excess hours of work performed during working days from January, 1983 to December, 1985. WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the decision appealed from is AFFIRMED in all other respects. Labor Standards – Hours of Work – OT Pay of a Project Based Employee

In 1977, Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He was assigned to a specific project in Manila. The contract he signed was for 2.3 years. His task was to drive employees to the project from 7am to 4pm. He was allowed to bring home the company vehicle in order to provide a timely transportation service to the other project workers. The project he was assigned to was not completed as scheduled hence, since he has a satisfactory record, he was re-contracted for an additional 10 months. After 10 months the project was not yet completed. Several contracts thereafter were made until the project was finished in 1985. At the completion of the project, Rada was terminated as his employment was co-terminous with the project. He later sued Philnor for non payment of separation pay and overtime pay. He said he is entitled to be paid OT pay because he uses extra time to get to the project site from his home and from the project site to his home everyday – in total, he spends an average of 3 hours OT every day. ISSUE: Whether or not Rada is entitled to separation pay and OT pay. HELD: Separation pay – NO. Overtime pay – Yes. Separation Pay The SC ruled that Rada was a project employee whose work was coterminous with the project for which he was hired. Project employees, as distinguished from regular or non-project employees, are mentioned in Section 281 of the Labor Code as those ‗where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee. ‗Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination.‘ OT Pay Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to Rada‘s job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of Philnor. As embodied in Philnor‘s memorandum, they allowed their drivers to bring home their transport vehicles in order for them to provide a timely transport service and to avoid delay – not really so that the drivers could enjoy the benefits of the company vehicles nor for them to save on fair. 

National Shipyards vs. CIR (G.R No. L-17068, 1961)

Petition filed by the National Shipyards and Steel Corporation (otherwise known as the NASSCO) to review certain orders of the respondent Court of Industrial Relations requiring it to pay its bargeman Dominador Malondras overtime service of 16 hours a day for a period from January 1, 1954 to December 31, 1956, and from January 1, 1957 to April 30, 1957, inclusive. The petitioner NASSCO, a government-owned and controlled corporation, 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 its bargeman could immediately be called to duty whenever their services are needed, they are required to stay in their respective barges, for which reason they are given living quarters therein as well as subsistence allowance of P1.50 per day during the time they are on board. However, upon prior authority of their superior officers, they may leave their barges when said barges are idle. On April 15, 1957, 39 crew members of petitioner's tugboat service, including therein respondent Dominador Malondras, filed with the Industrial Court a complaint for the payment of overtime compensation (Case No. 1059-V). In the course of the proceeding, the parties entered into a stipulation of facts wherein the NASSCO recognized and admitted — 4. That to meet the exigencies of the service in the performance of the above work, petitioners have to work when so required in excess of eight (8) hours a day and/or during Sundays and legal holidays (actual overtime service is subject to determination on the basis of the logbook of the vessels, time sheets and other pertinent records of the respondent).

6. The petitioners are paid by the respondent their regular salaries and subsistence allowance, without additional compensation for overtime work; Pursuant to the above stipulation, the Industrial Court, on November 22, 1957, issued an order directing the court examiner to compute the overtime compensation due the claimants. On February 14, 1958, the court examiner submitted his report covering the period from January 1 to December 31, 1957. In said report, the examiner found that the petitioners in Case No. 1058-V, including herein respondent Dominador Malondras, rendered an average overtime service of five (5) hours each day for the period aforementioned, and upon approval of the report by the Court, all the claimants, including Malondras, were paid their overtime compensation by the NASSCO. Subsequently, on April 30, 1958, the court examiner submitted his second partial report covering the period from January 1, 1954 to December 31, 1956, again giving each crewman an average of five (5) overtime hours each day. Respondent Malondras was not, however, included in this report as his daily time sheets were not then available. Again upon approval by the Court, the crewmen concerned were paid their overtime compensation. Because of his exclusion from the second report of the examiner, and his time sheets having been located in the meantime, Dominador Malondras, on September 18, 1959, filed petitions in the same case asking for the compensation and payment of his overtime compensation for the period from January 1, 1954 to December 31, 1956, and from January to April 30, 1957 which, he alleged, was not included in the first report of the examiner because his time sheets for these

months could not be found at the time. Malondras' petition was opposed by the NASSCO upon the argument, among others, that its records do not indicate the actual number of working hours rendered by Malondras during the periods in question. Acting on the petition and opposition, the Industrial Court ordered the examiner to examine the log books, daily time sheets, and other pertinent records of the corporation for the purpose of determining and computing whatever overtime service Malondras had rendered from January 1, 1954 to December 31, 1956. On January 15, 1960, the chief examiner submitted a report crediting Malondras with a total of 4,349 overtime hours from January 1, 1954 to December 31, 1956, at an average of five (5) overtime hours a day, and after deducting the aggregate amount of subsistence allowance received by Malondras during this period, recommended the payment to him of overtime compensation in the total sum of P2,790.90. On February 20, 1960, the Court ordered the examiner to make a re-examination of the records with a view to determining Malondras' overtime service from January 1, 1954 to December 31, 1956, and from January 1, 1957 to April 30, 1957, but without deducting from the compensation to be paid to him his subsistence allowance. Pursuant to this last order, the examiner, on April 23, 1960, submitted an amended report giving Malondras an average of sixteen (16) overtime hours a day, on the basis of his time sheets, and recommending the payment to him of the total amount of P15,242.15 as overtime compensation during the periods covered by the report. This report was, over the NASSCO's vigorous objections, approved by the Court below on May 6, 1960. The NASSCO moved for reconsideration, which was denied by the Court en banc, with one judge dissenting. Whereupon, the NASSCO appealed to this Court. There appears to be no question that respondent Malondras actually rendered overtime services during the periods covered by the examiner's report. This is admitted in the stipulation of facts of the parties in Case No. 1058-V; and it was on the basis of this admission that the Court below, in its order of November 22, 1957, ordered the payment of overtime compensation to all the petitioners in Case No. 1058-V, including respondent Dominador Malondras, after the overtime service rendered by them had been determined and computed on the basis of the log books, time sheets and other pertinent records of the petitioner corporation. The only matter to be determined here is, therefore, the number of hours of overtime for which Malondras should be paid for the periods January 1, 1954 to December 31, 1956, and from January to April 30, 1957. Respondents urge that this is a question of fact and not subject to review by this Court, there being sufficient evidence to support the Industrial Court's ruling on this point. It appears, however, that in crediting Malondras with 16 hours of overtime service daily for the periods in question, the court examiner relied only on his daily time sheets which, although approved by petitioner's officers in charge and its auditors, do not show the actual number of hours of work rendered by him each day but only indicate, according to the examiner himself, that: almost everyday Dominador Malondras was on "Detail" or "Detailed on Board". According to the officer in charge of Dominador Malondras, when he (Dominador Malondras) was on "Detail" or "Detailed on Board", he was in the boat for twenty-four (24) hours. In other words, the court examiner interpreted the words "Detail" or "Detailed on Board" to mean that as long as respondent Malondras was in his barge for twenty-four hours, he should be paid overtime for sixteen hours a day or the time in excess of the legal eight working hours that he

could not leave his barge. Petitioner NASSCO, upon the other hand, argues that the mere fact that Malondras was required to be on board his barge all day so that he could immediately be called to duty when his services were needed does not imply that he should be paid overtime for sixteen hours a day, but that he should receive compensation only for the actual service in excess of eight hours that he can prove. This question is clearly a legal one that may be reviewed and passed upon by this Court.lawphil.net We can not agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to pay them overtime even when they are not actually working; otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he had spent all those hours resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. We have ruled to that effect in Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union, et al., L-9265, April 29, 1957: I. Is the definition for "hours of work" as presently applied to dryland laborers equally applicable to seamen? Or should a different criterion be applied by virtue of the fact that the seaman's employment is completely different in nature as well as in condition of work from that of a dryland laborer?

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." The requisites contained in this section are further implemented by contemporary regulations issued by administrative authorities (Sections 4 and 5 of Chapter III, Article 1, Code of Rules and Regulations to implement the Minimum Wage Law). For the purposes of this case, we do 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 we understand this term, alaborer 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. (Emphasis supplied)

While Malondras' daily time sheets do not show his actual working hours, nevertheless, petitioner has already admitted in the Stipulation of Facts in this case that Malondras and his coclaimants did render service beyond eight (8) hours a day when so required by the exigencies of the service; and in fact, Malondras was credited and already paid for five (5) hours daily overtime work during the period from May 1 to December 31, 1957, under the examiner's first report. Since Malondras has been at the same job since 1954, it can be reasonably inferred that the overtime service he put in whenever he was required to be aboard his barge all day from 1954 to 1957 would be more or less consistent. In truth, the other claimants who served with Malondras under the same conditions and period have been finally paid for an overtime of 5 hours a day, and no substantial difference exists between their case and the present one, which was not covered by the same award only because Malondras' time records not found until later. The next question is whether or not the subsistence allowance received by Malondras for the periods covered by the report in question should be deducted from his overtime compensation. We do not think so, for the Stipulation of the Facts of the parties show that this allowance is independent of and has nothing to do with whatever additional compensation for overtime work was due the petitioner NASSCO's bargemen. According to the petitioner itself, the reason why their bargemen are given living quarters in their barges and subsistence allowance at the rate of P1.50 per day was because they were required to stay in their respective barges in order that they could be immediately called to duty when their services were needed (Petition, par. 5, p. 2). Petitioner having already paid Malondras and his companions overtime for 1957 without deduction of the subsistence allowances received by them during this period, and Malondras' companions having been paid overtime for the other years also without deducting their subsistence allowances, there is no valid reason why Malondras should be singled out now and his subsistence allowance deducted from the overtime compensation still due him. The last question involves petitioner's claim that it was error for the examiner to base Malondras' overtime compensation for the whole year 1954 at P6.16 a day, when he was appointed in the tubgoat service only on October 1, 1954, and before that was a derrick man with a daily salary of P6.00. In answer, respondent Malondras asserts that the report of the examiner, based on his time sheets from January 1, 1954, show that he had already been rendering overtime service from that date. This answer does not, however, deny that Malondras started to get P6.16 a day only in October, 1954, and was before that time receiving only P6.00 daily, as claimed by petitioner. We think, therefore, that the records should be reexamined to find out Malondras' exact daily wage from January 1, 1954 to September, 1954, and his overtime compensation for these months computed on the basis thereof. WHEREFORE, the order appealed from is modified in the sense that respondent Malondras should be credited five (5) overtime hours instead of sixteen (16) hours a day for the periods covered by the examiner's report. The court below is ordered to determine from the records the exact daily wage received by respondent Malondras from January 1, 1954 to September, 1954, and to compute accordingly his overtime compensation for that period. In all other respects, the judgment appealed from is affirmed. No costs in this instance. So ordered. “Reiterated in the case of National Shipyards and Steel Corporation v .CIR (3 SCRA 890), the SC ruled: We cannot agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their

duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board.”- Cagampan v.NLRC)  Caltex Regular Employees vs. Caltex (G.R No. 111359, 1995)

In this petition for certiorari, petitioner Caltex Regular Employees Association at the Manila Office, Legazpi Bulk Depot and the Marinduque Bulk Depot (hereinafter referred to as "Union"), seeks to annul and set aside the decision of the National Labor Relations Commission ("NLRC"), promulgated on 5 March 1993, which reversed the decision of Labor Arbiter Valentin Guanio. On 12 December 1985, petitioner Union and private respondent Caltex (Philippines), Inc. ("Caltex") entered into a Collective Bargaining Agreement ("1985 CBA") which was to be in effect until midnight of 31 December 1988. The CBA included, among others, the following provision: ARTICLE III HOURS OF WORK In conformity with Presidential Decree 442, otherwise known as the Labor Code of the Philippines, as amended, the regular work week shall consist of eight (8) hours per day, seven (7) days, Monday through Sunday, during which regular rates of pay shall be paid in accordance with Annex B and work on the employee's one "Day of Rest," shall be considered a special work day, during which "Day of Rest" rates of pay shall be paid as provided in Annex B. Daily working schedules shall be established by management in accordance with the requirements of efficient operations on the basis of eight (8) hours per day for any five (5) days. Provided, however employees required to work in excess of forty (40) hours in any week shall be compensated in accordance with Annex B of this Agreement. 1 (Emphasis supplied). Pertinent portions of Annex "B" of the 1985 CBA are also quoted here as follows: Annex "B" Computation of: Regular Day Overtime Night Shift Differential Day Off Excess of 40 hours within a calendar Sunday Premium Holiday Premium Pay Employee's Basic Hourly Wage Rate: Monthly Base Pay Pay Pay Pay Pay week Pay

——————— X = (21.667) (8) A. Regular Pay 1) =X 2) OT = (X + 50% X) 3) NSD = (X + 25% X) Hourly rate

Hourly

Rate

12

MN

6

PM

-

12

MN

4) OT Hourly Rate NSD 6 = (X + 25% X) + 50% (X + 25% X) 5) NSD = (X + 50% X) 12 MN

PM

-

12

MN

-

6

AM

6) OT Hourly Rate NSD = (X + 50% X) + 50% (X + 50% X) B. Regular First Day Off 1. = (X + 50% X)

12

MN

-

6

AM

Hourly

Rate

2. OT Hourly = (X + 50% X) + 50% (x + 50% X) 3. NSD 6 PM = [ (X + 50% X) + 25% (X + 50% X) ] 12

Rate

MN

4. OT Hourly Rate NSD 6 PM - 12 MN = [ (X + 50% X) + 25% (X + 50% X) ] + 50% [ (X + 50% X) + 25% (X + 50%) ] 5. NSD 12 MN = [ (X + 50% X) + 50% (X + 50% X) ] 6 AM

6. OT Hourly Rate NSD 12 MN - 6 AM = [ (X + 50% X) + 50% (X + 50% X) ] + 50% [ (X + 50% X) + 50% (X + 50% X) ] C. Regular Second Day Off 1. = (X + 100% X) Hourly Rate

2. OT Hourly = (X + 100% X) + 50% (X + 100% X) 3. NSD 6 PM = [ (X + 100% X) + 25% (X + 100%) ] -

Rate

12MN

4. OT Hourly Rate NSD 6 PM - 12 MN = [ (X + 100% X) + 25% (X + 100% X) ] + 50% [ (X + 100% X) + 25% (X + 100% X) ] 5. NSD 12 MN = [ (X + 100% X) + 50% (X + 100% X) ] 6 AM

6. OT Hourly Rate NSD 12 MN - 6 AM = [ (X + 100% X) + 50% (X + 100% X) ] + 50% [ (X + 100% X) + 50% (X + 100% X) ] D. Excess of 40 Hours within a Calendar Week 1. = (X + 50% X) Hourly Rate

2. OT Hourly = (X + 50% X) + 50% (X + 50% X) 3. NSD 6 PM = [ (X + 50% X) + 25% (X + 50% X) ] -

Rate

12MN

4. OT Hourly Rate NSD 6 PM - 12 MN = [ (X + 50% X) + 25% (X + 50% X) ] + 50% [ (X + 50% X) + 25% (X + 50% X) ] 5. NSD 12 MN = [ (X + 50% X) + 50% (X + 50% X) ] 6 AM

6. OT Hourly Rate NSD 12 MN - 6 AM = [ (X + 50% X) + 50% (X + 50% X) ] + 50% [ (X + 50% X) + 50% (X + 50% X) ] E. Sunday as a Normal Work Day 1. = (X + 100% X) Hourly Rate

2. OT Hourly = (X + 100% X) + 50% (X + 100% X) 3. NSD 6 PM = [ (X + 100% X) + 25% (X + 100% X) ] 12

Rate

MN

4. OT Hourly Rate NSD 6 PM - 12 MN = [ (X + 100% X) + 25% (X + 100% X) ] + 50% [ (X + 100% X) + 25% (X + 100% X) ] 5. NSD 12 MN = [ (X + 100% X) + 50% (X + 100% X) ] 6 AM

6. OT Hourly Rate NSD 12 MN - 6 AM = [ (X + 100% X) + 50% (X + 100% X) ] + 50% [ (X + 100% X) + 50% (X + 100% X) ] F. Sunday as day off 1. = (X + 100% X) Hourly Rate

2. OT Hourly = (X + 100% X) + 50% (X + 100% X) 3. NSD 6 PM = [ (X + 100% X) + 25% (X+ 100% X) ] 12

Rate

MN

4. OT Hourly Rate NSD 6 PM - 12 MN = [ (X + 100% X) + 25% (X + 100% X) ] + 50% [ (X+ 100% X) + 25% (X + 100% X) ] 5. NSD 12 MN = [ (X + 100% X) + 50% (X + 100% X) ] 6 AM

6. OT Hourly Rate NSD 12 MN - 6 AM = [ (X + 100% X) + 50% (X + 100% X) ] + 50% [ (X + 100% X) + 50% (X + 100% X) ] G. Holiday as Normal Work Day 1. = (X + 150% X) Hourly Rate

2. OT Hourly = (X + 150% X) + 50% (X + 150% X) 3. NSD 6 PM = [ (X + 150% X) + 25% (X + 150% X) ] 12

Rate

MN

4. OT Hourly Rate NSD 6 PM - 12 MN = [ (X + 150% X) + 25% (X + 150% X) ] + 50% [ (X + 150% X) + 25% (X + 150% X) ]

5. NSD 12 MN = [ (X + 150% X) + 50% (X + 150% X) ]

6

AM

6. OT Hourly Rate NSD 12 MN - 6 AM = [ (X + 150% X) + 50% (X + 150% X) ] + 50% [ (X + 150% X) + 50% (X + 150% X) ] H. Holiday as Day Off 1. = (X + 150% X) Hourly Rate

2. OT Hourly = (X + 150% X) + 50% (X + 150% X) 3. NSD 6 PM = [ (X + 150% X) + 25% (X + 150% X) ] 12

Rate

MN

4. OT Hourly Rate NSD 6 PM - 12 MN = [ (X + 150% X) + 25% (X + 150% X) ] + 50% [ (X + 150% X) + 25% (X + 150% X) ] 5. NSC 12 MN = [ (X + 150% X) + 50% (X + 150% X) ] 6 AM

6. OT Hourly Rate = [ (X + 150% X) + 50% (X + 150% X) ] + 50% [ (X + 150% X) + 50% (X + 150% X) ] 7. * Hourly = (150% X) Rate for less than 8 hours

* For work of less than 8 hours, the employee will receive his basic daily rate — (Monthly Base Pay) ——————— 21.667 plus the hourly rate multiplied by the number of hours worked. 2 Sometime in August 1986, the Union called Caltex's attention to alleged violations by Caltex of Annex "B" of the 1985 CBA, e.g. non-payment of night-shift differential, non-payment of overtime pay and non-payment at "first day-off rates" for work performed on a Saturday. Caltex's Industrial Relations manager immediately evaluated petitioner's claims and accordingly informed petitioner Union that differential payments would be timely implemented. In the implementation of the re-computed claims, however, no differential payment was made with respect to work performed on the first 2 1/2 hours on a Saturday.

On 7 July 1987, the Union instituted a complaint for unfair labor practice against Caltex alleging violation of the provisions of the 1985 CBA. Petitioner Union charged Caltex with shortchanging its employees when Caltex compensated work performed on the first 2 1/2 hours of Saturday, an employees' day of rest, at regular rates, when it should be paying at "day of rest" or "day off" rates. Caltex denied the accusations of the Union. It averred that Saturday was never designated as a day of rest, much less a "day-off". It maintained that the 1985 CBA provided only 1 day of rest for employees at the Manila Office, as well as employees similarly situated at the Legazpi and Marinduque Bulk Depots. This day of rest, according to Caltex, was Sunday. In due time, the Labor Arbiter ruled in favor of petitioner Union, while finding at the same time that private respondent Caltex was not guilty of any unfair labor practice. Labor Arbiter Valentin C. Guanio, interpreting Article III and Annex "B" of the 1985 CBA, concluded that Caltex's employees had been given two (2) days (instead of one [1] day) of rest, with the result that work performed on the employee's first day of rest, viz. Saturday, should be compensated at "First day-off" rates. On appeal by Caltex, public respondent NLRC set aside the decision of Labor Arbiter Guanio. The NLRC found that the conclusions of the Labor Arbiter were not supported by the evidence on record. The NLRC, interpreting the provisions of the 1985 CBA, concluded that that CBA granted only one (1) day of rest, e.g., Sunday. The Union's motion for reconsideration was denied on 9 June 1993. The controversy we must address in this Petition for Certiorari relates to the appropriate interpretation of Article III in relation to Annex "B" of the parties' 1985 CBA. After carefully examining the language of Article III, in relation to Annex "B" of the 1985 CBA, quoted in limine, as well as relevant portions of earlier CBAs between the parties, we agree with the NLRC that the intention of the parties to the 1985 CBA was to provide the employees with only one (1) day of rest. The plain and ordinary meaning of the language of Article III is that Caltex and the Union had agreed to pay "day of rest" rates for work performed on "an employee's one day of rest". To the Court's mind, the use of the word "one" describing the phrase "day of rest [of an employee]" emphasizes the fact that the parties had agreed that only a single day of rest shall be scheduled and shall be provided to the employee. It is useful to note that the contract clauses governing hours of work in previous CBAs executed between private respondent Caltex and petitioner Union in 1973, 1976, 1979 and 1982 contained provisions parallel if not identical to those set out in Article III of the 1985 CBA here before us. Article III of the 1973 Collective Bargaining Agreement 3 provided as follows: Article III Hours of Work Sec. 1. In conformity with Presidential Decree No. 143, the regular work week shall consist of eight (8) hours per day, seven (7) days, Monday through Sunday, during which regular rates of pay shall be paid in accordance with Article IV, Section 1 and work

on the employee's one "Day of Rest" shall be paid as provided in Article IV, Section 8. Daily working schedules shall be established by management in accordance with the requirements of efficient operations on the basis of eight (8) hours per day for any five (5) days; provided, however, employees required to work in excess of forty (40) hours in any week shall be compensated in accordance with Article IV, Section 7 of this Agreement. (Emphasis supplied) Article III of the 1976 Collective Bargaining Agreement 4 read: Article III Hours of Work Sec. 1. In conformity with Presidential Decree No. 143, the regular work week shall consist of eight (8) hours per day, seven (7) days, Monday through Sunday, during which regular rates of pay shall be paid in accordance with Article IV, Section 1 and work on the employee's one "Day of Rest" shall be paid as provided in Article IV, Section 8. Daily working schedules shall be established by management in accordance with the requirements of efficient operations on the basis of eight (8) hours per day for any five (5) days; provided, however, employees required to work in excess of forty (40) hours in any week shall be compensated in accordance with Article IV, Section 7 of this Agreement. (Emphasis supplied) Article III of the 1979 Collective Bargaining Agreement 5 said: Article III Hours of Work Sec. 1. In conformity with Presidential Decree 442, otherwise known as the Labor Code of the Philippines, as mended, the regular work week shall consist of eight (8) hours per day, seven (7) days, Monday thru Sunday during which regular rates of pay shall be paid in accordance with Article IV, Section 1 and work on the employee's one "Day of Rest" shall be paid as provided in Article IV, Section 7. Daily working schedules shall be established by management in accordance with the requirements of efficient operations on the basis of eight hours per day for any five (5) days; provided, however, employees required to work in excess of forty (40) hours in any week shall be compensated in accordance with Article IV, Section 6 of this Agreement. (Emphasis supplied). Article III of the 1982 Collective Bargaining Agreement 6 also provided as follows: Article III Hours of Work Sec. 1. In conformity with Presidential Decree 442, otherwise known as the Labor Code of the Philippines, as amended, the regular work week shall consist of eight (8) hours per day, seven (7) days, Monday thru Sunday, during which regular rates of pay shall be

paid in accordance with Article IV, Section 1 and work on the employee's one "Day of Rest" shall be paid as provided in Article IV, Section 7. Daily working schedules shall be established by management in accordance with the requirements of efficient operations on the basis of eight hours per day for any five (5) days;provided, however employees required to work in excess of forty (40) hours in any week shall be compensated in accordance with Article IV, Section 6 of this Agreement. (Emphasis supplied) In all these CBAs (1973, 1976, 1979, 1982), Article III provide that only "work on an employee's one day of rest "shall be paid on the basis of "day of rest rates". The relevant point here is that petitioner Union had never suggested that more than 1 day of rest had been agreed upon, and certainly Caltex had never treated Article III or any other portion of the CBAs as providing two (2) days of rest. It is well settled that the contemporaneous and subsequent conduct of the parties may be taken into account by a court called upon to interpret and apply a contract entered into by them. 7 We note that Labor Arbiter Guanio surmised that the intention he implied from the contents of Annex "B" was in conflict with the intention expressed in Article III (which, the Labor Arbiter admitted, stipulated only one day of rest). According to the Labor Arbiter, when Annex "B" referred to "First Day-off Rates" and "Second Day-off Rates", these were meant to express an agreement that the parties intended to provide employees two (2) days of rest. He then declared that Annex "B" should prevail over Article III because the former was a more specific provision than the latter. An annex expresses the idea of joining a smaller or subordinate thing with another, larger or of higher importance. 8 An annex has a subordinate role, without any independent significance separate from that to which it is tacked on. Annex "B," in the case at bar, is one such document. It is not a memorandum of amendments or a codicil containing additional or new terms or stipulations. Annex "B" cannot be construed as modifying or altering the terms expressed in the body of the agreement contained in the 1985 CBA. It did not confer any rights upon employees represented by petitioner Union; neither did it impose any obligations upon private respondent Caltex. In fact, the contents of Annex "B" have no intelligible significance in and of themselves when considered separately from the 1985 CBA. Moreover, we are persuaded by private respondent's argument that Annex "B" was intended to serve as acompany wide guide in computing compensation for work performed by all its employees, including but not limited to the Manila Office employees represented by petitioner Union. Private respondent also points out that the mathematical formulae contained in Annex "B" are not all applicable to all classes of employees, there being some formulae applicable only to particular groups or classes of employees. Thus, "First Day-off rates" and "Second Day-off rates" are applicable only to employees stationed at the refinery and associated facilities like depots and terminals which must be in constant twenty-four (24) hours a day, seven (7) days a week, operation, hence necessitating the continuous presence of operations personnel. The work of such operations personnel required them to be on duty for six (6) consecutive days. Upon the other hand, "First Day-off rates" and "Second Day-off rates" are not applicable to personnel of the Manila Office which consisted of other groups or categories of employees ( e.g., office clerks, librarians, computer operators, secretaries, collectors, etc.), 9 since the nature of their work did not require them to be on duty for six (6) consecutive days.

We find, under the foregoing circumstances, that the purported intention inferred from Annex "B" by the Labor Arbiter was based merely on conjecture and speculation. We also note that the Labor Arbiter merely suspected that the parties agreed to provide two (2) days of rest on the ground that they had so stipulated in their 1970 CBA. 10 A principal difficulty with this view is that it disregards the fact that Article III of the 1985 CBA no longer contained a particular proviso found in the 1970 CBA. In fact, all the CBAs subsequent to 1970 (1973, 1976, 1979, 1982) had similarly deleted the proviso in the 1970 CBA providing for two (2) days-off. To the Court's mind, such deletion means only one thing — that is — the parties had agreed to remove such stipulation. Accordingly, the proviso found in Article III of the 1970 CBA ceased to be a demandable obligation. Petitioner Union cannot now unilaterally re-insert such a stipulation by strained inference from Annex "B." Upon the foregoing circumstances, we must hold that the Labor Arbiter's suspicion is without basis in the facts of record. Petitioner Union also contended that private respondent Caltex in the instant petition was violating the statutory prohibition against off-setting undertime for overtime work on another day. 11 Union counsel attempted to establish this charge by asserting that the employees had been required to render "overtime work" on a Saturday but compensated only at regular rates of pay, because they had not completed the eight (8)-hour work period daily from Monday thru Friday. The Court finds petitioner's contention bereft of merit. Overtime work consists of hours worked on a given day in excess of the applicable work period, which here is eight (8) hours. 12 It is not enough that the hours worked fall on disagreeable or inconvenient hours. In order that work may be considered as overtime work, the hours worked must be in excess of and in addition to the eight (8) hours worked during the prescribed daily work period, or the forty (40) hours worked during the regular work week Monday thru Friday. In the present case, under the 1985 CBA, hours worked on a Saturday do not, by that fact alone, necessarily constitute overtime work compensable at premium rates of pay, contrary to petitioner's assertion. These are normal or regular work hours, compensable at regular rates of pay, as provided in the 1985 CBA; under that CBA, Saturday is not a rest day or a "day off". It is only when an employee has been required on a Saturday to render work in excess of the forty (40) hours which constitute the regular work week that such employee may be considered as performing overtime work on that Saturday. We consider that the statutory prohibition against offsetting undertime one day with overtime another day has no application in the case at bar. 13 Petitioner's counsel, in his final attempt to lay a basis for compelling private respondent to pay premium rates of pay for all hours worked on a Saturday, regardless of the number of hours actually worked earlier during the week, i.e., on Monday to Friday, insists that private respondent cannot require its employees to complete the 40-hour regular work week on a Saturday, after it has allowed its employees to render only 37-1/2 hours of work. The company practice of allowing employees to leave thirty (30) minutes earlier than the scheduled off-time had been established primarily for the convenience of the employees most of whom have had to commute from work place to home and in order that they may avoid the heavy rush hour vehicular traffic. There is no allegation here by petitioner Union that such practice was resorted to by Caltex in order to escape its contractual obligations. This practice, while it effectively reduced to 37-1/2 the number of hours actually worked by employees who had opted to leave ahead of off-time, is not be construed as modifying the other terms of the

1985 CBA. As correctly pointed out by private respondent, the shortened work period did not result in likewise shortening the work required for purposes of determining overtime pay, as well as for purposes of determining premium pay for work beyond forty (40) hours within the calendar week. It follows that an employee is entitled to be paid premium rates, whether for work in excess of eight (8) hours on any given day, or for work beyond the forty (40)-hour requirement for the calendar week, only when the employee had, in fact already rendered the requisite number of hours — 8 or 40 — prescribed in the 1985 CBA. In recapitulation, the parties' 1985 CBA stipulated that employees at the Manila Office, as well as those similarly situated at the Legazpi and Marinduque Bulk Depots, shall be provided only one (1) day of rest; Sunday, and not Saturday, was designated as this day of rest. Work performed on a Saturday is accordingly to be paid at regular rates of pay, as a rule, unless the employee shall have been required to render work in excess of forty (40) hours in a calendar week. The employee must, however, have in fact rendered work in excess of forty (40) hours before hours subsequently worked become payable at premium rates. We conclude that the NLRC correctly set aside the palpable error committed by Labor Arbiter Guanio, when the latter imposed upon one of the parties to the 1985 CBA, an obligation which it had never assumed. WHEREFORE, petitioner Union having failed to show grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondent National Labor Relations Commission in rendering its decision dated 5 March 1993, the Court Resolved to DISMISS the Petition for lack of merit.



Cagampan vs. NLRC (G.R No.85122-24, 1991)

Presented before Us for review is the decision of public respondent National Labor Relations Commission handed down on March 16, 1988 reversing the decision of the Philippine Oversees Employment Administration and correspondingly dismissing the cases for lack of merit. The POEA decision granted overtime pay to petitioners equivalent to 30% of their basic pay. We do not dispute the facts as found by the Solicitor General. Thus: On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts of employment with the Golden Light Ocean Transport, Ltd., through its local agency, private respondent ACE MARITIME AGENCIES, INC. Petitioners, with their respective ratings and monthly salary rates, are as follows: Petitioners Rating Salary per month Julio Cagampan 2nd Engineer US$500.00 Silvino Vicera 2nd Engineer US$800.00 Juanito de Jesus Ordinary Seaman US$120.00 Jorge C. de Castro Ordinary Seaman US$160.00 Arnold Miranda 3rd Officer US$310.00

Maximo Rosello Cook US$230.00 Aniceto Betana 3rd Engineer US$400.00 Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986. Thereafter, petitioners collectively and/or individually filed complaints for nonpayment of overtime pay, vacation pay and terminal pay against private respondent. In addition, they claimed that they were made to sign their contracts in blank. Likewise, petitioners averred that although they agreed to render services on board the vessel Rio Colorado managed by Golden Light Ocean Transport, Ltd., the vessel they actually boarded was MV "SOIC I" managed by Columbus Navigation. Two (2) petitioners, Jorge de Castro and Juanito de Jesus, charged that although they were employed as ordinary seamen (OS), they actually performed the work and duties of Able Seamen (AB). Private respondent was furnished with copies of petitioners' complaints and summons, but it failed to file its answer within the reglementary period. Thus, on January 12, 1987, an Order was issued declaring that private respondent has waived its right to present evidence in its behalf and that the cases are submitted for decision (Page 68, Records). On August 5, 1987, the Philippine Overseas Employment Administration (POEA) rendered a Decision dismissing petitioners' claim for terminal pay but granted their prayer for leave pay and overtime pay. The dispositive portion of the Decision reads: IN VIEW OF THE FOREGOING, judgment is hereby rendered ordering respondent (private respondent) Ace Maritime Agencies, Inc. to pay the following complainants (petitioners) in the amounts opposite their names: 1. Julio Cagampan—US$583.33 plus US$2,125.00 representing the 30% guaranteed overtime pay; 2. Silvino Vicera—US$933.33 plus US$3,400.00 representing the 30% guaranteed overtime pay; 3. Jorge de Castro—US$233.33 plus US$850.00 representing the 30% guaranteed overtime pay; 4. Juanito de Jesus—US$233.33 plus US$850.00 representing the 30% guaranteed overtime pay; 5. Lauro Diongzon—US$233.33 plus US$850.00 representing the 30% guaranteed overtime pay; 6. Arnold Miranda—US$455.00 plus US$1,659.50 representing the 30% guaranteed overtime pay;

7. Maximo Rosello—US$303.33 plus US$1,105.00 representing the 30% guaranteed overtime pay; and 8. Aniceto Betana—US$583.33 plus US$2,125.00 representing the 30% guaranteed overtime pay. The payments represent their leave pay equivalent to their respective salary (sic) of 35 days and should be paid in Philippine currency at the current rate of exchange at the time of actual payment. (pp. 81-82, Records) Private respondent appealed from the POEA's Decision to the NLRC on August 24, 1987. On March 16, 1988, the NLRC promulgated a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET ASIDE and another one entered dismissing these cases for lack of merit. (p. 144, Records) On May 8, 1988, petitioners filed an Urgent Motion for Reconsideration of the NLRC's Decision (p. 210, Records), but the same was denied by the NLRC for lack of merit in its Resolution dated September 12, 1988 (p. 212, Records). Hence, this appeal from the decision and resolution of the respondent NLRC. Petitioners allege that respondent Commission gravely abused its discretion or erred in deciding in favor of private respondent company by reason of the following: 1. Respondent NLRC overlooked the fact that private respondent company had repeatedly failed and refused to file its answer to petitioners' complaints with their supporting documents. 2. Respondent Commission erred in reversing and setting aside the POEA decision and correspondingly dismissing the appeal of petitioners, allegedly in contravention of law and jurisprudence. Private respondent maritime company disclaims the aforesaid allegations of petitioners through these arguments: 1. As borne out by the records, its former counsel attended all the hearings before the POEA wherein he raised the basis objection that the complaint of petitioners was so generally couched that a more detailed pleading with supporting documents was repeatedly requested for the latter to submit. 2. The NLRC never abused its discretion in arriving at assailed decision considering that the same was based on the Memorandum on Appeal dated August 14, 1987 filed by private respondent. 3. In the hearings conducted by respondent Commission, all the arguments of both parties were properly ventilated and considered by said Commission in rendering its decision.

4. The Labor Code basically provides that the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of the Code that the Commission and its members and Labor Arbiters should use every and an reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law and procedure, all in the interest of due process. 5. Petitioners' motion for reconsideration of the NLRC decision did not invoke the merits of the case but merely raised purely technical and procedural matters. Even assuming that private respondent, technically speaking, waived the presentation of evidence, its appeal to the NLRC was valid since it involved merely a correct interpretation and clarification of certain provisions of the contract the validity of which has never been questioned. The Solicitor General, arguing for public respondent NLRC, contends: 1. Petitioners' assumption that a party who is declared to have waived his right to present evidence also loses his right to appeal from an adverse judgment made against him is a falsity for, although the technical rules of evidence prevailing in the courts of law or equity do not bind labor tribunals, even the Rules of Court allows a party declared in default to appeal from said judgment by attaching the propriety of the relief awarded therein. 2. The NLRC did not abuse its discretion in the rendition of subject decision because the evidence presented by petitioners in support of their complaint is by itself sufficient to back up the decision. The issue of the disallowance of overtime pay stems from an interpretation of particular provisions of the employment contract. We cannot sustain petitioners' position. The failure of respondent to submit its responsive pleading was not fatal as to invalidate its case before the Phil. Overseas Employment Authority. Evidently, such formal or technical defect was rectified by the fact that the POEA proceeded with the hearings on the case where both parties were given sufficient leeway to ventilate their cases. Petitioners' manifest pursuit of their claims before the POEA in the absence of the answer produced the effect of condoning the failure of private respondent to submit the said answer. Their submission to the POEA's authority without questioning its jurisdiction to continue the hearings further strengthens the fact that the alleged technical defect had already been cured. After all, what is there to complain of when the POEA handed down a decision favorable to petitioners with the allowance of the latter's leave pay and overtime pay. Notably, it was only when private respondent appealed the NLRC decision to this Court that petitioners suddenly unearth the issue of private respondent's default in the POEA case. Had the decision favoring them not been reversed by the NLRC, petitioners could have just clammed up. They resorted to bringing up a technical, not a substantial, defect in their desperate attempt to sway the Court's decision in their favor. Private respondent has pointedly argued that the NLRC anchored its decision primarily upon the Memorandum on Appeal. In the case of Manila Doctors Hospital v. NLRC (153 SCRA 262) this Court ruled that the National Labor Relations Commission and the Labor Arbiter have authority under the Labor Code to decide a case based on the position papers and documents submitted without resorting to the technical rules of evidence.

On the issue of whether or not petitioners should be entitled to terminal pay, We sustain the finding of respondent NLRC that petitioners were actually paid more than the amounts fixed in their employment contracts. The pertinent portion of the NLRC decision reads as follows. On this award for leave pay to the complainants (petitioners), the (private) respondent maintains that the actually they were paid much more than what they were legally entitled to under their contract.This fact has not been disputed by the complainants (petitioners.) Thus, as mentioned in (private) respondent's Memorandum on Appeal dated 14 August 1987, their overpayment is more than enough and sufficient to offset whatever claims for leave pay they filed in this case and for which the POEA favorably considered in their favor. For complainant (petitioner) Aniceto Betana, it appears that under the crew contract his monthly salary was US$400 while he was overpaid by US$100 as he actually received US$500. In fine, Betana had received at least US1,400 excess salary for a period of fourteen (14) months which was the period of his employment. In the case of complainant (petitioner) Jorge C.de Castro his stipulated monthly pay was US$160 but he actually received a monthly pay of US$200 or an overpayment of US$560 for the same period of service. For complainant (petitioner) Juanito R.de Jesus, his overpayment is US$1120. Complainant (petitioner) Arnold J. Miranda has also the same amount of excess payment as de Jesus. Indeed, We cannot simply ignore this material fact. It is our duty to prevent a miscarriage of justice for if We sustain the award for leave pay in the face of undisputed facts that the complainants (petitioners) were even paid much more than what they should receive by way of leave pay, then they would be enriching themselves at the expense of others. Accordingly, justice and equity compel Us to deny this award. Even as the denial of petitioners' terminal pay by the NLRC has been justified, such denial should not have been applied to petitioners Julio Cagampan and Silvino Vicera. For, a deeper scrutiny of the records by the Solicitor General has revealed that the fact of overpayment does not cover the aforenamed petitioners since the amounts awarded them were equal only to the amounts stipulated in the crew contracts. Since petitioners Cagampan and Vicera were not overpaid by the company, they should be paid the amounts of US$583.33 and US$933.33, respectively. Further examination by the Solicitor General shows that petitioner Maximo Rosello was also overpaid in the amount of US$420.00. Hence, with respect to petitioners Cagampan and Vicera, the NLRC decision must be modified correspondingly. As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the payment of said pay because it merely straightened out the distorted interpretation asserted by petitioners and defined the correct interpretation of the provision on overtime pay embodied in the contract conformably with settled doctrines on the matter. Notably, 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. Petitioners have conveniently adopted the view that the "guaranteed or fixed overtime pay of 30% of the basic salary per month" embodied in their employment contract should be awarded to them as part of a "package benefit." They have theorized that even without sufficient evidence of actual rendition of overtime work, they would automatically be entitled to overtime

pay. Their theory is erroneous for being illogical and unrealistic. Their thinking even runs counter to the intention behind the provision. The contract provision means that the fixed overtime pay of 30% would be the basis for computing the overtime pay if and when overtime work would be rendered. Simply, stated, the rendition of overtime work and the submission of sufficient proof that said work was actually performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, 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 his job, stays on board a ship or vessel beyond the regular eight-hour work schedule. For the employer to give him overtime pay for the extra hours when he might be sleeping or attending to his personal chores or even just lulling away his time would be extremely unfair and unreasonable. We already resolved the question of overtime pay of a worker aboard a vessel in the case of National Shipyards and Steel Corporation v. CIR (3 SCRA 890). We ruled: We can not agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to pay them overtime even when they are not actually working; otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he spent all those hours resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. (Emphasis supplied) The aforequoted ruling is a reiteration of Our resolution in Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union, et al. (G.R. No. 9265, April 29, 1957). WHEREFORE, the decision of the NLRC is hereby AFFIRMED with the modification that petitioners Cagampan and Vicera are awarded their leave pay according to the terms of the contract. BRIEF: Presented before the SC for review is the decision of public respondent National Labor Relations Commission handed down on March 16, 1988 reversing the decision of the Philippine Oversees Employment Administration and correspondingly dismissing the cases for lack of merit. The POEA decision granted overtime pay to petitioners equivalent to 30% of their basic pay. FACTS: On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts of employment with the Golden Light Ocean Transport, Ltd., through its local agency, private respondent ACE MARITIMEAGENCIES, INC. with their respective ratings and monthly salary rates. Petitioners were deployed on May 7,1985, and discharged on July 12, 1986. Thereafter,

petitioners collectively and/or individually filed complaints for non-payment of overtime pay, vacation pay and terminal pay against private respondent. In addition, they claimed that they were made to sign their contracts in blank; that although they agreed to render services onboard the vessel Rio Colorado managed by Golden Light Ocean Transport, Ltd., the vessel they actually boarded was MV "SOIC I" managed by Columbus Navigation; and more so, petitioners de Castro and de Jesus charged that although they were employed as ordinary seamen, they actually performed the work and duties of Able Seamen. Private respondent was furnished with copies of petitioners' complaints and summons, but it failed to file its answer within the reglementary period. Thus, on January 12, 1987, an Order was issued declaring that private respondent has waived its right to present evidence in its behalf and that the cases are submitted for decision. On August 5, 1987, the Philippine Overseas Employment Administration (POEA) rendered a Decision DISMISSING petitioners' claim for terminal pay but GRANTED their prayer for leave pay and overtime pay. Private respondent appealed from the POEA's Decision to the NLRC on August 24, 1987. On March 16, 1988,the NLRC promulgated a Decision, REVERSING and SETTING ASIDE and another one entered dismissing the cases for lack of merit. On May 8, 1988, petitioners filed an Urgent Motion for Reconsideration of the NLRC's Decision but the same was denied by the NLRC for lack of merit in its Resolution dated September 12, 1988. Hence, this appeal from the decision and resolution of the respondent NLRC. Petitioners allege that respondent Commission, NLRC, gravely abused its discretion or erred in reversing and setting aside the POEA decision and correspondingly dismissing the appeal of petitioners, allegedly in contravention of law and jurisprudence. Private respondent maritime company disclaims the aforesaid allegations of petitioners. The Solicitor General, arguing for public respondent NLRC, contends that: The NLRC did not abuse its discretion in the rendition of subject decision because the evidence presented by petitioners in support of their complaint is by itself sufficient to back up the decision. The issue of the disallowance of overtime pay stems from an interpretation of particular provisions of the employment contract. ISSUE: WON respondent Commission NLRC gravely abused its discretion or erred in REVERSING the decision of POEA (in granting overtime pay to petitioners equivalent to 30% of their basic pay). HELD: No. RATIO DECIDENDI: The NLRC cannot be faulted for disallowing the payment of overtime pay because it merely straightened out the distorted interpretation asserted by petitioners and defined the correct interpretation of the provision on overtime pay embodied in the contract conformably with settled doctrines on the matter. Notably, 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. Petitioners have conveniently adopted the view that the "guaranteed or fixed

overtime pay of 30% of the basic salary per month" embodied in their employment contract should be awarded to them as part of a "package benefit." They have theorized that even without sufficient evidence of actual rendition of overtime work, they would automatically be entitled to overtime pay. Their theory is erroneous for being illogical and unrealistic. Their thinking even runs counter to the intention behind the provision. The contract provision means that The fixed overtime pay of 30% would be the basis for computing the overtime pay if and when overtime work would be rendered .Simply, stated, the rendition of overtime work and the submission of sufficient proof that said work was actually performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, 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 his job, stays on board a ship or vessel beyond the regular eight-hour work schedule. For the employer to give him overtime pay for the extra hours when he might be sleeping or attending to his personal chores or even just lulling away his time would be extremely unfair and unreasonable. Reiterated in the case of National Shipyards and Steel Corporation v .CIR (3 SCRA 890), the SC ruled: We cannot agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to pay them overtime even when they are not actually working; otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he spent all those hours resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and cannot leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours

E. Wages 1. Concept and Definition A. Article 97(f) (Labor Code) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an

employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include any profit to the employer, or to any person affiliated with the employer. B. Article 98 (Labor Code) Application of Title. This Title shall not apply to farm tenancy or leasehold, domestic service and persons working in their respective homes in needle work or in any cottage industry duly registered in accordance with law. C. Book III, Rule VII, Sections 2-9 of the Omnibus Implementing Rules SECTION 2. Effectivity. — The Act takes effect on July 1, 1989, 15 days following its complete publication in two newspapers of general circulation on June 15, 1989 pursuant to Section 15 thereof.. SECTION 3. Amount of Minimum Wage Increase. — Effective July 1, 1989, the daily statutory minimum wage rates of covered workers and employees shall be increased as follows: a) P25.00 for those in the National Capital Region; b) P25.00 for those outside the National Capital Region, except for the following: P20.00 for those in plantation agricultural enterprises with an annual gross sales of less than P5 million in the fiscal year immediately preceding the effectivity of the Act; P15.00 for those in the following enterprises: 1. Non-plantation agriculture 2. Cottage/handicraft 3. Retail/Service regularly employing not more than 10 workers 4. Business enterprises with a capitalization of not more than P500,000 and employing not more than 20 workers.. SECTION 4. When Wage Increase Due Other Workers. — a) All workers and employees who, prior to July 1, 1989, were already receiving a basic wage above the statutory minimum wage rates provided under Republic Act 6640 but not over P100.00 per day shall receive a wage increase equivalent to that provided in the preceding Section.. b) Those receiving not more than the following monthly basic wage rates prior to July 1, 1989 shall be deemed covered by the preceding subsection: (i) P3,257.50 — where the workers and employees work everyday, including premium payments for Sundays or rest days, special days and regular holidays..

(ii) P3,041.67 — where the workers and employees do not work but considered paid on rest days, special days and regular holidays.. (iii) P2,616.67 — where the workers and employees do not work and are not considered paid on Sundays or rest days.. (iv) P2,183.33 — where the workers and employees do not work and are not considered paid on Saturdays and Sundays or rest days.. c) Workers and employees who, prior to July 1, 1989, were receiving a basic wage of more than P100.00 per day or its monthly equivalent, are not by law entitled to the wage increase provided under the Act. They may however, receive wage increases through the correction of wage distortions in accordance with Section 16, Chapter I of these Rules.. SECTION 5. Daily Statutory Minimum Wage Rates. — The daily minimum wage rates of workers and employees shall be as follows: Sector/Industry Under Under

R. A. 6640 (Effective Dec. 14, 1987)

R. A. 6727 (Effective July 1, 1989)

A. NATIONAL CAPITAL REGION Non-Agriculture Agriculture Plantation Non-Plantation Cottage/Handicraft Employing more than 30 workers 52.00 77.00 54.00 43.50 79.00 68.50 P64.00 P89.00

Employing not more than 30 workers Private Hospitals With bed capacity of more 50.00 75.00

than 100

64.00

89.00

With bed capacity of 100 or less Retail/Service Employing more than 15 workers 64.00 89.00 60.00 85.00

Employing 11 to 15 workers 60.00 85.00

Employing not more than 10 workers 43.00 68.00

B. OUTSIDE NATIONAL CAPITAL REGION Non-Agriculture Agriculture Plantation with annual gross sales of P5M or more Plantation with annual gross sales of less than P5M Non-plantation Cottage/Handicraft Employing more than 30 workers 52.00 67.00 43.50 54.00 58.50 74.00 54.00 79.00 64.00 89.00

Employing not more than 30 workers Private Hospitals Retail/Service Cities w/ population of more 50.00 60.00 65.00 85.00

than 150,000 Employing more than 15 workers 64.00 89.00 85.00

Employing 11 to 15 workers 60.00 Employing not more than 10 workers Sugar Mills Agriculture Plantation w/ annual gross sales of P5M or more 48.50 43.00 58.00

73.50

Plantation w/ annual gross sales of less than P5M Non-plantation 43.50 48.50 58.50 68.50

Business Enterprises w/ Capitalization of not more than P500,000 and employing not more than 20 workers Non-Agriculture 64.00 79.00

Agriculture Plantation Products Other than Sugar Sugar Private Hospitals Retail/Service Cities w/ population of more than 150,000 Employing more than 15 workers 64.00 79.00 48.50 60.00 54.00 63.50 75.00 69.00

Employing 11 to 15 workers Municipalities and Cities w/ population of not more than 150,000 Employing more than 10 workers 60.00

60.00

75.00

75.00

SECTION 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum Wage Rates. — Without prejudice to existing company practices, agreements or policies, the following formula may be used as guides in determining the equivalent monthly statutory minimum wage rates: a) For those who are required to work everyday including Sundays or rest days, special days and regular holidays: Equivalent Applicable daily wage rate (ADR) x 390.90 days Monthly = ——————————————————— Rate (EMR) 12 Where 390.90 days = 302 days Ordinary working days 20 days 10 regular holidays x 200% 66.30 days 51 rest days x 130% 2.60 days 2 special days x 130% 390.90 days Total equivalent number of days. b) For those who do not work but considered paid on rest days, special days and regular holidays: ADR x 365 days EMR = ———————— 12 Where 365 days = 302 days Ordinary working days

51 days Rest days 10 days Regular holidays 2 days Special days 365 days Total equivalent number of days c) For those who do not work and are not considered paid on Sundays or rest days: ADR x 314 days EMR = ——————— 12 Where 314 days = 302 days Ordinary working days 10 days Regular holidays 2 days Special days (If considered paid; If actually worked, this is equivalent to 2.6 days) 314 days Total equivalent number of days d) For those who do not work and are not considered paid on Saturdays or rest days: ADR x 262 days EMR = ——————— 12 Where 262 days = 250 days Ordinary working days 10 days Regular holidays 2 days Special days (If considered paid; If actually worked, this is equivalent to 2.6 days) 262 days Total equivalent number of days Note: For workers whose rest days fall on Sundays, the number of rest days in a year is reduced from 52 to 51 days, the last Sunday of August being a regular holiday under Executive

Order No. 201. For purposes of computation, said holiday, although still a rest day for them, is included in the ten regular holidays. For workers whose rest days do not fall on Sundays, the number of rest days is 52 days, as there are 52 weeks in a year. Nothing herein shall be considered as authorizing the reduction of benefits granted under existing agreements or employer practices/policies.. SECTION 7. Basis of Minimum Wages Rates. — The statutory minimum wage rules prescribed under the Act shall be for the normal working hours, which shall not exceed eight hours work a day.. SECTION 8. Creditable Wage Increase. — a) No wage increase shall be credited as compliance with the increases prescribed under the Act unless expressly provided under collective bargaining agreements; and, such wage increase was granted not earlier than April 1, 1989 but not later than July 1, 1989. Where the wage increase granted is less than the prescribed increase under the Act, the employer shall pay the difference.. b) Anniversary wage increase provided in collective agreements, merit wage increase, and those resulting from the regularization or promotion of employees shall not be credited as compliance thereto.. SECTION 9. Workers Paid by Results. — a) All workers paid by results, including those who are paid on piecework, takay, pakyaw, or task basis, shall receive not less than the applicable statutory minimum wage rates prescribed under the Act for the normal working hours which shall not exceed eight hours work a day, or a proportion thereof for work of less than the normal working hours.. The adjusted minimum wage rates for workers paid by results shall be computed in accordance with the following steps: 1) Amount of increase in AMW - Previous AMW x 100 = % Increase; 2) Existing rate/piece x % increase = increase in rate/piece; 3) Existing rate/piece + increase in rate/piece = Adjusted rate/piece.. Where AMW is the applicable minimum wage rate. b) The wage rates of workers who are paid by results shall continue to be established in accordance with Article 101 of the Labor Code, as amended and its implementing regulations.  Gaa vs. Court of Appeals (G.R No. 44169, 1985)

This is a petition for review on certiorari of the decision of the Court of Appeals promulgated on March 30, 1976, affirming the decision of the Court of First Instance of Manila.

It appears that respondent Europhil Industries Corporation was formerly one of the tenants in Trinity Building at T.M. Kalaw Street, Manila, while petitioner Rosario A. Gaa was then the building administrator. On December 12, 1973, Europhil Industries commenced an action (Civil Case No. 92744) in the Court of First Instance of Manila for damages against petitioner "for having perpetrated certain acts that Europhil Industries considered a trespass upon its rights, namely, cutting of its electricity, and removing its name from the building directory and gate passes of its officials and employees" (p. 87 Rollo). On June 28, 1974, said court rendered judgment in favor of respondent Europhil Industries, ordering petitioner to pay the former the sum of P10,000.00 as actual damages, P5,000.00 as moral damages, P5,000.00 as exemplary damages and to pay the costs. The said decision having become final and executory, a writ of garnishment was issued pursuant to which Deputy Sheriff Cesar A. Roxas on August 1, 1975 served a Notice of Garnishment upon El Grande Hotel, where petitioner was then employed, garnishing her "salary, commission and/or remuneration." Petitioner then filed with the Court of First Instance of Manila a motion to lift said garnishment on the ground that her "salaries, commission and, or remuneration are exempted from execution under Article 1708 of the New Civil Code. Said motion was denied by the lower Court in an order dated November 7, 1975. A motion for reconsideration of said order was likewise denied, and on January 26, 1976 petitioner filed with the Court of Appeals a petition for certiorari against filed with the Court of Appeals a petition for certiorari against said order of November 7, 1975. On March 30, 1976, the Court of Appeals dismissed the petition for certiorari. In dismissing the petition, the Court of Appeals held that petitioner is not a mere laborer as contemplated under Article 1708 as the term laborer does not apply to one who holds a managerial or supervisory position like that of petitioner, but only to those "laborers occupying the lower strata." It also held that the term "wages" means the pay given" as hire or reward to artisans, mechanics, domestics or menial servants, and laborers employed in manufactories, agriculture, mines, and other manual occupation and usually employed to distinguish the sums paid to persons hired to perform manual labor, skilled or unskilled, paid at stated times, and measured by the day, week, month, or season," citing 67 C.J. 285, which is the ordinary acceptation of the said term, and that "wages" in Spanish is "jornal" and one who receives a wage is a "jornalero." In the present petition for review on certiorari of the aforesaid decision of the Court of Appeals, petitioner questions the correctness of the interpretation of the then Court of Appeals of Article 1708 of the New Civil Code which reads as follows: ART. 1708. The laborer's wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. It is beyond dispute that petitioner is not an ordinary or rank and file laborer but "a responsibly place employee," of El Grande Hotel, "responsible for planning, directing, controlling, and coordinating the activities of all housekeeping personnel" (p. 95, Rollo) so as to ensure the cleanliness, maintenance and orderliness of all guest rooms, function rooms, public areas, and the surroundings of the hotel. Considering the importance of petitioner's function in El Grande Hotel, it is undeniable that petitioner is occupying a position equivalent to that of a managerial or supervisory position. In its broadest sense, the word "laborer" includes everyone who performs any kind of mental or physical labor, but as commonly and customarily used and understood, it only applies to one

engaged in some form of manual or physical labor. That is the sense in which the courts generally apply the term as applied in exemption acts, since persons of that class usually look to the reward of a day's labor for immediate or present support and so are more in need of the exemption than are other. (22 Am. Jur. 22 citing Briscoe vs. Montgomery, 93 Ga 602, 20 SE 40;Miller vs. Dugas, 77 Ga 4 Am St Rep 192; State ex rel I.X.L. Grocery vs. Land, 108 La 512, 32 So 433; Wildner vs. Ferguson, 42 Minn 112, 43 NW 793; 6 LRA 338; Anno 102 Am St Rep. 84. In Oliver vs. Macon Hardware Co., 98 Ga 249 SE 403, it was held that in determining whether a particular laborer or employee is really a "laborer," the character of the word he does must be taken into consideration. He must be classified not according to the arbitrary designation given to his calling, but with reference to the character of the service required of him by his employer. In Wildner vs. Ferguson, 42 Minn 112, 43 NW 793, the Court also held that all men who earn compensation by labor or work of any kind, whether of the head or hands, including judges, laywers, bankers, merchants, officers of corporations, and the like, are in some sense "laboring men." But they are not "laboring men" in the popular sense of the term, when used to refer to a must presume, the legislature used the term. The Court further held in said case: There are many cases holding that contractors, consulting or assistant engineers, agents, superintendents, secretaries of corporations and livery stable keepers, do not come within the meaning of the term. (Powell v. Eldred, 39 Mich, 554, Atkin v. Wasson, 25 N.Y. 482; Short v. Medberry, 29 Hun. 39; Dean v. De Wolf, 16 Hun. 186; Krausen v. Buckel, 17 Hun. 463; Ericson v. Brown, 39 Barb. 390; Coffin v. Reynolds, 37 N.Y. 640; Brusie v. Griffith, 34 Cal. 306; Dave v. Nunan,62 Cal. 400). Thus, in Jones vs. Avery, 50 Mich, 326, 15 N.W. Rep. 494, it was held that a traveling salesman, selling by sample, did not come within the meaning of a constitutional provision making stockholders of a corporation liable for "labor debts" of the corporation. In Kline vs. Russell 113 Ga. 1085, 39 SE 477, citing Oliver vs. Macon Hardware Co., supra, it was held that a laborer, within the statute exempting from garnishment the wages of a "laborer," is one whose work depends on mere physical power to perform ordinary manual labor, and not one engaged in services consisting mainly of work requiring mental skill or business capacity, and involving the exercise of intellectual faculties. So, also in Wakefield vs. Fargo, 90 N.Y. 213, the Court, in construing an act making stockholders in a corporation liable for debts due "laborers, servants and apprentices" for services performed for the corporation, held that a "laborer" is one who performs menial or manual services and usually looks to the reward of a day's labor or services for immediate or present support. And in Weymouth vs. Sanborn, 43 N.H. 173, 80 Am. Dec. 144, it was held that "laborer" is a term ordinarily employed to denote one who subsists by physical toil in contradistinction to those who subsists by professional skill. And in Consolidated Tank Line Co. vs. Hunt, 83 Iowa, 6, 32 Am. St. Rep. 285, 43 N.W. 1057, 12 L.R.A. 476, it was stated that "laborers" are those persons who earn a livelihood by their own manual labor. Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it declared what are to be exempted from attachment and execution. The term "wages" as distinguished from "salary", applies to the compensation for manual labor, skilled or unskilled, paid at stated

times, and measured by the day, week, month, or season, while "salary" denotes a higher degree of employment, or a superior grade of services, and implies a position of office: by contrast, the term wages " indicates considerable pay for a lower and less responsible character of employment, while "salary" is suggestive of a larger and more important service (35 Am. Jur. 496). The distinction between wages and salary was adverted to in Bell vs. Indian Livestock Co. (Tex. Sup.), 11 S.W. 344, wherein it was said: "'Wages' are the compensation given to a hired person for service, and the same is true of 'salary'. The words seem to be synonymous, convertible terms, though we believe that use and general acceptation have given to the word 'salary' a significance somewhat different from the word 'wages' in this: that the former is understood to relate to position of office, to be the compensation given for official or other service, as distinguished from 'wages', the compensation for labor." Annotation 102 Am. St. Rep. 81, 95. We do not think that the legislature intended the exemption in Article 1708 of the New Civil Code to operate in favor of any but those who are laboring men or women in the sense that their work is manual. Persons belonging to this class usually look to the reward of a day's labor for immediate or present support, and such persons are more in need of the exemption than any others. Petitioner Rosario A. Gaa is definitely not within that class. We find, therefore, and so hold that the Trial Court did not err in denying in its order of November 7, 1975 the motion of petitioner to lift the notice of garnishment against her salaries, commission and other remuneration from El Grande Hotel since said salaries, Commission and other remuneration due her from the El Grande Hotel do not constitute wages due a laborer which, under Article 1708 of the Civil Code, are not subject to execution or attachment. IN VIEW OF THE FOREGOING, We find the present petition to be without merit and hereby AFFIRM the decision of the Court of Appeals, with costs against petitioner.  Millares vs. NLRC (G.R No. 122827, 1999)

Petitioners numbering one hundred sixteen (116)[1] occupied the positions of Technical Staff, Unit Manager, Section Manager, Department Manager, Division Manager and Vice President in the mill site of respondent Paper Industries Corporation of the Philippines (PICOP) in Bislig, Surigao del Sur. In 1992 PICOP suffered a major financial setback allegedly brought about by the joint impact of restrictive government regulations on logging and the economic crisis. To avert further losses, it undertook a retrenchment program and terminated the services of petitioners. Accordingly, petitioners received separation pay computed at the rate of one (1) month basic pay for every year of service. Believing however that the allowances they allegedly regularly received on a monthly basis during their employment should have been included in the computation thereof they lodged a complaint for separation pay differentials. The allowances in question pertained to the following 1. Staff/Manager's Allowance Respondent PICOP provides free housing facilities to supervisory and managerial employees assigned in Bislig. The privilege includes free water and electric consumption. Owing however to shortage of such facilities, it was constrained to grant Staff allowance instead to those who live in rented houses outside but near the vicinity of the mill site. But the allowance ceases

whenever a vacancy occurs in the company's housing facilities. The former grantee is then directed to fill the vacancy. For Unit, Section and Department Managers, respondent PICOP gives an additional amount to meet the same kind of expenses called Manager's allowance. 2. Transportation Allowance To relieve respondent PICOP's motor pool in Bislig from a barrage of requests for company vehicles and to stabilize company vehicle requirements it grants transportation allowance to key officers and Managers assigned in the mill site who use their own vehicles in the performance of their duties. It is a conditional grant such that when the conditions no longer obtain, the privilege is discontinued. The recipients of this kind of allowance are required to liquidate it by submitting a report with a detailed enumeration of expenses incurred. 3. Bislig Allowance The Bislig Allowance is given to Division Managers and corporate officers assigned in Bislig on account of the hostile environment prevailing therein. But once the recipient is transferred elsewhere outside Bislig, the allowance ceases. Applying Art.,97, par. (f), of the Labor Code which defines if wage," the Executive Labor Arbiter opined that the subject allowances, being customarily furnished by respondent PICOP and regularly received by petitioners, formed part of the latter's wages. Resolving the controversy from another angle, on the strength of the ruling in Santos v. NLRC[2] and Soriano v. NLRC[3] that in the computation of separation pay account should be taken not just of the basic salary but also of the regular allowances that the employee had been receiving, he concluded that the allowances should be included in petitioners' base pay. Thus respondent PICOP was ordered on 28 April 1994 to pay petitioners Four Million Four Hundred Eighty-One Thousand Pesos (P4,481,000.00) representing separation pay differentials plus ten per cent (10%) thereof as attorney's fees.[4] The National Labor Relations Commission (NLRC) did not share the view of the Executive Labor Arbiter. On 7 October 1994 it set aside the assailed decision by decreeing that the allowances did not form part of the salary base used in computing separation pay.[5] Its ruling was based on the finding that the cases relied upon by the Executive Labor Arbiter were inapplicable since they involved illegal dismissal where separation pay was granted in lieu of reinstatement which was no longer feasible. Instead, what it considered in point was Estate of the late Eugene J. Kneebone v. NLRC[6] where the Court held that representation and transportation allowances were deemed not part of salary and should therefore be excluded in the computation of separation benefits. Relating the present case with Art. 97, par. (f), of the Labor Code, the NLRC likewise found that petitioners' allowances were contingency-based and thus not included in their salaries. On 26 September 1995 reconsideration was denied.[7] In this petition for certiorari, petitioners submit that their allowances are included in the definition of "facilities" in Art. 97, par. (f), of the Labor Code, being necessary and indispensable for their existence and subsistence. Furthermore they claim that their availment of the monetary equivalent of those "facilities" on a monthly basis was characterized by permanency, regularity and customariness. And to fortify their arguments they insist on the applicability of Santos,[8] Soriano,[9] The Insular Life Assurance Company,[10] Planters Products, Inc.[11] and Songco[12] which are all against the NLRC holding that the salary base in computing separation pay includes not just the basic salary but also the regular allowances.

There is no showing of grave abuse of discretion on the part of the NLRC. In case of retrenchment to prevent losses, Art. 283 of the the Labor Code imposes on the employer an obligation to grant to the affected employees separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. Since the law speaks of "pay," the question arises, "What exactly does the term connote?" We correlate Art. 283 with Art. 97 of the same Code on definition of terms. "Pay" is not defined therein but "wage." In Songco the Court explained that both words (as well as salary) generally refer to one and the same meaning, i.e., a reward or recompense for services performed. Specifically, "wage" is defined in letter (f) as the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. We invite attention to the above-underlined clause. Stated differently, when an employer customarily furnishes his employee board, lodging or other facilities, the fair and reasonable value thereof, as determined by the Secretary of Labor and Employment, is included in "wage." In order to ascertain whether the subject allowances form part of petitioner's "wages," we divide the discussion on the following - "customarily furnished;" "board, lodging or other facilities;" and, "fair and reasonable value as determined by the Secretary of Labor." "Customary" is founded on long-established and constant practice[13] connoting regularity.[14] The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary[15] because the nature of the grant is a factor worth considering. We agree with the observation of the Office of the Solicitor General- that the subject allowances were temporarily, not regularly, received by petitioners because In the case of the housing allowance, once a vacancy occurs in the company-provided housing accommodations, the employee concerned transfers to the company premises and his housing allowance is discontinued x x x x On the other hand, the transportation allowance is in the form of advances for actual transportation expenses subject to liquidation x x x given only to employees who have personal cars. The Bislig allowance is given to Division Managers and corporate officers assigned in Bislig, Surigao del Norte. Once the officer is transferred outside Bislig, the allowance stops.[16] We add that in the availment of the transportation allowance, respondent PICOP set another requirement that the personal cars be used by the employees in the performance of their duties. When the conditions for availment ceased to exist, the allowance reached the cutoff point. The finding of the NLRC along the same line likewise merits concurrence, i.e., petitioners' continuous enjoyment of the disputed allowances was based on contingencies the occurrence of which wrote finis to such enjoyment. Although it is quite easy to comprehend "board" and "lodging," it is not so with "facilities." Thus Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor Code gives meaning to the term as including articles or services for the benefit of the employee or his family but excluding tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employer's business. The Staff /Manager's allowance may fall under

"lodging" but the transportation and Bislig allowances are not embraced in "facilities" on the main consideration that they are granted as well as the Staff/Manager's allowance for respondent PICOP's benefit and convenience, i.e., to insure that petitioners render quality performance. In determining whether a privilege is a facility, the criterion is not so much its kind but its purpose.[17] That the assailed allowances were for the benefit and convenience of respondent company was supported by the circumstance that they were not subjected to withholding tax. Revenue Audit Memo Order No. 1-87 pertinently provides 3.2 x x x x transportation, representation or entertainment expenses shall not constitute taxable compensation if: (a) It is for necessary travelling and representation or entertainment expenses paid or incurred by the employee in the pursuit of the trade or business of the employer, and (b) The employee is required to, and does, make an accounting/liquidation for such expense in accordance with the specific requirements of substantiation for such category or expense. Board and lodging allowances furnished to an employee not in excess of the latter's needs and given free of charge, constitute income to the latter except if such allowances or benefits are furnished to the employee for the convenience of the employer and as necessary incident to proper performance of his duties in which case such benefits or allowances do not constitute taxable income.[18] The Secretary of Labor and Employment under Sec. 6, Rule VII, Book III, of the Rules Implementing the Labor Code may from time to time fix in appropriate issuances the "fair and reasonable value of board, lodging and other facilities customarily furnished by an employer to his employees." Petitioners' allowances do not represent such fair and reasonable value as determined by the proper authority simply because the Staff/Manager's allowance and transportation allowance were amounts given by respondent company in lieu of actual provisions for housing and transportation needs whereas the Bislig allowance was given in consideration of being assigned to the hostile environment then prevailing in Bislig. The inevitable conclusion is that, as reached by the NLRC, subject allowances did not form part of petitioners' wages. In Santos[19] the Court decreed that in the computation of separation pay awarded in lieu of reinstatement, account must be taken not only of the basic salary but also of transportation and emergency living allowances. Later, the Court in Soriano, citing Santos, was general in its holding that the salary base properly used in computing separation pay where reinstatement was no longer feasible should include not just the basic salary but also the regular allowances that the employee had been receiving. Insular merely reiterated the aforementioned rulings. The rationale is not difficult to discern. It is the obligation of the employer to pay an illegally dismissed employee the whole amount of his salaries plus all other benefits, bonuses and general increases to which he would have been normally entitled had he not been dismissed and had not stopped working.[20] The same holds true in case of retrenched employees. And thus we applied Insular and Soriano in Planters in the computation of separation pay of retrenched employees. Songco likewise involved retrenchment and was relied upon in Planters, Soriano and Santos in determining the proper amount of separation pay. As culled from the foregoing jurisprudence, separation pay when awarded to an illegally dismissed employee in lieu of reinstatement or to a retrenched employee should be computed based not only on the basic salary but also on the regular allowances that the employee had

been receiving. But in view of the previous discussion that the disputed allowances were not regularly received by petitioners herein, there was no reason at all for petitioners to resort to the above cases. Neither is Kneebone applicable, contrary to the finding of the NLRC, because of the difference in factual circumstances. In Kneebone, the Court was tasked to resolve the issue whether the representation and transportation allowances formed part of salary as to be considered in the computation of retirement benefits. The ruling was in the negative on the main ground that the retirement plan of the company expressly excluded such allowances from salary. WHEREFORE, the petition is DISMISSED. The resolution of public respondent National Labor Relations Commission dated 7 October 1994 holding that the Staff /Manager's, transportation and Bislig allowances did not form part of the salary base used in computing the separation pay of petitioners, as well as its resolution dated 26 September 1995 denying reconsideration, is AFFIRMED. No costs.  Songco vs. NLRC (G.R No. L-450999, 1990)

This is a petition for certiorari seeking to modify the decision of the National Labor Relations Commission in NLRC Case No. RB-IV-20840-78-T entitled, "Jose Songco and Romeo Cipres, Complainants-Appellants, v. F.E. Zuellig (M), Inc., Respondent-Appellee" and NLRC Case No. RN- IV-20855-78-T entitled, "Amancio Manuel, Complainant-Appellant, v. F.E. Zuellig (M), Inc., Respondent-Appellee," which dismissed the appeal of petitioners herein and in effect affirmed the decision of the Labor Arbiter ordering private respondent to pay petitioners separation pay equivalent to their one month salary (exclusive of commissions, allowances, etc.) for every year of service. The antecedent facts are as follows: Private respondent F.E. Zuellig (M), Inc., (hereinafter referred to as Zuellig) filed with the Department of Labor (Regional Office No. 4) an application seeking clearance to terminate the services of petitioners Jose Songco, Romeo Cipres, and Amancio Manuel (hereinafter referred to as petitioners) allegedly on the ground of retrenchment due to financial losses. This application was seasonably opposed by petitioners alleging that the company is not suffering from any losses. They alleged further that they are being dismissed because of their membership in the union. At the last hearing of the case, however, petitioners manifested that they are no longer contesting their dismissal. The parties then agreed that the sole issue to be resolved is the basis of the separation pay due to petitioners. Petitioners, who were in the sales force of Zuellig received monthly salaries of at least P40,000. In addition, they received commissions for every sale they made. The collective Bargaining Agreement entered into between Zuellig and F.E. Zuellig Employees Association, of which petitioners are members, contains the following provision (p. 71, Rollo): ARTICLE XIV — Retirement Gratuity Section l(a)-Any employee, who is separated from employment due to old age, sickness, death or permanent lay-off not due to the fault of said employee shall receive from the company a retirement gratuity in an amount equivalent to one (1) month's salary per year of service. One month of salary as used in this

paragraph shall be deemed equivalent to the salary at date of retirement; years of service shall be deemed equivalent to total service credits, a fraction of at least six months being considered one year, including probationary employment. (Emphasis supplied) On the other hand, Article 284 of the Labor Code then prevailing provides: Art. 284. Reduction of personnel. — The termination of employment of any employee due to the installation of labor saving-devices, redundancy, retrenchment to prevent losses, and other similar causes, shall entitle the employee affected thereby to separation pay. In case of termination due to the installation of labor-saving devices or redundancy, the separation pay shall be equivalent to 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 other similar causes, 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. (Emphasis supplied) In addition, Sections 9(b) and 10, Rule 1, Book VI of the Rules Implementing the Labor Code provide: xxx Sec. 9(b). Where the termination of employment is due to retrechment initiated by the employer to prevent losses or other similar causes, or where the employee suffers from a disease and his continued employment is prohibited by law or is prejudicial to his health or to the health of his co-employees, the employee shall be entitled to termination pay equivalent at least to his one month salary, or to one-half month pay for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one whole year. xxx Sec. 10. Basis of termination pay. — The computation of the termination pay of an employee as provided herein shall be based on his latest salary rate, unless the same was reduced by the employer to defeat the intention of the Code, in which case the basis of computation shall be the rate before its deduction. (Emphasis supplied) On June 26,1978, the Labor Arbiter rendered a decision, the dispositive portion of which reads (p. 78, Rollo): RESPONSIVE TO THE FOREGOING, respondent should be as it is hereby, ordered to pay the complainants separation pay equivalent to their one month salary (exclusive of commissions, allowances, etc.) for every year of service that they have worked with the company. SO ORDERED.

The appeal by petitioners to the National Labor Relations Commission was dismissed for lack of merit. Hence, the present petition. On June 2, 1980, the Court, acting on the verified "Notice of Voluntary Abandonment and Withdrawal of Petition dated April 7, 1980 filed by petitioner Romeo Cipres, based on the ground that he wants "to abide by the decision appealed from" since he had "received, to his full and complete satisfaction, his separation pay," resolved to dismiss the petition as to him. The issue is whether or not earned sales commissions and allowances should be included in the monthly salary of petitioners for the purpose of computation of their separation pay. The petition is impressed with merit. Petitioners' position was that in arriving at the correct and legal amount of separation pay due them, whether under the Labor Code or the CBA, their basic salary, earned sales commissions and allowances should be added together. They cited Article 97(f) of the Labor Code which includes commission as part on one's salary, to wit; (f) 'Wage' paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. 'Fair reasonable value' shall not include any profit to the employer or to any person affiliated with the employer. Zuellig argues that if it were really the intention of the Labor Code as well as its implementing rules to include commission in the computation of separation pay, it could have explicitly said so in clear and unequivocal terms. Furthermore, in the definition of the term "wage", "commission" is used only as one of the features or designations attached to the word remuneration or earnings. Insofar as the issue of whether or not allowances should be included in the monthly salary of petitioners for the purpose of computation of their separation pay is concerned, this has been settled in the case of Santos v. NLRC, et al., G.R. No. 76721, September 21, 1987, 154 SCRA 166, where We ruled that "in the computation of backwages and separation pay, account must be taken not only of the basic salary of petitioner but also of her transportation and emergency living allowances." This ruling was reiterated in Soriano v. NLRC, et al., G.R. No. 75510, October 27, 1987, 155 SCRA 124 and recently, in Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989. We shall concern ourselves now with the issue of whether or not earned sales commission should be included in the monthly salary of petitioner for the purpose of computation of their separation pay.

Article 97(f) by itself is explicit that commission is included in the definition of the term "wage". It has been repeatedly declared by the courts that where the law speaks in clear and categorical language, there is no room for interpretation or construction; there is only room for application (Cebu Portland Cement Co. v. Municipality of Naga, G.R. Nos. 24116-17, August 22, 1968, 24 SCRA 708; Gonzaga v. Court of Appeals, G.R.No. L-2 7455, June 28,1973, 51 SCRA 381). A plain and unambiguous statute speaks for itself, and any attempt to make it clearer is vain labor and tends only to obscurity. How ever, it may be argued that if We correlate Article 97(f) with Article XIV of the Collective Bargaining Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of the Implementing Rules, there appears to be an ambiguity. In this regard, the Labor Arbiter rationalized his decision in this manner (pp. 74-76, Rollo): The definition of 'wage' provided in Article 96 (sic) of the Code can be correctly be (sic) stated as a general definition. It is 'wage ' in its generic sense. A careful perusal of the same does not show any indication that commission is part of salary. We can say that commission by itself may be considered a wage. This is not something novel for it cannot be gainsaid that certain types of employees like agents, field personnel and salesmen do not earn any regular daily, weekly or monthly salaries, but rely mainly on commission earned. Upon the other hand, the provisions of Section 10, Rule 1, Book VI of the implementing rules in conjunction with Articles 273 and 274 (sic) of the Code specifically states that the basis of the termination pay due to one who is sought to be legally separated from the service is 'his latest salary rates. x x x. Even Articles 273 and 274 (sic) invariably use 'monthly pay or monthly salary'. The above terms found in those Articles and the particular Rules were intentionally used to express the intent of the framers of the law that for purposes of separation pay they mean to be specifically referring to salary only. .... Each particular benefit provided in the Code and other Decrees on Labor has its own pecularities and nuances and should be interpreted in that light. Thus, for a specific provision, a specific meaning is attached to simplify matters that may arise there from. The general guidelines in (sic) the formation of specific rules for particular purpose. Thus, that what should be controlling in matters concerning termination pay should be the specific provisions of both Book VI of the Code and the Rules. At any rate, settled is the rule that in matters of conflict between the general provision of law and that of a particular- or specific provision, the latter should prevail. On its part, the NLRC ruled (p. 110, Rollo): From the aforequoted provisions of the law and the implementing rules, it could be deduced that wage is used in its generic sense and obviously refers to the basic wage rate to be ascertained on a time, task, piece or commission basis or other method of calculating the same. It does not, however, mean that commission, allowances or analogous income necessarily forms part of the employee's salary because to do so would lead to anomalies (sic), if not absurd,

construction of the word "salary." For what will prevent the employee from insisting that emergency living allowance, 13th month pay, overtime, and premium pay, and other fringe benefits should be added to the computation of their separation pay. This situation, to our mind, is not the real intent of the Code and its rules. We rule otherwise. The ambiguity between Article 97(f), which defines the term 'wage' and Article XIV of the Collective Bargaining Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of the Implementing Rules, which mention the terms "pay" and "salary", is more apparent than real. Broadly, the word "salary" means a recompense or consideration made to a person for his pains or industry in another man's business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it the fundamental idea of compensation for services rendered. Indeed, there is eminent authority for holding that the words "wages" and "salary" are in essence synonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing Hopkins vs. Cromwell, 85 N.Y.S. 839,841,89 App. Div. 481; 38 Am. Jur. 496). "Salary," the etymology of which is the Latin word "salarium," is often used interchangeably with "wage", the etymology of which is the Middle English word "wagen". Both words generally refer to one and the same meaning, that is, a reward or recompense for services performed. Likewise, "pay" is the synonym of "wages" and "salary" (Black's Law Dictionary, 5th Ed.). Inasmuch as the words "wages", "pay" and "salary" have the same meaning, and commission is included in the definition of "wage", the logical conclusion, therefore, is, in the computation of the separation pay of petitioners, their salary base should include also their earned sales commissions. The aforequoted provisions are not the only consideration for deciding the petition in favor of the petitioners. We agree with the Solicitor General that granting, in gratia argumenti, that the commissions were in the form of incentives or encouragement, so that the petitioners would be inspired to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remuneration services rendered which contributed to the increase of income of Zuellig . Commission is the recompense, compensation or reward of an agent, salesman, executor, trustees, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal (Black's Law Dictionary, 5th Ed., citing Weiner v. Swales, 217 Md. 123, 141 A.2d 749, 750). The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commission are part of petitioners' wage or salary. We take judicial notice of the fact that some salesmen do not receive any basic salary but depend on commissions and allowances or commissions alone, are part of petitioners' wage or salary. We take judicial notice of the fact that some salesman do not received any basic salary but depend on commissions and allowances or commissions alone, although an employer-employee relationship exists. Bearing in mind the preceeding dicussions, if we adopt the opposite view that commissions, do not form part of wage or salary, then, in effect, We will be saying that this kind of salesmen do not receive any salary and therefore, not entitled to separation pay in the event of discharge from employment. Will this not be absurd? This narrow interpretation is not in accord with the liberal spirit of our labor laws and considering the purpose of separation pay which is, to alleviate the difficulties which confront a dismissed employee thrown the the streets to face the harsh necessities of life.

Additionally, in Soriano v. NLRC, et al., supra, in resolving the issue of the salary base that should be used in computing the separation pay, We held that: The commissions also claimed by petitioner ('override commission' plus 'net deposit incentive') are not properly includible in such base figure since such commissions must be earned by actual market transactions attributable to petitioner. Applying this by analogy, since the commissions in the present case were earned by actual market transactions attributable to petitioners, these should be included in their separation pay. In the computation thereof, what should be taken into account is the average commissions earned during their last year of employment. The final consideration is, 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 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" (Abella v. NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140; Manila Electric Company v. NLRC, et al., G.R. No. 78763, July 12,1989), and Article 1702 of the Civil Code which provides that "in case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. ACCORDINGLY, the petition is hereby GRANTED. The decision of the respondent National Labor Relations Commission is MODIFIED by including allowances and commissions in the separation pay of petitioners Jose Songco and Amancio Manuel. The case is remanded to the Labor Arbiter for the proper computation of said separation pay. FACTS:

the ground of retrenchment due to financial losses. agreed that the sole issue to be resolved was the basis of the separation pay due.

they made. ich Songco, et al. were members contained the following provision: "Any employee who is separated from employment due to old age, sickness, death or permanent lay-off, not due to the fault of said employee, shall receive from the company a retirement gratuity in an amount equivalent to one (1) month's salary per year of service."

month salary (exclusive of commissions, allowances, etc.) for every year of service with the company.

ISSUE: Whether or not earned sales commissions and allowances should be included in the monthly salary of Songco, et al. for the purpose of computing their separation pay.

RULING: YES . In the computation of backwages and separation pay, account must be taken not only of the basic salary of the employee, but also of the transportation and emergency living allowances. Even if the commissions were in the form of incentives or encouragement, so that the salesman would be inspired to put a little more industry on jobs particularly assigned to them, still these commissions are direct remunerations for services rendered which contributed to the increase of income of the employee. Commission is the recompense compensation or reward of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate that commissions are part of Songco, et al'swage or salary. The Court takes judicial notice of the fact that some salesmen do not receive any basic salary, but depend on commissions and allowances or commissions alone, although an employeremployee relationships exists. If the opposite view is adopted, i.e., that commissions do not form part of the wage or salary, then in effect, we will be saying that this kind of salesmen do not receive any salary and, therefore, not entitled to separation pay in the event of discharge from employment. This narrow interpretation is not in accord with the liberal spirit of the labor laws, and considering the purpose of separation pay which is, to alleviate the difficulties which confront a dismissed employee thrown to the streets to face the harsh necessities of life. In Soriano vs. NLRC (155 SCRA 124), we held that the commissions also claimed by the employee (override commission plus net deposit incentive) are not properly includible in such base figure since such commissions must be earned by actual market transactions attributable to the petitioner [salesman]. Since the commissions in the present case were earned by actual transactions attributable to Song, et al., these should be included in their separation pay. In the computation thereof, what should be taken into account is the average commission earned during their last year of employment.