compiled cases in labor standards (full text)

LETRAN CALAMBA FACULTY.........................................................................................................................................1CALTEX.......................................................................................................................................................................12CRISTONICO B. LEGAHI...............................................................................................................................................22ABDULJUAHID R. PIGCAULAN......................................................................................................................................28ASSOCIATION OF INTERNATIONAL SHIPPING LINES....................................................................................................35LAZARO V. DACUT......................................................................................................................................................45ASIAN TRANSMISSION................................................................................................................................................49JOSE RIZAL COLLEGE..................................................................................................................................................55SAN MIGUEL CORPORATION.......................................................................................................................................60

LETRAN CALAMBA FACULTY and EMPLOYEES ASSOCIATION, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and COLEGIO DE SANJUAN DE LETRAN CALAMBA, INC., respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Assailed in the present Petition for Review on Certiorari under Rule 45 of the Rules of Court is the Decision1 of the Court of Appeals (CA) promulgated on May 14, 2002 in CA-G.R. SP No. 61552 dismissing the special civil action for certiorari filed before it; and the Resolution2 dated November 28, 2002, denying petitioner's Motion for Reconsideration.

The facts of the case are as follows:

On October 8, 1992, the Letran Calamba Faculty and Employees Association (petitioner) filed with Regional Arbitration Branch No. IV of the National Labor Relations Commission (NLRC) a Complaint3 against Colegio de San Juan de Letran, Calamba, Inc. (respondent) for collection of various monetary claims due its members. Petitioner alleged in its Position Paper that:

x x x x

2) [It] has filed this complaint in behalf of its members whose names and positions appear in the list hereto attached as Annex "A".

3) In the computation of the thirteenth month pay of its academic personnel, respondent does not include as basis therefor their compensation for overloads. It only takes into account the pay the faculty members receive for their teaching loads not exceeding eighteen (18) units. The teaching overloads are rendered within eight (8) hours a day.

4) Respondent has not paid the wage increases required by Wage Order No. 5 to its employees who qualify thereunder.

5) Respondent has not followed the formula prescribed by DECS Memorandum Circular No. 2 dated March 10, 1989 in the computation of the compensation per unit of excess load or overload of faculty members. This has resulted in the diminution of the compensation of faculty members.

http://www.lawphil.net/judjuris/juri2008/jan2008/gr_156225_2008.html#fnt3



6) The salary increases due the non-academic personnel as a result of job grading has not been given. Job grading has been an annual practice of the school since 1980; the same is done for the purpose of increasing the salaries of non-academic personnel and as the counterpart of the ranking systems of faculty members.

7) Respondent has not paid to its employees the balances of seventy (70%) percent of the tuition fee increases for the years 1990, 1991 and 1992.

8) Respondent has not also paid its employees the holiday pay for the ten (10) regular holidays as provided for in Article 94 of the Labor Code.

9) Respondent has refused without justifiable reasons and despite repeated demands to pay its obligations mentioned in paragraphs 3 to 7 hereof.

x x x x4

The complaint was docketed as NLRC Case No. RAB-IV-10-4560-92-L.

On January 29, 1993, respondent filed its Position Paper denying all the allegations of petitioner.

On March 10, 1993, petitioner filed its Reply.

Prior to the filing of the above-mentioned complaint, petitioner filed a separate complaint against the respondent for money claims with Regional Office No. IV of the Department of Labor and Employment (DOLE).

On the other hand, pending resolution of NLRC Case No. RAB-IV-10-4560-92-L, respondent filed with Regional Arbitration Branch No. IV of the NLRC a petition to declare as illegal a strike staged by petitioner in January 1994.

Subsequently, these three cases were consolidated. The case for money claims originally filed by petitioner with the DOLE was later docketed as NLRC Case No. RAB-IV-11-4624-92-L, while the petition to declare the subject strike illegal filed by respondent was docketed as NLRC Case No. RAB-IV-3-6555-94-L.

On September 28, 1998, the Labor Arbiter (LA) handling the consolidated cases rendered a Decision with the following dispositive portion:

WHEREFORE, premises considered, judgment is hereby rendered, as follows:

1. The money claims cases (RAB-IV-10-4560-92-L and RAB-IV-11-4624-92-L) are hereby dismissed for lack of merit;

2. The petition to declare strike illegal (NLRC Case No. RAB-IV-3-6555-94-L) is hereby dismissed, but the officers of the Union, particularly its President, Mr. Edmundo F. Marifosque, Sr., are hereby reprimanded and sternly warned that future conduct similar to what was displayed in this case will warrant a more severe sanction from this Office.

SO ORDERED.5

Both parties appealed to the NLRC.

On July 28, 1999, the NLRC promulgated its Decision6 dismissing both appeals. Petitioner filed a Motion for Reconsideration7 but the same was denied by the NLRC in its Resolution8 dated June 21, 2000.

Petitioner then filed a special civil action for certiorari with the CA assailing the above-mentioned NLRC Decision and Resolution.

On May 14, 2002, the CA rendered the presently assailed judgment dismissing the petition.

Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution promulgated on November 28, 2002.






Hence, herein petition for review based on the following assignment of errors:

I

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE FACTUAL FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION CANNOT BE REVIEWED IN CERTIORARI PROCEEDINGS.

II

THE COURT OF APPEALS GRAVELY ERRED IN REFUSING TO RULE SQUARELY ON THE ISSUE OF WHETHER OR NOT THE PAY OF FACULTY MEMBERS FOR TEACHING OVERLOADS SHOULD BE INCLUDED AS BASIS IN THE COMPUTATION OF THEIR THIRTEENTH MONTH PAY.

III

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION IS SUPPORTED BY SUBSTANTIAL EVIDENCE AND IN NOT GRANTING PETITIONER'S MONETARY CLAIMS.9

Citing Agustilo v. Court of Appeals,10 petitioner contends that in a special civil action for certiorari brought before the CA, the appellate court can review the factual findings and the legal conclusions of the NLRC.

As to the inclusion of the overloads of respondent's faculty members in the computation of their 13th-month pay, petitioner argues that under the Revised Guidelines on the Implementation of the 13th-Month Pay Law, promulgated by the Secretary of Labor on November 16, 1987, the basic pay of an employee includes remunerations or earnings paid by his employer for services rendered, and that excluded therefrom are the cash equivalents of unused vacation and sick leave credits, overtime, premium, night differential, holiday pay and cost-of-living allowances. Petitioner claims that since the pay for excess loads or overloads does not fall under any of the enumerated exclusions and considering that the said overloads are being performed within the normal working period of eight hours a day, it only follows that the overloads should be included in the computation of the faculty members' 13th-month pay.

To support its argument, petitioner cites the opinion of the Bureau of Working Conditions of the DOLE that payment of teaching overload performed within eight hours of work a day shall be considered in the computation of the 13th-month pay.11

Petitioner further contends that DOLE-DECS-CHED-TESDA Order No. 02, Series of 1996 (DOLE Order) which was relied upon by the LA and the NLRC in their respective Decisions cannot be applied to the instant case because the DOLE Order was issued long after the commencement of petitioner's complaints for monetary claims; that the prevailing rule at the time of the commencement of petitioner's complaints was to include compensations for overloads in determining a faculty member's 13th-month pay; that to give retroactive application to the DOLE Order issued in 1996 is to deprive workers of benefits which have become vested and is a clear violation of the constitutional mandate on protection of labor; and that, in any case, all doubts in the implementation and interpretation of labor laws, including implementing rules and regulations, should be resolved in favor of labor.

Lastly, petitioner avers that the CA, in concluding that the NLRC Decision was supported by substantial evidence, failed to specify what constituted said evidence. Thus, petitioner asserts that the CA acted arbitrarily in affirming the Decision of the NLRC.

In its Comment, respondent contends that the ruling in Agustilo is an exception rather than the general rule; that the general rule is that in a petition for certiorari, judicial review by this Court or by the CA in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited only to issues of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction; that before a party may ask that the CA or this Court review the factual findings of the NLRC, there must first be a convincing argument that the NLRC acted in a capricious, whimsical, arbitrary or despotic manner; and that in its petition for certiorari filed with the CA, herein petitioner failed to prove that the NLRC acted without or in excess of jurisdiction or with grave abuse of discretion.

Respondent argues that Agustilo is not applicable to the present case because in the former case, the findings of fact of the LA and the NLRC are at variance with each other; while in the present case, the findings of fact and conclusions of law of the LA and the NLRC are the same.




Respondent also avers that in a special civil action for certiorari, the discretionary power to review factual findings of the NLRC rests upon the CA; and that absent any findings by the CA of the need to resolve any unclear or ambiguous factual findings of the NLRC, the grant of the writ of certiorari is not warranted.

Further, respondent contends that even granting that the factual findings of the CA, NLRC and the LA may be reviewed in the present case, petitioner failed to present valid arguments to warrant the reversal of the assailed decision.

Respondent avers that the DOLE Order is an administrative regulation which interprets the 13th-Month Pay Law (P.D. No. 851) and, as such, it is mandatory for the LA to apply the same to the present case.

Moreover, respondent contends that the Legal Services Office of the DOLE issued an opinion dated March 4, 1992,12

that remunerations for teaching in excess of the regular load, which includes overload pay for work performed within an eight-hour work day, may not be included as part of the basic salary in the computation of the 13th-month pay unless this has been included by company practice or policy; that petitioner intentionally omitted any reference to the above-mentioned opinion of the Legal Services Office of the DOLE because it is fatal to its cause; and that the DOLE Order is an affirmation of the opinion rendered by the said Office of the DOLE.

Furthermore, respondent claims that, contrary to the asseveration of petitioner, prior to the issuance of the DOLE Order, the prevailing rule is to exclude excess teaching load, which is akin to overtime, in the computation of a teacher's basic salary and, ultimately, in the computation of his 13th-month pay.

As to respondent's alleged non-payment of petitioner's consolidated money claims, respondent contends that the findings of the LA regarding these matters, which were affirmed by the NLRC and the CA, have clear and convincing factual and legal bases to stand on.

The Court’s Ruling

The Court finds the petition bereft of merit.

As to the first and third assigned errors, petitioner would have this Court review the factual findings of the LA as affirmed by the NLRC and the CA, to wit.

With respect to the alleged non-payment of benefits under Wage Order No. 5, this Office is convinced that after the lapse of the one-year period of exemption from compliance with Wage Order No. 5 (Exhibit "1-B), which exemption was granted by then Labor Minister Blas Ople, the School settled its obligations to its employees, conformably with the agreement reached during the management-employees meeting of June 26, 1985 (Exhibits "4-B" up to "4-D", also Exhibit "6-x-1"). The Union has presented no evidence that the settlement reached during the June 26, 1985 meeting was the result of coercion. Indeed, what is significant is that the agreement of June 26, 1985 was signed by Mr. Porferio Ferrer, then Faculty President and an officer of the complaining Union. Moreover, the samples from the payroll journal of the School, identified and offered in evidence in these cases (Exhibits "1-C" and 1-D"), shows that the School paid its employees the benefits under Wage Order No. 5 (and even Wage Order No. 6) beginning June 16, 1985.

Under the circumstances, therefore, the claim of the Union on this point must likewise fail.

The claim of the Union for salary differentials due to the improper computation of compensation per unit of excess load cannot hold water for the simple reason that during the Schoolyears in point there were no classes from June 1-14 and October 17-31. This fact was not refuted by the Union. Since extra load should be paid only when actually performed by the employees, no salary differentials are due the Union members.

The non-academic members of the Union cannot legally insist on wage increases due to "Job Grading". From the records it appears that "Job Grading" is a system adopted by the School by which positions are classified and evaluated according to the prescribed qualifications therefor. It is akin to a merit system whereby salary increases are made dependent upon the classification, evaluation and grading of the position held by an employee.

The system of Job Grading was initiated by the School in Schoolyear 1989-1990. In 1992, just before the first of the two money claims was filed, a new Job Grading process was initiated by the School.


Under the circumstances obtaining, it cannot be argued that there were repeated grants of salary increases due to Job Grading to warrant the conclusion that some benefit was granted in favor of the non-academic personnel that could no longer be eliminated or banished under Article 100 of the Labor Code. Since the Job Grading exercises of the School were neither consistent nor for a considerable period of time, the monetary claims attendant to an increase in job grade are non-existent.

The claim of the Union that its members were not given their full share in the tuition fee increases for the Schoolyears 1989-1990, 1990-1991 and 1991-1992 is belied by the evidence presented by the School which consists of the unrefuted testimony of its Accounting Coordinator, Ms. Rosario Manlapaz, and the reports extrapolated from the journals and general ledgers of the School (Exhibits "2", "2-A" up to "2-G"). The evidence indubitably shows that in Schoolyear 1989-1990, the School incurred a deficit of P445,942.25, while in Schoolyears 1990-1991 and 1991-1992, the School paid out, 91% and 77%, respectively, of the increments in the tuition fees collected.

As regards the issue of non-payment of holiday pay, the individual pay records of the School's employees, a sample of which was identified and explained by Ms. Rosario Manlapaz (Exhibit "3"), shows that said School employees are paid for all days worked in the year. Stated differently, the factor used in computing the salaries of the employees is 365, which indicates that their regular monthly salary includes payment of wages during all legal holidays.13

This Court held in Odango v. National Labor Relations Commission14 that:

The appellate court’s jurisdiction to review a decision of the NLRC in a petition for certiorari is confined to issues of jurisdiction or grave abuse of discretion. An extraordinary remedy, a petition for certiorari is available only and restrictively in truly exceptional cases. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of the NLRC’s evaluation of the evidence or of its factual findings. Such findings are generally accorded not only respect but also finality. A party assailing such findings bears the burden of showing that the tribunal acted capriciously and whimsically or in total disregard of evidence material to the controversy, in order that the extraordinary writ of certiorari will lie.15

In the instant case, the Court finds no error in the ruling of the CA that since nowhere in the petition is there any acceptable demonstration that the LA or the NLRC acted either with grave abuse of discretion or without or in excess of its jurisdiction, the appellate court has no reason to look into the correctness of the evaluation of evidence which supports the labor tribunals' findings of fact.

Settled is the rule that the findings of the LA, when affirmed by the NLRC and the CA, are binding on the Supreme Court, unless patently erroneous.16 It is not the function of the Supreme Court to analyze or weigh all over again the evidence already considered in the proceedings below.17 In a petition for review on certiorari, this Court’s jurisdiction is limited to reviewing errors of law in the absence of any showing that the factual findings complained of are devoid of support in the records or are glaringly erroneous.18 Firm is the doctrine that this Court is not a trier of facts, and this applies with greater force in labor cases.19 Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.20 They are binding upon this Court unless there is a showing of grave abuse of discretion or where it is clearly shown that they were arrived at arbitrarily or in utter disregard of the evidence on record.21 We find none of these exceptions in the present case.

In petitions for review on certiorari like the instant case, the Court invariably sustains the unanimous factual findings of the LA, the NLRC and the CA, specially when such findings are supported by substantial evidence and there is no cogent basis to reverse the same, as in this case.22

The second assigned error properly raises a question of law as it involves the determination of whether or not a teacher's overload pay should be considered in the computation of his or her 13th-month pay. In resolving this issue, the Court is confronted with conflicting interpretations by different government agencies.

On one hand is the opinion of the Bureau of Working Conditions of the DOLE dated December 9, 1991, February 28, 1992 and November 19, 1992 to the effect that if overload is performed within a teacher's normal eight-hour work per day, the remuneration that the teacher will get from the additional teaching load will form part of the basic wage.23

This opinion is affirmed by the Explanatory Bulletin on the Inclusion of Teachers' Overload Pay in the 13th-Month Pay Determination issued by the DOLE on December 3, 1993 under then Acting DOLE Secretary Cresenciano B. Trajano. Pertinent portions of the said Bulletin read as follows:












1. Basis of the 13th-month pay computation

The Revised Implementing Guidelines of the 13th-Month Pay Law (P.D. 851, as amended) provides that an employee shall be entitled to not less than 1/12 of the total basic salary earned within a calendar year for the purpose of computing such entitlement. The basic wage of an employee shall include:

"x x x all remunerations or earnings paid by his employer for services rendered but do not include allowances or monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees."

Basic wage is defined by the Implementing Rules of RA 6727 as follows:

"Basic Wage" means all remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost of living allowances, 13th-month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers xxx.

The foregoing definition was based on Article 83 of the Labor Code which provides that "the normal hours of work of any employee shall not exceed eight (8) hours a day." This means that the basic salary of an employee for the purpose of computing the 13th-month pay shall include all remunerations or earnings paid by an employer for services rendered during normal working hours.

2. Overload work/pay

Overload on the other hand means "the load in excess of the normal load of private school teachers as prescribed by the Department of Education, Culture and Sports (DECS) or the policies, rules and standards of particular private schools." In recognition of the peculiarities of the teaching profession, existing DECS and School Policies and Regulations for different levels of instructions prescribe a regular teaching load, the total actual teaching or classroom hours of which a teacher can generally perform in less than eight (8) hours per working day. This is because teaching may also require the teacher to do additional work such as handling an advisory class, preparation of lesson plans and teaching aids, evaluation of students and other related activities. Where, however a teacher is engaged to undertake actual additional teaching work after completing his/her regular teaching load, such additional work is generally referred to as overload. In short, additional work in excess of the regular teaching load is overload work. Regular teaching load and overload work, if any, may constitute a teacher's working day.

Where a teacher is required to perform such overload within the eight (8) hours normal working day, such overload compensation shall be considered part of the basic pay for the purpose of computing the teacher's 13th-month pay. "Overload work" is sometimes misunderstood as synonymous to "overtime work" as this term is used and understood in the Labor Code. These two terms are not the same because overtime work is work rendered in excess of normal working hours of eight in a day (Art. 87, Labor Code). Considering that overload work may be performed either within or outside eight hours in a day, overload work may or may not be overtime work.

3. Concluding Statement

In the light of the foregoing discussions, it is the position of this Department that all basic salary/wage representing payments earned for actual work performed during or within the eight hours in a day, including payments for overload work within eight hours, form part of basic wage and therefore are to be included in the computation of 13th-month pay mandated by PD 851, as amended.24 (Underscoring supplied)

On the other hand, the Legal Services Department of the DOLE holds in its opinion of March 4, 1992 that remunerations for teaching in excess of the regular load shall be excluded in the computation of the 13th-month pay unless, by school policy, the same are considered as part of the basic salary of the qualified teachers.25

This opinion is later affirmed by the DOLE Order, pertinent portions of which are quoted below:

x x x x



2. In accordance with Article 83 of the Labor Code of the Philippines, as amended, the normal hours of work of school academic personnel shall not exceed eight (8) hours a day. Any work done in addition to the eight (8) hours daily work shall constitute overtime work.

3. The normal hours of work of teaching or academic personnel shall be based on their normal or regular teaching loads. Such normal or regular teaching loads shall be in accordance with the policies, rules and standards prescribed by the Department of Education, Culture and Sports, the Commission on Higher Education and the Technical Education and Skills Development Authority. Any teaching load in excess of the normal or regular teaching load shall be considered as overload. Overload partakes of the nature of temporary extra assignment and compensation therefore shall be considered as an overload honorarium if performed within the 8-hour work period and does not form part of the regular or basic pay. Overload performed beyond the eight-hour daily work is overtime work.26 (Emphasis supplied)

It was the above-quoted DOLE Order which was used by the LA as basis for ruling against herein petitioner.

The petitioner’s claim that the DOLE Order should not be made to apply to the present case because said Order was issued only in 1996, approximately four years after the present case was initiated before the Regional Arbitration Branch of the NLRC, is not without basis. The general rule is that administrative rulings and circulars shall not be given retroactive effect.27

Nevertheless, it is a settled rule that when an administrative or executive agency renders an opinion or issues a statement of policy, it merely interprets a pre-existing law and the administrative interpretation is at best advisory for it is the courts that finally determine what the law means.28

In the present case, while the DOLE Order may not be applicable, the Court finds that overload pay should be excluded from the computation of the 13th-month pay of petitioner's members.

In resolving the issue of the inclusion or exclusion of overload pay in the computation of a teacher's 13th-month pay, it is decisive to determine what "basic salary" includes and excludes.

In this respect, the Court's disquisition in San Miguel Corporation v. Inciong29 is instructive, to wit:

Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as the basis in the determination of his 13th month pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus.

Under the Rules and Regulations Implementing Presidential Decree 851, the following compensations are deemed not part of the basic salary:

a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instruction No. 174;

b) Profit sharing payments;

c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975.

Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by the then Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th-month pay.

The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of Instruction No. 174 and profit sharing payments indicate the intention to strip basic salary of other payments which are properly considered as "fringe" benefits. Likewise, the catch-all exclusionary phrase "all allowances and monetary benefits which are not considered or integrated as part of the basic salary" shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or "fringe" benefits.

Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more emphatic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay.





While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically, exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary.

The all-embracing phrase "earnings and other remunerations" which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works performed on rest days and special holidays, pay for regular holidays and night differentials. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. If they were not so excluded, it is hard to find any "earnings and other remunerations" expressly excluded in the computation of the 13th-month pay. Then the exclusionary provision would prove to be idle and with no purpose.

This conclusion finds strong support under the Labor Code of the Philippines. To cite a few provisions:

"Art. 87 – Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, additional compensation equivalent to his regular wage plus at least twenty-five (25%) percent thereof."

It is clear that overtime pay is an additional compensation other than and added to the regular wage or basic salary, for reason of which such is categorically excluded from the definition of basic salary under the Supplementary Rules and Regulations Implementing Presidential Decree 851.

In Article 93 of the same Code, paragraph

"c.) work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee."

It is likewise clear that premium for special holiday which is at least 30% of the regular wage is an additional compensation other than and added to the regular wage or basic salary. For similar reason it shall not be considered in the computation of the 13th -month pay.30

In the same manner that payment for overtime work and work performed during special holidays is considered as additional compensation apart and distinct from an employee's regular wage or basic salary, an overload pay, owing to its very nature and definition, may not be considered as part of a teacher's regular or basic salary, because it is being paid for additional work performed in excess of the regular teaching load.

The peculiarity of an overload lies in the fact that it may be performed within the normal eight-hour working day. This is the only reason why the DOLE, in its explanatory bulletin, finds it proper to include a teacher's overload pay in the determination of his or her 13th-month pay. However, the DOLE loses sight of the fact that even if it is performed within the normal eight-hour working day, an overload is still an additional or extra teaching work which is performed after the regular teaching load has been completed. Hence, any pay given as compensation for such additional work should be considered as extra and not deemed as part of the regular or basic salary.

Moreover, petitioner failed to refute private respondent's contention that excess teaching load is paid by the hour, while the regular teaching load is being paid on a monthly basis; and that the assignment of overload is subject to the availability of teaching loads. This only goes to show that overload pay is not integrated with a teacher's basic salary for his or her regular teaching load. In addition, overload varies from one semester to another, as it is dependent upon the availability of extra teaching loads. As such, it is not legally feasible to consider payments for such overload as part of a teacher's regular or basic salary. Verily, overload pay may not be included as basis for determining a teacher's 13th-month pay.

WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.

SO ORDERED.

CALTEX REGULAR EMPLOYEES AT MANILA OFFICE, LEGAZPI BULK DEPOT AND MARINDUQUE BULK DEPOT-(MACLU), petitioners,


vs.CALTEX (PHILIPPINES), INC. and NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), respondents.

FELICIANO, J.:

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 thisAgreement. 1 (Emphasis supplied).

Pertinent portions of Annex "B" of the 1985 CBA are also quoted here as follows:

Annex "B"

Computation of:

Regular Day PayOvertime PayNight Shift Differential PayDay Off PayExcess of 40 hours within a calendar weekSunday Premium PayHoliday Premium Pay

Employee's Basic Hourly Wage Rate:

Monthly Base Pay

———————X = (21.667) (8)

A. Regular Pay

1) Hourly rate= X

2) OT Hourly Rate 12 MN= (X + 50% X)

3) NSD 6 PM - 12 MN= (X + 25% X)

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

5) NSD 12 MN - 6 AM= (X + 50% X)

6) OT Hourly Rate NSD 12 MN - 6 AM= (X + 50% X) + 50% (X + 50% X)

B. Regular First Day Off

1. Hourly Rate= (X + 50% X)

2. OT Hourly Rate= (X + 50% X) + 50% (x + 50% X)

3. NSD 6 PM - 12 MN= [ (X + 50% X) + 25% (X + 50% X) ]

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 - 6 AM= [ (X + 50% X) + 50% (X + 50% X) ]

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


2. OT Hourly Rate= (X + 100% X) + 50% (X + 100% X)

3. NSD 6 PM - 12MN= [ (X + 100% X) + 25% (X + 100%) ]

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 - 6 AM= [ (X + 100% X) + 50% (X + 100% X) ]


D. Excess of 40 Hours within a Calendar Week



3. NSD 6 PM - 12MN= [ (X + 50% X) + 25% (X + 50% X) ]


5. NSD 12 MN - 6 AM= [ (X + 50% X) + 50% (X + 50% X) ]


E. Sunday as a Normal Work Day



3. NSD 6 PM - 12 MN= [ (X + 100% X) + 25% (X + 100% X) ]


5. NSD 12 MN - 6 AM= [ (X + 100% X) + 50% (X + 100% X) ]


F. Sunday as day off



3. NSD 6 PM - 12 MN= [ (X + 100% X) + 25% (X+ 100% X) ]

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 - 6 AM= [ (X + 100% X) + 50% (X + 100% X) ]


G. Holiday as Normal Work Day



3. NSD 6 PM - 12 MN= [ (X + 150% X) + 25% (X + 150% X) ]


5. NSD 12 MN - 6 AM= [ (X + 150% X) + 50% (X + 150% X) ]


H. Holiday as Day Off



3. NSD 6 PM - 12 MN= [ (X + 150% X) + 25% (X + 150% X) ]

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 - 6 AM= [ (X + 150% X) + 50% (X + 150% X) ]

6. OT Hourly Rate= [ (X + 150% X) + 50% (X + 150% X) ] + 50%[ (X + 150% X) + 50% (X + 150% X) ]

7. * Hourly Rate for less than 8 hours= (150% X)

* 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 a company 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.

SO ORDERED.

CRISTONICO B. LEGAHI, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and UNITED PHILIPPINE LINES, INC., NORTHSOUTH SHIP MGT., (PTE), LTD., SINGAPORE, GREGORIO V. DE LIMA, JR., TOR KARLSEN and PIONEER INSURANCE & SURETY CORP., respondents.

KAPUNAN, J.:

At issue is the validity of petitioner's dismissal from his employment.

In a complaint filed with the Philippine Overseas Employment Administration (POEA), Cristonico B. Legahi alleged that he was hired as "Chief Cook" aboard M/V "Federal Nord" by the Northsouth Ship Management (PTE), Ltd., Singapore and represented by its local agent United Philippine Lines, Inc. (UPLI).

The contract of employment stipulated that his term of employment was for ten months beginning October 9, 1992 with a basic monthly salary of US$450.00 with 44 hours weekly as minimum number of hours worked with a fixed overtime pay (OT) of $185.00 and three (3) days leave with pay every month.

Sometime in November, 1992 petitioner was asked by the Shipmaster to prepare a victualling cost statement for the month of October, 1992. After learning that such preparation involves mathematical skills, as it would require estimation of food cost, value of stocks, etc. he intimated that he did not know how to do such work as it was not part of the duties of a chief cook. He was told that it was not a difficult job and that he only needed to copy the previous forms. After much reluctance, petitioner nonetheless prepared the statement in deference to the Shipmaster.

In December, petitioner was requested again to prepare the victualling cost statement for the month of November. He obeyed since he was afraid he would earn the ire of his superiors if he refused.

Sometime in January, 1993, the Shipmaster asked petitioner to do the victualling cost statement for December which he complied. On January 6, 1993, the Shipmaster requested the petitioner to prepare a corrected victualling statement for the same month of December. Petitioner asked the Shipmaster if he could defer the correction as he was busy doing his chores. The response certainly did not sit well with the Shipmaster so he was called for a meeting which petitioner did not attend.

On January 14, 1993, a committee was formed headed by the Shipmaster himself with the Chief Officer, Chief Engineer and Bosun as members.

In this meeting, the Shipmaster read to him the offenses he committed on board. He was asked to answer the charges but petitioner opted to remain silent. Thereafter, petitioner was informed that he was dismissed.

The next day, petitioner was repatriated to the Philippines through the assistance of the Philippine Consulate.

Upon arrival or on February 16, 1993, petitioner filed with the POEA a complaint for illegal dismissal against private respondents. He sought the payment of his salary corresponding to the unexpired portion of his contract, unpaid overtime pay, leave pay, salary differential and damages.

In answer to the complaint, private respondent stated that prior to petitioner's deployment, he was asked if he knew how to prepare the victualling cost statement which he answered yes. On January 6, 1993, petitioner was asked to prepare the statement. He refused and even arrogantly replied that "the Shipmaster should let some other

officer do the job since he only came to the ship to cook." On January 13, 1993, petitioner left the vessel without permission and did not perform his job that day. On January 14, 1993, a committee was formed to hear the case of petitioner. Petitioner remained silent so the committee decided to send him home. Contrary to petitioner's allegation, it was not the Philippine Consulate, but the shipowner's agent, Navios Ship Agencies, which arranged his repatriation. The respondent noticed petitioner to be very homesick and surmised that he deliberately committed the offenses just so he could be sent home. Upon his return, petitioner did not even report to the local representative UPLI implying that he had no cause of action against them. Petitioner was terminated for just cause and must, therefore, reimburse private respondent for the cost of repatriation.

On April 6, 1994, the POEA promulgated a decision finding that there was just cause for petitioner's dismissal.

On appeal to the National Labor Relations Commission (NLRC), the Commission affirmed in toto the POEA decision.

Hence, this petition.

To constitute a valid dismissal from employment, two (2) requisites must concur: (a) the dismissal must be for any of the causes provided in Article 282 of the Labor Code, and (b) the employee must be accorded due process, the elements of which are notice and the opportunity to be heard and to defend himself. 1

Procedural due process requires that the employee must be apprised of the charges against him. He must be given reasonable time to answer the charges, allowed ample opportunity to be heard and defend himself, and assisted by a representative if the employee so desires. 2 Two written notices are required before termination of employment can be legally effected. They are: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought, and (2) the subsequent notice which informs the employee of the employer's decision to dismiss him; 3 not to mention the opportunity to answer and rebut the charges against him, in between such notices. 4

In the case at bar, the evidence on record belies private respondents' claim that petitioner was afforded due process. The abstract of the logbook states:

M/V FEDERAL NORD

ABSTRACT FROM DECK LOG BOOK RE: CH/COOK LEGAHI CRISTONICO B.

6th JANUARY 1993

AT 0900 HRS. TODAY THE MASTER WAS ASKING THE CH/COOK LAGAHE, CRISTONICO IF HE OR THE R/OFF COULD HELP HIM WITH THE VICT. COST STATEMENT WHICH HE WAS NOT ABLE TO DO HIMSELF CORRECT.

WHEN THE MASTER TOLD HIM TO TAKE TIME AND TRY TO CORRECT HIS REPLY IN A BAD WAY WAS, LET SOME OFFICERS DO THE JOB. I ONLY COME TO THE SHIP TO COOK. HE ALSO REFUSED TO MEET IN THE MASTER'S OFFICE TOGETHER WITH THE CH/OFFICER WHEN HE WAS ORDERED TO.

SINCE HE IS REFUSING TO TAKE ORDERS FROM THE MASTER OF THE SHIP HE WILL BE SENT HOME IN FIRST POSSIBLE PORT WERE HE CAN BE RELIEFED (SIC).

13th JANUARY 1993

AT 0700 HRS. THE CH/COOK LEGAHI CRISTONICO B. LEFT THE VESSEL WITHOUT PERMISSION, HE RETURNED LATER IN THE DAY BUT WAS NOT DOING ANY WORK.

14th JANUARY 1993

AT 1030 HRS. A HEARING WAS HELD IN THE OWNERS OFFICE REGARDING THE DISMISSAL OF CH/COOK LEGAHI CRISTONICO B. MASTER AS CHAIRMAN AND COMMITTEE CONSISTING OF CH/OFF. PULGO LEONIDES T., CH/ENGR. SERMONINA TOMAS C., AND BOSUN DAMOCLES CAMILO A. THE CASE OF DISMISSAL WAS READ OUT FOR THE CH/COOK LEGAHI ACCORDING TO THE PROCEDURE PARA 16 IN THE SEAMAN'S ACT. ENTERED IN THE LOG BOOK 6/1-93 AND 13/1-93. AT

1140 THE HEARING WAS ENDED, AND AT 1200 HRS. THE CH/COOK LEGAHI WILL LEAVE THE VESSEL TO BE SENT HOME. 5

Reading between the lines from the entries of the logbook, which by the very nature of things could well be self-serving, it is rather apparent that as early as January 6, 1993, the employer had already decided to dismiss petitioner and sent home for his alleged refusal to obey the orders of his superiors. On January 14, 1993, the committee read to petitioner his alleged offenses which were his refusal to take orders from his superior on January 6 and his leaving the vessel without permission on January 13. When petitioner remained silent, the committee informed him that he was dismissed. He was sent home that same day. Petitioner was not given reasonable time to answer the charges hurled against him or to defend himself. The notice apprising him of the charges and the notice of dismissal were done in one morning — all in the January 14 committee hearing. The submission that the entry in the logbook made on January 6 which stated that for petitioner's refusal "to take orders from the master of the ship he will be sent home in first possible port" was sufficient compliance of the first notice requirement is not well-taken. This is not the kind of notice that satisfies due process contemplated by law. In such a case where there is a failure to comply with the requirements of the law as to the notice and hearing, the dismissal is certainly tainted with illegality.

On the substantive issue, we find no just cause for petitioner's dismissal. According to the POEA, petitioner was found guilty for insubordination for his refusal "to obey the order of the master to prepare the victual statement on January 6, 1993," 6 which was presumably for the month of January.

The NLRC, which simply adopted in toto the findings of the POEA, concluded that complainant refused albeit in a bad manner the request of the Shipmaster to prepare a correct victualling cost statement for the month of December.

Based on the POEA findings, petitioner was dismissed because of his refusal to prepare the victualling statement for the month of January, 1993. The facts as found by the POEA are all muddled up. The victualling cost statement for the month of January was not yet due when he was asked to prepare the same on January 6 of that month. A victualling cost statement was necessary to show the food expense incurred for the past month, not for the present month. Thus, from the victualling statements submitted for the month of October, November and December, 1992, it can be seen that the period indicated therein began on the first day of each month and ended on the last day of said month. This means that the report for October was made in November, for November in December, and that for December in January. Such being the case, petitioner's refusal to prepare the victualling statement of January was justified since the victualling cost for the month of January was not yet due or necessary.

On the other hand, the NLRC's conclusion that petitioner refused to correct the victualling statement for the month of December as ordered to, was also not sufficient basis for his dismissal. There is no doubt that petitioner had complied with his superior's orders to prepare the statement for December. It was only the correction of the December statement that he requested to defer which the Shipmaster took as a downright refusal to make and considered such act as a serious and gross insubordination.

For willful disobedience to be considered as just cause for dismissal, the employee's conduct must be willful or intentional, the willfulness being characterized by a wrongful and perverse attitude and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to discharge. 7

In the instant case, it was actually not petitioner's duty to prepare the victualling statement. The allegation that this was part of his duty as chief cook and the fact that he was aware of such duty when he was interviewed for the post is only self-serving and without basis. The employment contract does not mention anything that this was part of his duty as chief cook. 8 A perusal of the victualling cost statement form meanwhile reveals that only the signatures of a Relieving Chief Steward and the Chief Master were required. 9 Nowhere does it contain that the signature of the chief cook was necessary. Even assuming that petitioner refused to obey the order of his superior to prepare a corrected victualling cost statement for December, although he maintained that he just asked for time to do it, as he was then busy performing his usual duty, which we believe to be the case, his refusal cannot be considered as one being characterized by a "wrongful and perverse attitude." From the beginning, petitioner already intimated that he did not know how to accomplish the victual cost statement since it entailed some mathematical skills which he admittedly did not have. Indeed, to use his own words, "he came aboard only to cook." His capability on manual skill was limited to cooking and nothing more and for which reason he applied for the job as chief cook and was eventually hired as such. The fact that he was able to do the victualling cost statements for the past three months was an extra work on his part. His failure or alleged refusal to go on with the work did not merit the severest penalty of dismissal from the service and his immediate repatriation without even affording him due process of law. 10

Petitioner's dismissal without a valid cause constitute a breach of contract. Consequently, he should only be paid the unexpired portion of his employment contract. However, the payment of the overtime pay should be disallowed in the light of our ruling in the case of Cagampan v. NLRC, 11 where we held that:

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 thinking 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 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 a 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)

In the same vein, the claim for day's leave pay for the unexpired portion of the contract is unwarranted since the same is given during the actual service of the seaman. 12

The claim for moral and exemplary damages are deleted for lack of sufficient basis. Considering that petitioner was forced to litigate, we hold that the amount of P10,000.00 is a reasonable and fair compensation for the legal services rendered by counsel.

WHEREFORE, the petition is GRANTED. The decision of the NLRC is SET ASIDE. Private respondent is hereby ORDERED to pay only the petitioner his salary equivalent to seven (7) months corresponding to the unexpired portion of the contract plus attorney's fees of P10,000.00.

SO ORDERED.

ABDULJUAHID R. PIGCAULAN,* Petitioner, vs.SECURITY and CREDIT NVESTIGATION, INC. and/or RENE AMBY REYES, Respondents.

D E C I S I O N

DEL CASTILLO, J.:

It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the employer that the burden of proving payment of these claims rests.

This Petition for Review on Certiorari1 assails the February 24, 2006 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 85515, which granted the petition for certiorari filed therewith, set aside the March 23, 20043 and June




14, 20044 Resolutions of the National Labor Relations Commission (NLRC), and dismissed the complaint filed by Oliver R. Canoy (Canoy) and petitioner Abduljuahid R. Pigcaulan (Pigcaulan) against respondent Security and Credit Investigation, Inc. (SCII) and its General Manager, respondent Rene Amby Reyes. Likewise assailed is the June 28, 2006 Resolution5 denying Canoy’s and Pigcaulan’s Motion for Reconsideration.6

Factual Antecedents

Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCII’s different clients. Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints7 for underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th month pays. These complaints were later on consolidated as they involved the same causes of action.

Canoy and Pigcaulan, in support of their claim, submitted their respective daily time records reflecting the number of hours served and their wages for the same. They likewise presented itemized lists of their claims for the corresponding periods served.

Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries and other benefits under the law; that the salaries they received were above the statutory minimum wage and the rates provided by the Philippine Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holiday pay were already included in the computation of their monthly salaries; that they were paid additional premium of 30% in addition to their basic salary whenever they were required to work on Sundays and 200% of their salary for work done on holidays; and, that Canoy and Pigcaulan were paid the corresponding 13th month pay for the years 1998 and 1999. In support thereof, copies of payroll listings8 and lists of employees who received their 13th month pay for the periods December 1997 to November 1998 and December 1998 to November 19999 were presented. In addition, respondents contended that Canoy’s and Pigcaulan’s monetary claims should only be limited to the past three years of employment pursuant to the rule on prescription of claims.

Ruling of the Labor Arbiter

Giving credence to the itemized computations and representative daily time records submitted by Canoy and Pigcaulan, Labor Arbiter Manuel P. Asuncion awarded them their monetary claims in his Decision10 dated June 6, 2002. The Labor Arbiter held that the payroll listings presented by the respondents did not prove that Canoy and Pigcaulan were duly paid as same were not signed by the latter or by any SCII officer. The 13th month payroll was, however, acknowledged as sufficient proof of payment, for it bears Canoy’s and Pigcaulan’s signatures. Thus, without indicating any detailed computation of the judgment award, the Labor Arbiter ordered the payment of overtime pay, holiday pay, service incentive leave pay and proportionate 13th month pay for the year 2000 in favor of Canoy and Pigcaulan, viz:

WHEREFORE, the respondents are hereby ordered to pay the complainants: 1) their salary differentials in the amount of P166,849.60 for Oliver Canoy and P121,765.44 for Abduljuahid Pigcaulan; 2) the sum of P3,075.20 for Canoy and P2,449.71 for Pigcaulan for service incentive leave pay and; [3]) the sum of P1,481.85 for Canoy and P1,065.35 for Pigcaulan as proportionate 13th month pay for the year 2000. The rest of the claims are dismissed for lack of sufficient basis to make an award.

SO ORDERED.11

Ruling of the National Labor Relations Commission

Respondents appealed to the NLRC. They alleged that there was no basis

for the awards made because aside from the self-serving itemized computations, no representative daily time record was presented by Canoy and Pigcaulan. On the contrary, respondents asserted that the payroll listings they submitted should have been given more probative value. To strengthen their cause, they attached to their Memorandum on Appeal payrolls12 bearing the individual signatures of Canoy and Pigcaulan to show that the latter have received their salaries, as well as copies of transmittal letters13 to the bank to show that the salaries reflected in the payrolls were directly deposited to the ATM accounts of SCII’s employees.

The NLRC, however, in a Resolution14 dated March 23, 2004, dismissed the appeal and held that the evidence show underpayment of salaries as well as non-payment of service incentive leave benefit. Accordingly, the Labor Arbiter’s Decision was sustained. The motion for reconsideration thereto was likewise dismissed by the NLRC in a Resolution15 dated June 14, 2004.

Ruling of the Court of Appeals













In respondents’ petition for certiorari with prayer for the issuance of a temporary restraining order and preliminary injunction16 before the CA, they attributed grave abuse of discretion on the part of the NLRC in finding that Canoy and Pigcaulan are entitled to salary differentials, service incentive leave pay and proportionate 13th month pay and in arriving at amounts without providing sufficient bases therefor.

The CA, in its Decision17 dated February 24, 2006, set aside the rulings of

both the Labor Arbiter and the NLRC after noting that there were no factual and legal bases mentioned in the questioned rulings to support the conclusions made. Consequently, it dismissed all the monetary claims of Canoy and Pigcaulan on the following rationale:

First. The Labor Arbiter disregarded the NLRC rule that, in cases involving money awards and at all events, as far as practicable, the decision shall embody the detailed and full amount awarded.

Second. The Labor Arbiter found that the payrolls submitted by SCII have no probative value for being unsigned by Canoy, when, in fact, said payrolls, particularly the payrolls from 1998 to 1999 indicate the individual signatures of Canoy.

Third. The Labor Arbiter did not state in his decision the substance of the evidence adduced by Pigcaulan and Canoy as well as the laws or jurisprudence that would show that the two are indeed entitled to the salary differential and incentive leave pays.

Fourth. The Labor Arbiter held Reyes liable together with SCII for the payment of the claimed salaries and benefits despite the absence of proof that Reyes deliberately or maliciously designed to evade SCII’s alleged financial obligation; hence the Labor Arbiter ignored that SCII has a corporate personality separate and distinct from Reyes. To justify solidary liability, there must be an allegation and showing that the officers of the corporation deliberately or maliciously designed to evade the financial obligation of the corporation.18

Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied by the CA in a Resolution19 dated June 28, 2006.

Hence, the present Petition for Review on Certiorari.

Issues

The petition ascribes upon the CA the following errors:

I. The Honorable Court of Appeals erred when it dismissed the complaint on mere alleged failure of the Labor Arbiter and the NLRC to observe the prescribed form of decision, instead of remanding the case for reformation of the decision to include the desired detailed computation.

II. The Honorable Court of Appeals erred when it [made] complainants suffer the consequences of the alleged non-observance by the Labor Arbiter and NLRC of the prescribed forms of decisions considering that they have complied with all needful acts required to support their claims.

III. The Honorable Court of Appeals erred when it dismissed the complaint allegedly due to absence of legal and factual [bases] despite attendance of substantial evidence in the records.20

It is well to note that while the caption of the petition reflects both the names of Canoy and Pigcaulan as petitioners, it appears from its body that it is being filed solely by Pigcaulan. In fact, the Verification and Certification of Non-Forum Shopping was executed by Pigcaulan alone.

In his Petition, Pigcaulan submits that the Labor Arbiter and the NLRC are not strictly bound by the rules. And even so, the rules do not mandate that a detailed computation of how the amount awarded was arrived at should be embodied in the decision. Instead, a statement of the nature or a description of the amount awarded and the specific figure of the same will suffice. Besides, his and Canoy’s claims were supported by substantial evidence in the form of the handwritten detailed computations which the Labor Arbiter termed as "representative daily time records," showing that they were not properly compensated for work rendered. Thus, the CA should have remanded the case instead of outrightly dismissing it.






In their Comment,21 respondents point out that since it was only Pigcaulan who filed the petition, the CA Decision has already become final and binding upon Canoy. As to Pigcaulan’s arguments, respondents submit that they were able to present sufficient evidence to prove payment of just salaries and benefits, which bits of evidence were unfortunately ignored by the Labor Arbiter and the NLRC. Fittingly, the CA reconsidered these pieces of evidence and properly appreciated them. Hence, it was correct in dismissing the claims for failure of Canoy and Pigcaulan to discharge their burden to disprove payment.

Pigcaulan, this time joined by Canoy, asserts in his Reply22 that his filing of the present petition redounds likewise to Canoy’s benefit since their complaints were consolidated below. As such, they maintain that any kind of disposition made in favor or against either of them would inevitably apply to the other. Hence, the institution of the petition solely by Pigcaulan does not render the assailed Decision final as to Canoy. Nonetheless, in said reply they appended Canoy’s affidavit23 where he verified under oath the contents and allegations of the petition filed by Pigcaulan and also attested to the authenticity of its annexes. Canoy, however, failed to certify that he had not filed any action or claim in another court or tribunal involving the same issues. He likewise explains in said affidavit that his absence during the preparation and filing of the petition was caused by severe financial distress and his failure to inform anyone of his whereabouts.

Our Ruling

The assailed CA Decision is considered final as to Canoy.

We have examined the petition and find that same was filed by Pigcaulan solely on his own behalf. This is very clear from the petition’s prefatory which is phrased as follows:

COMES NOW Petitioner Abduljuahid R. Pigcaulan, by counsel, unto this Honorable Court x x x. (Emphasis supplied.)

Also, under the heading "Parties", only Pigcaulan is mentioned as petitioner and consistent with this, the body of the petition refers only to a "petitioner" and never in its plural form "petitioners". Aside from the fact that the Verification and Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly and particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is the "Counsel for Petitioner Adbuljuahid Pigcaulan" only. In view of these, there is therefore, no doubt, that the petition was brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has already become final and executory as to him.

Canoy cannot now simply incorporate in his affidavit a verification of the contents and allegations of the petition as he is not one of the petitioners therein. Suffice it to state that it would have been different had the said petition been filed in behalf of both Canoy and Pigcaulan. In such a case, subsequent submission of a verification may be allowed as non-compliance therewith or a defect therein does not necessarily render the pleading, or the petition as in this case, fatally defective.24 "The court may order its submission or correction, or act on the pleading if the attending circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be served thereby. Further, a verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct."25 However, even if it were so, we note that Canoy still failed to submit or at least incorporate in his affidavit a certificate of non-forum shopping.

The filing of a certificate of non-forum shopping is mandatory so much so that non-compliance could only be tolerated by special circumstances and compelling reasons.26 This Court has held that when there are several petitioners, all of them must execute and sign the certification against forum shopping; otherwise, those who did not sign will be dropped as parties to the case.27 True, we held that in some cases, execution by only one of the petitioners on behalf of the other petitioners constitutes substantial compliance with the rule on the filing of a certificate of non-forum shopping on the ground of common interest or common cause of action or defense.28 We, however, find that common interest is not present in the instant petition. To recall, Canoy’s and Pigcaulan’s complaints were consolidated because they both sought the same reliefs against the same respondents. This does not, however, mean that they share a common interest or defense. The evidence required to substantiate their claims may not be the same. A particular evidence which could sustain Canoy’s action may not effectively serve as sufficient to support Pigcaulan’s claim.

Besides, assuming that the petition is also filed on his behalf, Canoy failed to show any reasonable cause for his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, to be prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from financial distress. However, Canoy failed to advance any justifiable reason why he did not inform anyone of his whereabouts when he knows that he has a pending case against his former employer. Sadly, his lack of prudence and diligence cannot merit the court’s consideration or sympathy. It must be emphasized at this point that procedural rules should not be









ignored simply because their non-observance may result in prejudice to a party’s substantial rights. The Rules of Court should be followed except only for the most persuasive of reasons.29

Having declared the present petition as solely filed by Pigcaulan, this Court shall consider the subsequent pleadings, although apparently filed under his and Canoy’s name, as solely filed by the former.

There was no substantial evidence to support the grant of overtime pay.

The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13th month pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computations they submitted which he considered as representative daily time records to substantiate the award of salary differentials. The NLRC then sustained the award on the ground that there was substantial evidence of underpayment of salaries and benefits.

We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove that the two were underpaid of their salaries. We find nothing in the records which could substantially support Pigcaulan’s contention that he had rendered service beyond eight hours to entitle him to overtime pay and during Sundays to entitle him to restday pay. Hence, in the absence of any concrete proof that additional service beyond the normal working hours and days had indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan.

Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13th month pay for year 2000.

However, with respect to the award for holiday pay, service incentive leave

pay and 13th month pay, we affirm and rule that Pigcaulan is entitled to these benefits.

Article 94 of the Labor Code provides that:

ART. 94. RIGHT TO HOLIDAY PAY. – (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

x x x x

While Article 95 of the Labor Code provides:

ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. – (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive of five days with pay.

x x x x

Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work.30 Likewise, express provision of the law entitles him to service incentive leave benefit for he rendered service for more than a year already. Furthermore, under Presidential Decree No. 851,31 he should be paid his 13th month pay. As employer, SCII has the burden of proving that it has paid these benefits to its employees.32

SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan received their salaries as well as benefits which it claimed are already integrated in the employees’ monthly salaries. However, the documents presented do not prove SCII’s allegation. SCII failed to show any other concrete proof by means of records, pertinent files or similar documents reflecting that the specific claims have been paid. With respect to 13th month pay, SCII presented proof that this benefit was paid but only for the years 1998 and 1999. To repeat, the burden of proving payment of these monetary claims rests on SCII, being the employer. It is a rule that one who pleads payment has the burden of proving it. "Even when the plaintiff alleges non-payment, still the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment."33 Since SCII failed to provide convincing proof that it has already settled the claims, Pigcaulan should be paid his holiday pay, service incentive leave benefits and proportionate 13th month pay for the year 2000.






The CA erred in dismissing the claims instead of remanding the case to the Labor Arbiter for a detailed computation of the judgment award.

Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary awards granted.lawphi1 Such failure, however, should not result in prejudice to the substantial rights of the party.1avvphi1 While we disallow the grant of overtime pay and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter of right, to his holiday pay, service incentive leave pay and 13th month pay for year 2000. Hence, the CA is not correct in dismissing Pigcaulan’s claims in its entirety.

Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within three years from the time the cause of action accrued,34 Pigcaulan can only demand the amounts due him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are insufficient to use as bases to properly compute Pigcaulan’s claims, the case should be remanded to the Labor Arbiter for a detailed computation of the monetary benefits due to him.

WHEREFORE, the petition is GRANTED. The Decision dated February 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 are REVERSED and SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared entitled to holiday pay and service incentive leave pay for the years 1997-2000 and proportionate 13th month pay for the year 2000.

The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and to make a detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit Investigation Inc. should pay without delay.

SO ORDERED.

ASSOCIATION OF INTERNATIONAL SHIPPING LINES, INC., in its own behalf and in representation of its members: AMERICAN TRANSPORT LINES, INC., AUSTRALIAN NATIONAL LINE, FLEET TRANS INTERNATIONAL AND UNITED ARAB SHIPPING CO., DONGNAMA SHIPPING CO., HANJIN SHIPPING COMPANY, LTD., HAPAG-LLOYD A/G, KNUTSEN LINE, KYOWA LINE, NEPTUNE ORIENT LINE, ORIENT OVERSEAS CONTAINER LINE, P & O CONTAINERS, LTD., P & O SWIRE CONTAINERS AND WILH WILHELMSEN LINE A/S, REGIONAL CONTAINERS LINES (PTE), LTD., SENATOR LINE BREMEN GERMANY, TOKYO SENPAKU KAISHA, LTD., UNIGLORY LINE, WAN HAI LINES, LTD., WESTWIND LINE, ZIM ISRAEL NAVIGATION CO., LTD., COMPANIA SUD AMERICANA DE VAPORES S.A., DEUTSCHE SEEREEDEREI ROSTOCK (DSR) GERMANY AND ARIMURA SANGYO COMPANY, LTD., PACIFIC INTERNATIONAL LINES (PTE), LTD., COMPAGNIE MARITIME D' AFFRETEMENT (CMA), YANGMING MARINE TRANSPORT CORP., NIPON YUSEN KAISHA, HYUNDAI MERCHANT MARINE CO., LTD., MALAYSIAN INTERNATIONAL SHIPPING CORPORATION BERHAD, BOLT ORIENT LINE, MITSUI O.S.K. LINES, LTD., PHILS. MICRONESIA & ORIENT NAVIGATION CO. (PMSO LINE), LLOYD TRIESTINO DI NAVIGAZIONE S.P.A.N., HEUNG-A SHIPPING COMPANY, KAWASAKI KISEN KAISHAARIMURA SANGYO COMPANY, LTD., AMERICAN PRESIDENT LINES, LTD., MAERSK FILIPINAS, INC., EASTERN SHIPPING LINES, INC., NEDLLOYD LINES, INC., PHILIPPINE PRESIDENT LINES, LTD., SEA-LAND SERVICE, INC., MADRIGAL-WAN HAI LINES, petitioners, vs.UNITED HARBOR PILOTS' ASSOCIATION OF THE PHILIPPINES, INC., respondent.

D E C I S I O N

REYES, R.T., J.:

PAYMENT of nighttime and overtime differential of harbor pilots is the object of this petition for review on certiorari1 of the Decision2 of the Court of Appeals (CA) partly setting aside the Order3 of the Regional Trial Court (RTC), Branch 36, Manila pertaining to a motion for execution.

The Facts

On March 1, 1985, the Philippine Ports Authority (PPA) issued PPA Administrative Order (AO) No. 03-85 substantially adopting the provisions of Customs Administrative Order (CAO) No. 15-654 on the payment of additional charges for pilotage service5 rendered "between 1800H to 1600H," or on "Sundays or Holidays," practically referring to "nighttime and overtime pay." Section 16 of the AO reads:

Section 16. Payment of Pilotage Service Fees. - Any vessel which employs a Harbor Pilot shall pay the pilotage fees prescribed in this Order and shall comply with the following conditions:

http://www.lawphil.net/judjuris/juri2008/aug2008/gr_172029_2008.html#fnt5






x x x x

c) When pilotage service is rendered at any port between 1800H to 1600H, Sundays or Holidays, an additional charge of one hundred (100%) percentum over the regular pilotage fees shall be paid by vessels engaged in foreign trade, and fifty (50%) percentum by coastwise vessels. This additional charge or premium fee for nighttime pilotage service shall likewise be paid when the pilotage service is commenced before and terminated after sunrise.

Provided, however, that no premium fee shall be considered for service rendered after 1800H if it shall be proven that the service can be undertaken before such hours after the one (1) hour grace period, as provided in paragraph (d) of this section, has expired. (Emphasis supplied)

On February 3, 1986, responding to the clamor of harbor pilots for the increase and rationalization of pilotage service charges, then President Ferdinand E. Marcos issued Executive Order (EO) No. 1088 providing for uniform and modified rates for pilotage services rendered in all Philippine ports. It fixed the rate of pilotage fees on the basis of the "vessel's tonnage" and provided that the "rate for docking and undocking anchorage, conduction and shifting and other related special services is equal to 100%." EO No. 1088 also contained a repealing clause stating that all orders, letters of instruction, rules, regulations, and issuances inconsistent with it are repealed or amended accordingly.6

Subsequently, pursuant to EO No. 1088, the PPA issued several resolutions disallowing overtime premium or charge and recalling its recommendation for a reasonable night premium pay or night differential pay, viz.:

RESOLUTION NO. 14867

RESOLVED, That on motion duly seconded, and in consideration of the proper court order(s) mandating PPA to implement the pilotage rates under Executive Order No. 1088, the overtime premium or charge collected by Harbor Pilots is hereby disallowed and Section 16(c) of Article III of PPA Administrative Order No. 03-85, prescribing general guidelines on pilotage services, be, as it is hereby repealed and modified accordingly;

RESOLVED FURTHER, That the General Manager, be, as he is hereby authorized, to issue the corresponding amendatory guidelines.


RESOLVED, That on motion duly seconded, and after taking into consideration the respective positions of the various Harbor Pilot associations and shipping groups, Board Resolution No. 1486, be, as it is hereby reiterated and affirmed, and Management, be, as it is hereby directed to adopt a policy of no overtime pay for pilotage services;

RESOLVED FURTHER, That in lieu of the "no overtime pay policy," Management be, as it is hereby directed, to recommend a reasonable night premium pay or night differential pay for the conduct of the basic pilotage services."


RESOLVED, That on motion duly seconded, and taking into consideration the arguments raised by the Association of International Shipping Lines, Inc., raising certain legal issues on the adoption of Resolution No. 1541, as adopted on November 13, 1995, the proposed PPA Administrative Order No. 19-95, hereto attached and incorporated by reference, recommending amendments to Section 16(c) of PPA Administrative Order No. 03-85, disallowing overtime pay and authorizing instead the collection of nighttime premium pay for pilotage services rendered during nighttime (1800H to 0600H), be, as it is hereby deferred, for further legal review;

RESOLVED FURTHER, That pending review and clarification by the Office of the Government Corporate Counsel of the legal issues on overtime pay/nighttime premium pay, Resolution No. 1541, be, as it is hereby recalled and Resolution No. 1486, as adopted on May 19, 1995, be, as it is hereby reaffirmed.

On the strength of PPA Resolution No. 1486, petitioners Association of International Shipping Lines (AISL) and its members refused to pay respondent United Harbor Pilots' Association of the Philippines, Inc. (UHPAP)'s claims for





nighttime and overtime pay.10 In response, UHPAP threatened to discontinue pilotage services should their claims be continually ignored.11

Petitioners then filed a petition for declaratory relief with the RTC, Branch 36, Manila, docketed as Civil Case No. 96-78400. The issues raised there were: (1) whether EO No. 1088 authorized the payment of nighttime and overtime pay; and (2) whether the rate of pilotage fees enumerated in EO No. 1088 were for "every pilotage maneuver" or for the "entire package of pilotage services."

On January 26, 1998, the RTC granted the petition and declared that respondent UHPAP is not authorized to collect any overtime or night shift differential for pilotage services rendered. The RTC disposed as follows:

WHEREFORE, judgment is hereby rendered granting the petition herein and it is hereby declared that (1) respondent PPA is bereft of authority to impose and respondent UHPAP is not authorized to collect any overtime or night shift differential for pilotage services rendered; and (2) the rates of fees for pilotage services rendered refer to the totality of pilotage services rendered and respondent UHPAP cannot legally charge separate fees for each pilotage service rendered. All billings inconsistent with this decision are declared null and void and petitioners are not liable therefor.

SO ORDERED.12 (Emphasis supplied)

The trial court said that in view of the repealing clause in EO No. 1088, it was axiomatic that all prior issuances inconsistent with it were deemed repealed. Thus, the provisions of Section 16 of PPA AO No. 03-85 on nighttime and overtime pay were "effectively stricken-off the books." It further held that since the rate of pilotage fees enumerated in EO No. 1088 was based on the "vessel's tonnage," it meant that such rate referred to the "entire package of pilotage services." According to the trial court, to rule otherwise is to frustrate the uniformity envisioned by the rationalization scheme.

Respondent UHPAP moved for reconsideration but the motion was denied.

Desiring to secure for its members the payment of nighttime and overtime pay, respondent UHPAP filed directly before this Court a petition for review on certiorari, docketed as G.R. No. 133763, raising the following legal issues for determination: (1) whether EO No. 1088 repealed the provisions of CAO No. 15-65 and PPA AO No. 03-85, as amended, on payment of additional pay for holidays work and premium pay for nighttime service; (2) whether the rates, as fixed in the schedule of fees based on tonnage in EO No. 1088, are to be imposed on every pilotage movement; and (3) whether EO No. 1088 deprived the PPA of its right, duty and obligation to promulgate new rules and rates for payment of fees, including additional pay for holidays and premium pay for nighttime services.

On November 13, 2002, this Court granted the petition and reversed the RTC. This Court held then:

Section 3 of E.O. No. 1088 is a general repealing clause, the effect of which falls under the category of an implied repeal as it does not identify the orders, rules or regulations it intends to abrogate. A repeal by implication is frowned upon in this jurisdiction. It is not favored, unless it is manifest that the legislative authority so intended or unless it is convincingly and unambiguously demonstrated that the subject laws or orders are clearly repugnant and patently inconsistent that they cannot co-exist. This is because the legislative authority is presumed to know the existing law so that if repeal is intended, the proper step is to express it.

There is nothing in E.O. No. 1088 that reveals any intention on the part of Former President Marcos to amend or supersede the provisions of PPA AO No. 03-85 on nighttime and overtime pay. While it provides a general repealing clause, the same is made dependent upon its actual inconsistency with other previous orders, rules, regulations or other issuance. Unfortunately for AISL, we find no inconsistency between E.O. No. 1088 and the provisions of PPA AO No. 03-85. At this juncture, it bears pointing out that these two orders dwell on entirely different subject matters. E.O. No. 1088 provides for uniform and modified rates for pilotage services rendered to foreign and coastwise vessels in all Philippine ports, public or private. The purpose is to rationalize and standardize the pilotage service charges nationwide. Upon the other hand, the subject matter of the controverted provisions of PPA AO No. 03-85 is the payment of the additional charges of nighttime and overtime pay. Plainly, E.O. No. 1088 involves the basic compensation for pilotage service while PPA AO No. 03-85 provides for the additional charges where pilotage service is rendered under certain circumstances. Just as the various wage orders do not repeal the provisions of the Labor Code on nighttime and overtime pay, the same principle holds true with respect to E.O. No. 1088 and PPA AO 03-85. Moreover, this Court adheres to the




rule that every statute must be so construed and harmonized with other statutes as to form a uniform system of jurisprudence. E.O. No. 1088 and PPA AO No. 03-85 should thus be read together and harmonized to give effect to both.

x x x x

While E.O. No. 1088 prescribes the rates of pilotage fees on the basis of the "vessel's tonnage," however, this does not necessarily mean that the said rate shall apply to the totality of pilotage services. If it were so, the benefit intended by E.O. No. 1088 to harbor pilots would be rendered useless and ineffectual. It would create an unjust if not an absurd situation of reducing take home pay of the harbor pilots to a single fee, regardless of the number of services they rendered from the time a vessel arrives up to its departure. It must be remembered that pilotage services cover a variety of maneuvers such as "docking," "undocking anchorage," "conduction," "shifting" and other "related special services." To say that the rate prescribed by E.O. No. 1088 refers to the totality of all these maneuvers is to defeat the benefit intended by the law for harbor pilots. It should be stressed that E.O. No. 1088 was enacted in response to the clamor of harbor pilots for the increase and rationalization of pilotage service charges through the imposition of uniform and adjusted rates. Hence, in keeping with the benefit intended by E.O. No. 1088, the schedule of fees fixed therein based on tonnage should be interpreted as applicable to "each pilotage maneuver" and not to the "totality of the pilotage services."

The use of the word "and" between the words "docking" and "undocking" in paragraph 2 of Section 1 of E.O. No. 1088 should not override the above-mentioned purpose of said law. It is a basic precept of statutory construction that statutes should be construed not so much according to the letter that killeth but in line with the purpose for which they have been enacted. Statutes are to be given such construction as will advance the object, suppress the mischief, and secure the benefits intended.

Furthermore, as can be gleaned from the drafts submitted by the PPA on the guidelines pertaining to the uniform pilotage services to be rendered in all pilotage districts, the PPA is of the interpretation that the rate of pilotage fees fixed by E.O. No. 1088 is to be separately imposed on every pilotage maneuver done by the harbor pilots. This interpretation is likewise made clear in PPA Memorandum Circular No. 42-98, dated October 8, 1998, which clarifies pilotage charges for docking and undocking, as follows -

"To prevent disruption in pilotage service and considering the pendency of the final and executory decision of the Supreme Court on the pilotage rates issue, it is hereby clarified that pilotage fees for docking and undocking of vessels shall be paid as two (2) separate services x x x."

The PPA is the proper government agency tasked with the duty of implementing E.O. No. 1088. As such, its interpretation of said law carries great weight and consideration. In a catena of cases, we ruled that the construction given to a statute by an administrative agency charged with the interpretation and application of a statute is entitled to great respect and should be accorded great weight by the courts. The exception, which does not obtain in the present case, is when such construction is clearly shown to be in sharp conflict with the governing statute or the Constitution and other laws. The rationale for this rule relates not only to the emergence of the multifarious needs of a modern or modernizing society and the establishment of diverse administrative agencies for addressing and satisfying those needs, it also relates to accumulation of experience and growth of specialized capabilities by the administrative agency charged with implementing a particular statute.

The charges and fees provided for in E.O. No. 1088 are therefore to be imposed for every pilotage maneuver performed by the harbor pilots, as properly interpreted by the PPA, the agency charged with its implementation.

x x x x

Finally, on the third issue, we rule that E.O. No. 1088 does not deprive the PPA of its power and authority to promulgate new rules and rates for payment of fees, including additional charges. As we held in Philippine Interisland Shipping Association of the Philippines v. Court of Appeals:

"The power of the PPA to fix pilotage rates and its authority to regulate pilotage still remain notwithstanding the fact that a schedule for pilotage fees has already been prescribed by the questioned executive order (referring to E.O. No. 1088). PPA is at liberty to fix new rates of pilotage subject only to the limitation that such new rates should not go below the rates fixed under E.O. No. 1088. x x x."

Our pronouncement is clearly in consonance with the provisions of Presidential Decree 857 which vests upon the PPA the power and authority (1) "to supervise, control, regulate x x x such services as are necessary in the ports vested in, or belonging to the Authority"; (2) "to control, regulate and supervise pilotage and the conduct of pilots in any Port District"; and (3) "to impose, fix, prescribe, increase or decrease such rates, charges or fees x x x for the services rendered by it or by any private organization within a Port District."13 (Emphasis supplied)

The decision became final and executory on February 14, 2003.

On April 8, 2003, respondent UHPAP filed a motion for the issuance of a writ of execution with the RTC.14 Petitioners opposed15 the motion.

On September 25, 2003, the RTC issued an Order16 denying respondent UHPAP's motion and declaring that "pursuant to the decision of the Supreme Court in G.R. No. 133763, PPA Resolution Nos. 1486, 1541, and 1554 are valid and effective thereby disallowing the collection of overtime pay."17 The RTC explained:

x x x [W]hen the Supreme Court ruled and declared that Executive Order 1088 does not deprive the PPA of its power and authority to promulgate rules and rates for payment of fees including additional charges, it had effectively ruled on the validity of PPA resolutions 1486, 1541, and 1554. Said resolutions did not violate any provision of Executive Order 1088 and did not constitute any diminution of the rates provided by said Executive Order. They merely repealed the collection of overtime premiums or charges which is provided not by Executive Order 1088 but by another PPA Administrative Order 03-85. This is not inconsistent with the ruling of the Supreme Court that Executive Order 1088 did not repeal the additional pay for holiday work and premium pay for nighttime service, collectively referred to as overtime pay provided in Customs Administrative Order No. 15-65 and PPA Administrative Order 03-85. The Supreme Court did not consider subsequent PPA resolutions or administrative orders affecting overtime pay because this was not brought out as an issue.

Resolutions 1486, 1541, and 1554 have no effect on Executive Order 1088 whatsoever.18 (Emphasis supplied)

Respondent UHPAP then filed a petition for certiorari19 under Rule 65 with the CA, docketed as CA-G.R. SP No. 87892. It contended that the RTC committed grave abuse of discretion amounting to lack of jurisdiction when it practically overturned the final and executory decision of this Court in G.R. No. 133763 by declaring in its September 25, 2003 Order that PPA Resolution Nos. 1486, 1541, and 1554 were valid and effective.20

CA Disposition

In a Decision dated October 19, 2005, the CA partly granted respondent's petition in that it affirmed the denial of the motion for the issuance of a writ of execution while, at the same time, deleting portions of the challenged Order. The decretal portion of the CA Decision states:

IN VIEW OF ALL THE FOREGOING, the herein petition is hereby PARTLY GRANTED, in such a way that the denial of UHPAP's motion for the issuance of a writ of execution is AFFIRMED, while the declaration in the assailed Order of September 25, 2003 stating that "pursuant to the decision of the Supreme Court in G.R. No. 133763, PPA resolutions 1486, 1541, and 1554 are valid and effective thereby disallowing the collection of overtime pay," is RECALLED and SET ASIDE and ordered DELETED from the said Order. No pronouncement as to cost.

SO ORDERED.21 (Emphasis supplied)

The CA set aside the declaration in the RTC Order dated September 25, 2003 that "pursuant to the decision of the Supreme Court in G.R. No. 133763, PPA Resolution Nos. 1486, 1541, and 1554 are valid and effective thereby disallowing the collection of overtime pay." According to the CA, the RTC committed grave abuse of discretion as "it really not only modified but reversed a final and executory decision of the highest court of the land."22 The appellate court ruled that when this Court, in G.R. No. 133763, declared ineffective the "pretended" repealing effect of EO No. 1088 on PPA AO No. 03-85, the subject PPA Resolutions implementing Section 3 of EO No. 1088 were automatically rendered without any legal effect as well.23 It also ruled that since there was no inconsistency between EO No. 1088 and the provisions of PPA AO No. 03-85, the latter was rendered in full legal force and effect.24

On November 10, 2005, petitioners filed a motion for partial reconsideration.25 It contended that in resolving the issue of whether EO No. 1088 repealed the provisions of CAO No. 15-65 and PPA AO No. 03-85 on nighttime and














overtime pay, this Court, in G.R. No. 133763, did not discuss the logical consequence of the resolution of the issue on PPA Resolution Nos. 1486, 1541, and 1554.26 It further asserted that PPA Resolution Nos. 1486, 1541, and 1554 remain valid as they were issued pursuant to PPA's authority to regulate pilotage services.27

In a Resolution dated March 23, 2006, the CA denied petitioners' motion for partial reconsideration. Hence, the present recourse.

Issue

Petitioners, via Rule 45, submit the lone assignment that THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR IN INTERPRETING AND CONCLUDING THAT THE RULING OF THE SUPREME COURT IN THE CASE OF "THE UNITED HARBOR PILOTS' ASSOCIATION OF THE PHILIPPINES, INC. V. ASSOCIATION OF THE INTERNATIONAL SHIPPING LINES, INC., ET AL., G.R. 133763," RENDERED "WITHOUT LEGAL EFFECT" THE PPA RESOLUTION NOS. 1486, 1541, AND 1554 WHICH REPEALED OVERTIME AND NIGHTTIME PAY.28

Our Ruling

The petition lacks merit.

This Court's ruling in G.R. No. 133763 that "EO No. 1088 did not repeal the provisions of PPA AO No. 03-85 on nighttime and overtime pay," necessarily rendered PPA Resolution Nos. 1486, 1541 and 1554 without any legal effect. Petitioners posit that notwithstanding the declaration by this Court in G.R. No. 133763 that EO No. 1088 did not repeal the overtime and nighttime pay provided under PPA AO 03-85, PPA Resolution Nos. 1486, 1541, and 1554 were not rendered "without legal effect." They insist that in resolving in G.R. No. 133763 the issue of whether EO No. 1088 repealed the provisions of PPA AO No. 03-85 on nighttime and overtime pay, this Court did not discuss the logical consequence of the resolution of the issue on the subject PPA Resolutions.29

We are not persuaded.

At the outset, it should be stressed that the PPA issued the subject resolutions - which disallowed overtime pay and recalled PPA's recommendation for nighttime pay to harbor pilots - pursuant to Section 3 of EO No. 1088 stating that "all orders, letters of instruction, rules, regulations and issuances inconsistent with it are repealed or amended accordingly." The PPA, just like petitioners,30 was of the belief that there was an actual inconsistency or an irreconcilable conflict between EO No. 1088 and the provisions of PPA AO No. 03-85 on nighttime and overtime pay, resulting in the implied repeal of the latter.31

But, as this Court pronounced in G.R. No. 133763, there is nothing in EO No. 1088 that reveals any intention on the part of Former President Marcos to amend or supersede the provisions of PPA AO No. 03-85 on nighttime and overtime pay. While Section 3 of EO No. 1088 provides a general repealing clause, the same is made dependent upon its actual inconsistency with other previous orders, rules, regulations or other issuance.

There is no inconsistency between EO No. 1088 and the provisions of PPA AO No. 03-85. These two orders dwell on entirely different subject matters. EO No. 1088 provides for uniform and modified rates for pilotage services rendered to foreign and coastwise vessels in all Philippine ports, public or private. On the other hand, the subject matter of the provisions of PPA AO No. 03-85 is the payment of the additional charges of nighttime and overtime pay. Plainly, EO No. 1088 involves the basic compensation for pilotage service while PPA AO No. 03-85 provides for the additional charges where pilotage service is rendered under certain circumstances.

Obviously, this Court's ruling in G.R. No. 133763 was that EO No. 1088 did not repeal the provisions of PPA AO No. 03-85 on nighttime and overtime pay as there was no inconsistency between the two orders. The ruling rendered "without legal effect" PPA Resolution Nos. 1486, 1541, and 1554, which were all issued by PPA pursuant to Section 3 of EO No. 1088. Upon the other hand, the validity of the earlier PPA AO No. 03-85, which allowed nighttime and overtime pay to harbor pilots, was affirmed.

It is noteworthy that when this Court, in G.R. No. 133763, reversed the RTC Decision dated January 26, 1998 (which declared, among others, that in view of the repealing clause in EO No. 1088 respondent UHPAP is not authorized to collect any overtime or night shift differential for pilotage services rendered), the Court likewise recognized the right of the members of respondent UHPAP to overtime and nighttime pay under PPA AO No. 03-85. Indeed, a harbor pilot who has rendered nighttime and overtime work must be paid nighttime and overtime pay.

Members of respondent UHPAP are entitled to nighttime and overtime pay. Undoubtedly, pursuant to PPA AO No. 03-85, members of respondent UHPAP are legally entitled to nighttime and overtime pay.







It bears pointing out that additional compensation for nighttime work is founded on public policy.32 Working at night is violative of the law of nature for it is the period for rest and sleep. An employee who works at night has less stamina and vigor. Thus, he can easily contract disease. The lack of sunlight tends to produce anemia and tuberculosis and predispose him to other ills. Night work brings increased liability to eyestrain and accident. Serious moral dangers also are likely to result from the necessity of traveling the street alone at night, and from the interference with normal home life.33 Hygienic, medical, moral, cultural and socio-biological reasons are in accord that night work has many inconveniences and when there is no alternative but to perform it, it is but just that the laborer should earn greater salary than ordinary work so as to compensate the laborer to some extent for the said inconveniences.34

Anent the payment of overtime pay, the Court explained its rationale in Philippine National Bank v. Philippine National Bank Employees Association (PEMA):35

x x x Why is a laborer or employee who works beyond the regular hours of work entitled to extra compensation called in this enlightened time, overtime pay? Verily, there can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or voluntarily agreed hours of labor he is supposed to do. When he thus spends additional time to his work, the effect upon him is multi-faceted: he puts in more effort, physical and/or mental; he is delayed in going home to his family to enjoy the comforts thereof; he might have no time for relaxation, amusement or sports; he might miss important pre-arranged engagements; etc., etc. It is thus the additional work, labor or service employed and the adverse effects just mentioned of his longer stay in his place of work that justify and is the real reason for the extra compensation that he called overtime pay.

Overtime work is actually the lengthening of hours developed to the interests of the employer and the requirements of his enterprise. It follows that the wage or salary to be received must likewise be increased, and more than that, a special additional amount must be added to serve either as encouragement or inducement or to make up for the things he loses which we have already referred to. And on this score, it must always be borne in mind that wage is indisputably intended as payment for work done or services rendered.36

Moreover, We agree with the CA that the RTC correctly denied respondent's motion for execution. It will be recalled that the original action before the RTC was one for declaratory relief filed by petitioners praying for:

(1) a construction of Executive Order No. 1088 declaring that AISLI is not liable to pay overtime and night shift differential to respondent UHPAP; and

(2) a construction of Executive Order No. 1088 declaring that the schedule of rates provided therein applies to the entire package of pilotage services under the compulsory pilotage scheme and that UHPAP cannot separately charge AISLI for each pilotage service rendered.37

The disposition of the RTC in favor of petitioners in the declaratory relief petition was the decision elevated by the UHPAP to this Court.38 Upon the reversal of the RTC decision by this Court, UHPAP went back to the RTC on a motion for execution. Verily, that course of action on the part of UHPAP was procedurally infirm.

In such civil actions for declaratory relief under Rule 63 of the Rules of Court, the judgment does not entail an executory process, as the primary objective of petitioner is to determine any question of construction or validity and for a declaration of concomitant rights and duties.39 The proper remedy would have been for members of respondent UHPAP to claim for overnight and nighttime pay before petitioners AISLI and its members.

WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED. Costs against petitioners.

SO ORDERED.

LAZARO V. DACUT, CESARIO G. CAJOTE, ROMERLO F. TUNGALA, LOWEL Z. ZUBISTA, and ORLANDO P. TABOY, Petitioners, vs.COURT OF APPEALS (Special Twelfth Division), STA. CLARA INTERNATIONAL TRANSPORT AND EQUIPMENT CORPORATION, and NICANDRO LINAO, Respondents.

D E C I S I O N

QUISUMBING, J.:









Assailed in this petition for review are the Decision1 dated June 21, 2005 and the Resolution2 dated August 22, 2005 of the Court of Appeals in CA-G.R. SP No. 76096, which affirmed the Resolution3 dated May 20, 2002 of the National Labor Relations Commission (NLRC). The NLRC had affirmed the decision4 of the Labor Arbiter in NLRC Case No. NCR-00-09-09578-99, dismissing petitioners’ complaint for constructive dismissal but ordering the payment of their holiday pay, accrued sick and vacation leaves and wage differential.

The antecedent facts culled from the submissions below are as follows:

Petitioners Lazaro V. Dacut, Cesario G. Cajote, Romerlo F. Tungala, Lowel Z. Zubista, and Orlando P. Taboy were crew members of the LCT "BASILISA", an inter-island cargo vessel owned by private respondent Sta. Clara International Transport and Equipment Corporation.

On November 29, 1998, Dacut discovered a hole in the vessel’s engine room. The company had the hole patched up with a piece of iron and cement. Despite the repair, Dacut and Tungala resigned in July 1999 due to the vessel’s alleged unseaworthiness.5

On the other hand, Cajote went on leave from April 12-28, 1999 to undergo eye treatment. Since then, he has incurred several unauthorized absences. Fearing that he will be charged as Absent Without Leave (AWOL), Cajote resigned in June 1999.6

On September 22, 1999, petitioners filed a complaint7 for constructive dismissal amounting to illegal dismissal (except for Zubista and Taboy); underpayment of wages, special and regular holidays; non-payment of rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed overtime pay; actual, moral and exemplary damages; and litigation costs and attorney’s fees.

Dacut and Tungala claimed that they resigned after Reynalyn G. Orlina, the secretary of the Personnel Manager, told them that they will be paid their separation pay if they voluntarily resigned. They also resigned because the vessel has become unseaworthy after the company refused to have it repaired properly.8 Meanwhile, Cajote alleged that he resigned because the company hired a replacement while he was still on leave. When he returned, the Operations Manager told him that he will be paid his separation pay if he voluntarily resigned; otherwise, he would be charged for being AWOL. On the other hand, Zubista claimed that his wage was below the minimum set by the Regional Tripartite Wages and Productivity Board. Finally, petitioners alleged that they were not paid their rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed overtime pay.

After the Labor Arbiter declared the case submitted for decision, the company filed its reply to petitioners’ position paper. It countered that Dacut and Tungala voluntarily resigned due to the vessel’s alleged unseaworthiness while Cajote resigned to avoid being charged as AWOL. It also claimed that petitioners’ monetary claims had no basis.

On August 2, 2000, the Labor Arbiter dismissed petitioners’ complaint. The Labor Arbiter ruled that there was sufficient evidence to prove that the vessel was seaworthy. Thus, the fear of Dacut and Tungala was unfounded, and they must bear the consequence of their resignation. The Labor Arbiter also observed that Cajote has incurred excessive unauthorized absences which would warrant his dismissal under the Labor Code. Thus, the Labor Arbiter upheld the company’s position that Cajote resigned to avoid being charged as AWOL. Finally, the Labor Arbiter noted that except for the holiday pay, accrued sick and vacation leaves, and wage differential, petitioners failed to substantiate their monetary claims. The Labor Arbiter thus held:

WHEREFORE, the foregoing premises considered, judgment is hereby rendered dismissing complainants’ charge for constructive dismissal and the concomitant prayer that goes therewith for lack of merit. However, respondent is ordered to pay the following:

1. [Complainants’] holiday pay and the cash equivalent of their accrued sick leave/vacation leave credits to:

Holiday Pay Accrued

Regular Special S/L - V/L Credits

Dacut P1,000.00 P1,099.98 P8,365.35

http://www.lawphil.net/judjuris/juri2008/mar2008/gr_169434_2008.html#fnt8








Tungala P 933.32 P 756.66 P7,850.00

Cajote P1,292.30 P 682.95 P2,100.00

Zubista P 923.04 P 714.98 P2,600.00

Taboy P1,307.68 P1,076.91 P5,000.00

[Total] P5,456.34 P4,331.48 P25,915.35

2. Zubista’s wage differential amounting to THIRTY-FOUR THOUSAND SIX HUNDRED EIGHTY-SEVEN PESOS and 70/100 (P34,687.70)[.]

SO ORDERED.9

Petitioners appealed to the NLRC alleging that the Labor Arbiter erred: (1) in entertaining the company’s reply after the case had been submitted for decision; (2) in not finding that Dacut, Cajote and Tungala were constructively dismissed; (3) in not finding that petitioners were entitled to their monetary claims; and (4) in not finding that petitioners were entitled to actual, moral and exemplary damages as well as litigation costs and attorney’s fees. At this point, Dacut and Tungala further contended that they resigned because they were being harassed by the company due to a complaint for violation of labor standards they had filed earlier against it.

On May 20, 2002, the NLRC affirmed the Labor Arbiter’s decision. 10 The NLRC clarified that although the Labor Arbiter has declared the case submitted for decision, the Labor Arbiter may still entertain the company’s reply in order to ascertain the facts of the case. The NLRC also declared that Dacut, Cajote and Tungala voluntarily executed their resignation letters.1avvphi1

Petitioners elevated the case to the Court of Appeals which likewise affirmed the findings of the NLRC. Petitioners now come before us alleging that the appellate court committed serious errors of law:

I.

… in holding that there was nothing irregular in admitting respondents’ belatedly submitted reply and making the same the primary basis of the decision despite the fact that petitioners had not been given the chance to refute its contents.

II.

… IN HOLDING THAT PETITIONERS LAZARO DACUT, [ET] AL. VOLUNTARILY RESIGNED FROM THEIR EMPLOYMENT AND WERE NOT CONSTRUCTIVELY DISMISSED.

III.

… IN RULING THAT PETITIONERS [WERE] NOT ENTITLED TO THEIR OTHER MONETARY CLAIMS.11

Essentially, we are asked to resolve: (1) whether the Labor Arbiter erred in admitting the company’s reply after the case had been submitted for decision; (2) whether Dacut, Tungala and Cajote voluntarily resigned from their employment; and (3) whether petitioners were entitled to their monetary claims.1avvphi1

The first issue deals with technical rules and procedural matters. Well-settled is the rule that technical rules of procedure are not binding in labor cases.12 In fact, it is the spirit and intention of the Labor Code that labor officials shall use all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure.13






In our view, the fact that the Labor Arbiter admitted the company’s reply after the case had been submitted for decision did not make the proceedings before him irregular. Petitioners were given adequate opportunity in the NLRC and the Court of Appeals to rebut the company’s evidence against them.

The second and third issues require a review of factual matters. Under Rule 45 of the Rules of Court, a petition for review on certiorari shall only raise questions of law considering that the findings of fact of the Court of Appeals are, as a general rule, conclusive upon and binding on this Court. This doctrine applies with greater force in labor cases where the factual findings of the labor tribunals are affirmed by the Court of Appeals. The reason is that labor officials are deemed to have acquired expertise in matters within their jurisdiction and therefore, their factual findings are generally accorded not only respect but also finality. 14

Here, the Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in finding that the primary reason why Dacut and Tungala resigned was the vessel’s alleged unseaworthiness as borne by their pleadings before the Labor Arbiter. Dacut and Tungala never mentioned that they resigned because they were being harassed by the company due to a complaint for violation of labor standards they had filed against it. This ground was alleged only before the NLRC and not a single act or incident was cited to prove this point. Even the alleged assurance by Orlina, that they would be given separation pay, served merely as a secondary reason why they resigned. In fact, we doubt that such assurance was even made considering that as secretary of the Personnel Manager, it was not shown under what authority Orlina acted when she told Dacut and Tungala to resign.

Likewise deserving scant consideration is Cajote’s claim that the Operations Manager told him that he will be paid separation pay if he resigned voluntarily; otherwise, he would be charged as AWOL. Although the company already hired a replacement, Cajote admitted that he was still employed at the time he resigned. In fact, the company tried to give him another assignment but he refused it. Thus, the only reason why Cajote resigned was his long unauthorized absences which would have warranted his dismissal in any case.

We find no reason to disturb all these factual findings because they are amply supported by substantial evidence.

Apropos the monetary claims, there is insufficient evidence to prove petitioners’ entitlement thereto. As crew members, petitioners were required to stay on board the vessel 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 give them overtime pay or night shift differential, even when they are not actually working. Thus, the correct criterion in determining whether they are entitled to overtime pay or night shift differential is not 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.15 In this case, petitioners failed to submit sufficient proof that overtime and night shift work were actually performed to entitle them to the corresponding pay.

WHEREFORE, the instant petition is DENIED. The Decision dated June 21, 2005 and the Resolution dated August 22, 2005 of the Court of Appeals in CA-G.R. SP No. 76096 are AFFIRMED.

SO ORDERED.

ASIAN TRANSMISSION CORPORATION, petitioner, vs.The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M. BACUNGAN as Voluntary Arbitrator, KISHIN A. LALWANI, Union, Union representative to the Panel Arbitrators; BISIG NG ASIAN TRANSMISSION LABOR UNION (BATLU); HON. BIENVENIDO T. LAGUESMA in his capacity as Secretary of Labor and Employment; and DIRECTOR CHITA G. CILINDRO in her capacity as Director of Bureau of Working Conditions, respondents.

D E C I S I O N

CARPIO-MORALES, J.:

Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules of Civil Procedure the nullification of the March 28, 2000 Decision1 of the Court of Appeals denying its petition to annul 1) the March 11, 1993 "Explanatory Bulletin"2 of the Department of Labor and Employment (DOLE) entitled "Workers’ Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31, 1998 Decision3 of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998, and 3) the September 18, 19984 Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration.



The following facts, as found by the Court of Appeals, are undisputed:

The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The bulletin reads:

"On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng Kagitingan.

Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan x x x x

Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.

In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x x x On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday." (Emphasis and underscoring supplied)

Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:

ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election,

which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now:

1. New Year’s Day January 1

2. Maundy Thursday Movable Date

3. Good Friday Movable Date

4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)

5. Labor Day May 1

6. Independence Day June 12

7. National Heroes Day Last Sunday of August

8. Bonifacio Day November 30

9. Christmas Day December 25

10. Rizal Day December 30

In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday."

In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated."5

The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor."

By the present petition, petitioners raise the following issues:

I

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE PARTIES AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES THEMSELVES

II

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN WAS LAID TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY BULLETIN

III

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT [Department of Labor and Employment] DOLE MAY PROMULGATE

IV

WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY ISSUING EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW

V

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE RULINGS OF THE SUPREME COURT TO THE CONTRARY

VI

WHETHER OR NOT RESPONDENTS’ ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUE PROCESS BY THE "EXPLANATORY BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS

The petition is devoid of merit.

At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition for certiorari under Rule 65.

[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction.

The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration.

x x x

For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedy and adequate remedy.6

The records of the case show that following petitioner’s receipt on August 18, 2000 of a copy of the August 10, 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration, it filed the present petition for certiorari on September 15, 2000, at which time the Court of Appeals decision had become final and executory, the 15-day period to appeal it under Rule 45 having expired.

Technicality aside, this Court finds no ground to disturb the assailed decision.

Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.7 Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay."8 It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance.

Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.

As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays.9 The provision is mandatory,10 regardless of whether an employee is paid on a monthly or daily basis.11 Unlike a bonus, which is a management prerogative,12 holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.

It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says.13 In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.

Petitioner’s assertion that Wellington v. Trajano14 has "overruled" the DOLE March 11, 1993 Explanatory Bulletin does not lie. In Wellington, the issue was whether monthly-paid employees are entitled to an additional day’s pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative, observed that in fixing the monthly salary of its employees, Wellington took into account "every working day of the year including the holidays specified by law and excluding only Sunday." In the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same day.15

In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the working man’s welfare should be the primordial and paramount consideration.16

Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or employer practice or policy."17

From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to pay for the legal holidays as required by law. Thus, the 1997-1998 CBA incorporates the following provision:

ARTICLE XIVPAID LEGAL HOLIDAYS

The following legal holidays shall be paid by the COMPANY as required by law:

1. New Year’s Day (January 1st)

2. Holy Thursday (moveable)

3. Good Friday (moveable)

4. Araw ng Kagitingan (April 9th)

5. Labor Day (May 1st)

6. Independence Day (June 12th)

7. Bonifacio Day [November 30]

8. Christmas Day (December 25th)

9. Rizal Day (December 30th)

10. General Election designated by law, if declared public non-working holiday

11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay.

A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave.

Under similar circumstances, the COMPANY will give a day’s wage for November 1st and December 31st whenever declared a holiday. When required to work on said days, the employee will be paid according to Art. VI, Sec. 3B hereof.18

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

JOSE RIZAL COLLEGE, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS, respondents.

PARAS, J.:

This is a petition for certiorari with prayer for the issuance of a writ of preliminary injunction, seeking the annulment of the decision of the National Labor Relations Commission * in NLRC Case No. RB-IV 23037-78 (Case No. R4-1-1081-71) entitled "National Alliance of Teachers and Office Workers and Juan E. Estacio, Jaime Medina, et al. vs. Jose Rizal College" modifying the decision of the Labor Arbiter as follows:

WHEREFORE, in view of the foregoing considerations, the decision appealed from is MODIFIED, in the sense that teaching personnel paid by the hour are hereby declared to be entitled to holiday pay.

SO ORDERED.

The factual background of this case which is undisputed is as follows:

Petitioner is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on actual days worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on the basis of student contract hour. Before the start of the semester they sign contracts with the college undertaking to meet their classes as per schedule.

Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977, private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against the college for said alleged non-payment of holiday pay, docketed as Case No. R04-10-81-72. Due to the failure of the parties to settle their differences on conciliation, the case was certified for compulsory arbitration where it was docketed as RB-IV-23037-78 (Rollo, pp. 155-156).

After the parties had submitted their respective position papers, the Labor Arbiter ** rendered a decision on February 5, 1979, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered as follows:

1. The faculty and personnel of the respondent Jose Rizal College who are paid their salary by the month uniformly in a school year, irrespective of the number of working days in a month, without deduction for holidays, are presumed to be already paid the 10 paid legal holidays and are no longer entitled to separate payment for the said regular holidays;

2. The personnel of the respondent Jose Rizal College who are paid their wages daily are entitled to be paid the 10 unworked regular holidays according to the pertinent provisions of the Rules and Regulations Implementing the Labor Code;

3. Collegiate faculty of the respondent Jose Rizal College who by contract are paid compensation per student contract hour are not entitled to unworked regular holiday pay considering that these regular holidays have been excluded in the programming of the student contact hours. (Rollo. pp. 26-27)

On appeal, respondent National Labor Relations Commission in a decision promulgated on June 2, 1982, modified the decision appealed from, in the sense that teaching personnel paid by the hour are declared to be entitled to holiday pay (Rollo. p. 33).

Hence, this petition.

The sole issue in this case is whether or not the school faculty who according to their contracts are paid per lecture hour are entitled to unworked holiday pay.

Labor Arbiter Julio Andres, Jr. found that faculty and personnel employed by petitioner who are paid their salaries monthly, are uniformly paid throughout the school year regardless of working days, hence their holiday pay are

included therein while the daily paid employees are renumerated for work performed during holidays per affidavit of petitioner's treasurer (Rollo, pp. 72-73).

There appears to be no problem therefore as to the first two classes or categories of petitioner's workers.

The problem, however, lies with its faculty members, who are paid on an hourly basis, for while the Labor Arbiter sustains the view that said instructors and professors are not entitled to holiday pay, his decision was modified by the National Labor Relations Commission holding the contrary. Otherwise stated, on appeal the NLRC ruled that teaching personnel paid by the hour are declared to be entitled to holiday pay.

Petitioner maintains the position among others, that it is not covered by Book V of the Labor Code on Labor Relations considering that it is a non- profit institution and that its hourly paid faculty members are paid on a "contract" basis because they are required to hold classes for a particular number of hours. In the programming of these student contract hours, legal holidays are excluded and labelled in the schedule as "no class day. " On the other hand, if a regular week day is declared a holiday, the school calendar is extended to compensate for that day. Thus petitioner argues that the advent of any of the legal holidays within the semester will not affect the faculty's salary because this day is not included in their schedule while the calendar is extended to compensate for special holidays. Thus the programmed number of lecture hours is not diminished (Rollo, pp. 157- 158).

The Solicitor General on the other hand, argues that under Article 94 of the Labor Code (P.D. No. 442 as amended), holiday pay applies to all employees except those in retail and service establishments. To deprive therefore employees paid at an hourly rate of unworked holiday pay is contrary to the policy considerations underlying such presidential enactment, and its precursor, the Blue Sunday Law (Republic Act No. 946) apart from the constitutional mandate to grant greater rights to labor (Constitution, Article II, Section 9). (Reno, pp. 76-77).

In addition, respondent National Labor Relations Commission in its decision promulgated on June 2, 1982, ruled that the purpose of a holiday pay is obvious; that is to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn. That is his holiday pay. It is no excuse therefore that the school calendar is extended whenever holidays occur, because such happens only in cases of special holidays (Rollo, p. 32).

Subject holiday pay is provided for in the Labor Code (Presidential Decree No. 442, as amended), which reads:

Art. 94. Right to holiday pay — (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; ... "

and in the Implementing Rules and Regulations, Rule IV, Book III, which reads:

SEC. 8. Holiday pay of certain employees. — (a) Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacations. ...

Under the foregoing provisions, apparently, the petitioner, although a non-profit institution is under obligation to give pay even on unworked regular holidays to hourly paid faculty members subject to the terms and conditions provided for therein.

We believe that the aforementioned implementing rule is not justified by the provisions of the law which after all is silent with respect to faculty members paid by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a fortuitous event or a national need calls for the declaration of special holidays). Regular holidays specified as such by law are known to both school and faculty members as no class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts.

On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to payment on Special Public Holidays.

It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the employees on account of work interruptions is defeated when a regular class day is

cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered.

Petitioner alleges that it was deprived of due process as it was not notified of the appeal made to the NLRC against the decision of the labor arbiter.

The Court has already set forth what is now known as the "cardinal primary" requirements of due process in administrative proceedings, to wit: "(1) the right to a hearing which includes the right to present one's case and submit evidence in support thereof; (2) the tribunal must consider the evidence presented; (3) the decision must have something to support itself; (4) the evidence must be substantial, and substantial evidence means such evidence as a reasonable mind might accept as adequate to support a conclusion; (5) the decision must be based on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected; (6) the tribunal or body of any of its judges must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate; (7) the board or body should in all controversial questions, render its decisions in such manner that the parties to the proceeding can know the various issues involved, and the reason for the decision rendered. " (Doruelo vs. Commission on Elections, 133 SCRA 382 [1984]).

The records show petitioner JRC was amply heard and represented in the instant proceedings. It submitted its position paper before the Labor Arbiter and the NLRC and even filed a motion for reconsideration of the decision of the latter, as well as an "Urgent Motion for Hearing En Banc" (Rollo, p. 175). Thus, petitioner's claim of lack of due process is unfounded.

PREMISES CONSIDERED, the decision of respondent National Labor Relations Commission is hereby set aside, and a new one is hereby RENDERED:

(a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether the same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations;

(b) but ordering petitioner to pay said faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly rates should they teach during said extensions.

SO ORDERED.

SAN MIGUEL CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE M. ESPAÑOL, JR., Hon. CRESENCIANO B. TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M. MACARAYA, respondents.

D E C I S I O N

KAPUNAN, J.:

Assailed in the petition before us are the decision, promulgated on 08 May 2000, and the resolution, promulgated on 18 October 2000, of the Court of Appeals in CA G.R. SP-53269.

The facts of the case are as follows:

On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the inspection, it was discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. DOLE sent a copy of the inspection result to SMC and it was received by and explained to its personnel officer Elena dela Puerta.i[1] SMC contested the findings and DOLE conducted summary hearings on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof that it was paying regular Muslim holiday pay to

i

its employees. Hence, Alan M. Macaraya, Director IV of DOLE Iligan District Office issued a compliance order, dated 17 December 1993, directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of the order.

SMC appealed to the DOLE main office in Manila but its appeal was dismissed for having been filed late. The dismissal of the appeal for late filing was later on reconsidered in the order of 17 July 1998 after it was found that the appeal was filed within the reglementary period. However, the appeal was still dismissed for lack of merit and the order of Director Macaraya was affirmed.

SMC went to this Court for relief via a petition for certiorari, which this Court referred to the Court of Appeals pursuant to St. Martin Funeral Homes vs. NLRC.ii[2]

The appellate court, in the now questioned decision, promulgated on 08 May 2000, ruled, as follows:

WHEREFORE, the Order dated December 17, 1993 of Director Macaraya and Order dated July 17, 1998 of Undersecretary Español, Jr. is hereby MODIFIED with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary. Let this case be remanded to the Regional Director for the proper computation of the said holiday pay.

SO ORDERED.iii[3]

Its motion for reconsideration having been denied for lack of merit, SMC filed a petition for certiorari before this Court, alleging that:

PUBLIC RESPONDENTS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY GRANTED MUSLIM HOLIDAY PAY TO NON-MUSLIM EMPLOYEES OF SMC-ILICOCO AND ORDERING SMC TO PAY THE SAME RETROACTIVE FOR ONE (1) YEAR FROM THE DATE OF THE PROMULGATION OF THE COMPLIANCE ORDER ISSUED ON DECEMBER 17, 1993, IT BEING CONTRARY TO THE PROVISIONS, INTENT AND PURPOSE OF P.D. 1083 AND PREVAILING JURISPRUDENCE.

THE ISSUANCE OF THE COMPLIANCE ORDER WAS TAINTED WITH GRAVE ABUSE OF DISCRETION IN THAT SAN MIGUEL CORPORATION WAS NOT ACCORDED DUE PROCESS OF LAW; HENCE, THE ASSAILED COMPLIANCE ORDER AND ALL SUBSEQUENT ORDERS, DECISION AND RESOLUTION OF PUBLIC RESPONDENTS WERE ALL ISSUED WITH GRAVE ABUSE OF DISCRETION AND ARE VOID AB INITIO.

THE HON. COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT DECLARED THAT REGIONAL DIRECTOR MACARAYA, UNDERSECRETARY TRAJANO AND UNDERSECRETARY ESPAÑOL, JR., WHO ALL LIKEWISE ACTED WITH GRAVE ABUSE OF DISCRETION AND WITHOUT OR IN EXCESS OF THEIR JURISDICTION, HAVE JURISDICTION IN ISSUING THE ASSAILED COMPLIANCE ORDER AND SUBSEQUENT ORDERS, WHEN IN FACT THEY HAVE NO JURISDICTION OR HAS LOST JURISDICTION OVER THE HEREIN LABOR STANDARD CASE. iv[4]

At the outset, petitioner came to this Court via a petition for certiorari under Rule 65 instead of an appeal under Rule 45 of the 1997 Rules of Civil Procedure. In National Irrigation Administration vs. Court of Appeals,v[5] the Court declared:

x x x (S)ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction.

The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil

ii

iii

iv

v

http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/129169.htm

http://sc.judiciary.gov.ph/jurisprudence/1998/sept%201998/130866.htm

Procedure. Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration.

x x x

For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedy and adequate remedy.vi[6]

Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost appeal.vii[7] For failure of petitioner to file a timely appeal, the questioned decision of the Court of Appeals had already become final and executory.

In any event, the Court finds no reason to reverse the decision of the Court of Appeals.

Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083,viii[8] otherwise known as the Code of Muslim Personal Laws, which states:

Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays:

(a) ‘Amun Jadīd (New Year), which falls on the first day of the first lunar month of Muharram;

(b) Maulid-un-Nabī (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal;

(c) Lailatul Isrā Wal Mi’rāj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab;

(d) ‘Īd-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; and

(e) ‘Īd-ūl-Adhā (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dhū’l-Hijja.

Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such other Muslim provinces and cities as may hereafter be created;

(2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other provinces and cities.

The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides:

Art. 94. Right to holiday pay. -

(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; x x x.

vi

vii

viii

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

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

At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that “x x x nothing herein shall be construed to operate to the prejudice of a non-Muslim.”

In addition, the 1999 Handbook on Workers’ Statutory Benefits, approved by then DOLE Secretary Bienvenido E. Laguesma on 14 December 1999 categorically stated:

Considering that all private corporations, offices, agencies, and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays.ix[9]

On the question regarding the jurisdiction of the Regional Director Allan M. Macaraya, Article 128, Section B of the Labor Code, as amended by Republic Act No. 7730, provides:

“Article 128. Visitorial and enforcement power. -

x x x

(b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.

x x x

In the case before us, Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. In addition, the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. Indeed, petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. Hence, the issue could be resolved even without documentary proofs. In any case, there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection.

Anent the allegation that petitioner was not accorded due process, we sustain the Court of Appeals in finding that SMC was furnished a copy of the inspection order and it was received by and explained to its Personnel Officer. Further, a series of summary hearings were conducted by DOLE on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Thus, SMC could not claim that it was not given an opportunity to defend itself.

Finally, as regards the allegation that the issue on Muslim holiday pay was already resolved in NLRC CA No. M-000915-92 (Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga),x[10] the Court notes that the case was primarily for illegal dismissal and the claim for benefits was only incidental to the main case. In that case, the NLRC Cagayan de Oro City declared, in passing:

ix

x

We also deny the claims for Muslim holiday pay for lack of factual and legal basis. Muslim holidays are legally observed within the area of jurisdiction of the present Autonomous Region for Muslim Mindanao (ARMM), particularly in the provinces of Maguindanao, Lanao del Sur, Sulu and Tawi-Tawi. It is only upon Presidential Proclamation that Muslim holidays may be officially observed outside the Autonomous Region and generally extends to Muslims to enable them the observe said holidays.xi[11]

The decision has no consequence to issues before us, and as aptly declared by Undersecretary Español, it “can never be a benchmark nor a guideline to the present case x x x.”xii[12]

WHEREFORE, in view of the foregoing, the petition is DISMISSED.

SO ORDERED.

xi

xiiWELLINGTON INVESTMENT AND MANUFACTURING CORPORATION, petitioner, vs.CRESENCIANO B. TRAJANO, Under-Secretary of Labor and Employment, ELMER ABADILLA, and 34 others, respondents.

NARVASA, C.J.:

The basic issue raised by petitioner in this case is, as its counsel puts it, "whether or not a monthly-paid employee, receiving a fixed monthly compensation, is entitled to an additional pay aside from his usual holiday pay, whenever a regular holiday falls on a Sunday."

The case arose from a routine inspection conducted by a Labor Enforcement Officer on August 6, 1991 of the Wellington Flour Mills, an establishment owned and operated by petitioner Wellington Investment and Manufacturing Corporation (hereafter, simply Wellington). The officer thereafter drew up a report, a copy of which was "explained to and received by" Wellington's personnel manager, in which he set forth his finding of "(n)on-payment of regular holidays falling on a Sunday for monthly-paid employees." 1

Wellington sought reconsideration of the Labor Inspector's report, by letter dated August 10, 1991. It argued that "the monthly salary of the company's monthly-salaried employees already includes holiday pay for all regular holidays . . . (and hence) there is no legal basis for the finding of alleged non-payment of regular holidays falling on a Sunday." 2 It expounded on this thesis in a position paper subsequently submitted to the Regional Director, asserting that it pays its monthly-paid employees a fixed monthly compensation "using the 314 factor which undeniably covers and already includes payment for all the working days in a month as well as all the 10 unworked regular holidays within a year." 3

Wellington's arguments failed to persuade the Regional Director who, in an Order issued on July 28, 1992, ruled that "when a regular holiday falls on a Sunday, an extra

or additional working day is created and the employer has the obligation to pay the employees for the extra day except the last Sunday of August since the payment for the said holiday is already included in the 314 factor," and accordingly directed Wellington to pay its employees compensation corresponding to four (4) extra working days. 4

Wellington timely filed a motion for reconsideration of this Order of August 10, 1992, pointing out that it was in effect being compelled to "shell out an additional pay for an alleged extra working day" despite its complete payment of all compensation lawfully due its workers, using the 314 factor. 5 Its motion was treated as an appeal and was acted on by respondent Undersecretary. By Order dated September 22, the latter affirmed the challenged order of the Regional Director, holding that "the divisor being used by the respondent (Wellington) does not reliably reflect the actual working days in a year, " and consequently commanded Wellington to pay its employees the "six additional working days resulting from regular holidays falling on Sundays in 1988, 1989 and 1990." 6 Again, Wellington moved for reconsideration, 7 and again was rebuffed. 8

Wellington then instituted the special civil action of certiorari at bar in an attempt to nullify the orders above mentioned. By Resolution dated July 4, 1994, this Court authorized the issuance of a temporary restraining order enjoining the respondents from enforcing the questioned orders. 9

Every worker should, according to the Labor Code, 10 "be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;" this, of course, even if the worker does no work on these holidays. The regular holidays include: "New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth of December, and the day designated by law for holding a general election (or national referendum or plebiscite). 11

Particularly as regards employees "who are uniformly paid by the month, "the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve." 12 This monthly salary shall serve as compensation "for all days in the month whether worked or not," and "irrespective of the number of working days therein." 13 In other words, whether the month is of thirty (30) or thirty-one (31) days' duration, or twenty-eight (28) or twenty-nine (29) (as in February), the employee is entitled to receive the entire monthly salary. So, too, in the event of the declaration of

any special holiday, or any fortuitous cause precluding work on any particular day or days (such as transportation strikes, riots, or typhoons or other natural calamities), the employee is entitled to the salary for the entire month and the employer has no right to deduct the proportionate amount corresponding to the days when no work was done. The monthly compensation is evidently intended precisely to avoid computations and adjustments resulting from the contingencies just mentioned which are routinely made in the case of workers paid on daily basis.

In Wellington's case, there seems to be no question that at the time of the inspection conducted by the Labor Enforcement Officer on August 6, 1991, it was and had been paying its employees "a salary of not less than the statutory or established minimum wage," and that the monthly salary thus paid was "not . . . less than the statutory minimum wage multiplied by 365 days divided by twelve," supra. There is, in other words, no issue that to this extent, Wellington complied with the minimum norm laid down by law.

Apparently the monthly salary was fixed by Wellington to provide for compensation for every working day of the year including the holidays specified by law — and excluding only Sundays. In fixing the salary, Wellington used what it calls the "314 factor;" that is to say, it simply deducted 51 Sundays from the 365 days normally comprising a year and used the difference, 314, as basis for determining the monthly salary. The monthly salary thus fixed actually covers payment for 314 days of the year, including regular and special holidays, as well as days when no work is done by reason of fortuitous cause, as above specified, or causes not attributable to the employees.

The Labor Officer who conducted the routine inspection of Wellington discovered that in certain years, two or three regular holidays had fallen on Sundays. He reasoned that this had precluded the enjoyment by the employees of a non-working day, and the employees had consequently had to work an additional day for that month. This ratiocination received the approval of his Regional Director who opined 14 that "when a regular holiday falls on a Sunday, an extra or additional working day is created and the employer has the obligation to pay its employees for the extra day except the last Sunday of August since the payment for the said holiday is already included in the 314 factor." 15

This ingenuous theory was adopted and further explained by respondent Labor Undersecretary, to whom the matter was appealed, as follows: 16

. . . By using said (314) factor, the respondent (Wellington) assumes that all the regular holidays fell on ordinary days and never on a Sunday. Thus, the respondent failed to consider the circumstance that whenever a regular holiday coincides with a Sunday, an additional working day is created and left unpaid. In other words, while the said divisor may be utilized as proof evidencing payment of 302 working days, 2 special days and the ten regular holidays in a calendar year, the same does not cover or include payment of additional working days created as a result of some regular holidays falling on Sundays.

He pointed out that in 1988 there was "an increase of three (3) working days resulting from regular holidays falling on Sundays;" hence Wellington "should pay for 317 days, instead of 314 days." By the same process of ratiocination, respondent Undersecretary theorized that there should be additional payment by Wellington to its monthly-paid employees for "an increment of three (3) working days" for 1989 and again, for 1990. What he is saying is that in those years, Wellington should have used the "317 factor," not the "314 factor."

The theory loses sight of the fact that the monthly salary in Wellington — which is based on the so-called "314 factor" — accounts for all 365 days of a year; i.e., Wellington's "314 factor" leaves no day unaccounted for; it is paying for all the days of a year with the exception only of 51 Sundays.

The respondents' theory would make each of the years in question (1988, 1989, 1990), a year of 368 days. Pursuant to this theory, no employer opting to pay his employees by the month would have any definite basis to determine the number of days in a year for which compensation should be given to his work force. He would have to ascertain the number of times legal holidays would fall on Sundays in all the years of the expected or extrapolated lifetime of his business. Alternatively, he would be compelled to make adjustments in his employees' monthly salaries every year, depending on the number of times that a legal holiday fell on a Sunday.

There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year, or, contrary to the legal provisions bearing on the point, otherwise to reckon a year at more than 365 days. As earlier mentioned, what the law requires of employers

opting to pay by the month is to assure that "the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve," 17 and to pay that salary "for all days in the month whether worked or not," and "irrespective of the number of working days therein." 18 That salary is due and payable regardless of the declaration of any special holiday in the entire country or a particular place therein, or any fortuitous cause precluding work on any particular day or days (such as transportation strikes, riots, or typhoons or other natural calamities), or cause not imputable to the worker. And as also earlier pointed out, the legal provisions governing monthly compensation are evidently intended precisely to avoid re-computations and alterations in salary on account of the contingencies just mentioned, which, by the way, are routinely made between employer and employees when the wages are paid on daily basis.

The public respondents argue that their challenged conclusions and dispositions may be justified by Section 2, Rule X, Book III of the Implementing Rules, giving the Regional Director power — 19

. . . to order and administer (in cases where employer-employee relations still exist), after due notice and hearing, compliance with the labor standards provisions of the Code and the other labor legislations based on the findings of their Regulations Officers or Industrial Safety Engineers (Labor Standard and Welfare Officers) and made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of his order, in line with the provisions of Article 128 in relation to Articles 289 and 290 of the Labor Code, as amended. . . .

The respondents beg the question. Their argument assumes that there are some "labor standards provisions of the Code and the other labor legislations" imposing on employers the obligation to give additional compensation to their monthly-paid employees in the event that a legal holiday should fall on a Sunday in a particular month — with which compliance may be commanded by the Regional Director — when the existence of said provisions is precisely the matter to be established.

In promulgating the orders complained of the public respondents have attempted to legislate, or interpret legal provisions in such a manner as to create obligations where none are intended. They have acted without authority, or at the very least, with grave abuse of their discretion. Their acts must be nullified and set aside.

WHEREFORE, the orders complained of, namely: that of the respondent Undersecretary dated September 22, 1993, and that of the Regional Director dated July 30, 1992, are NULLIFIED AND SET ASIDE, and the proceeding against petitioner DISMISSED.

SO ORDERED.

compiled cases in labor standards (full text)

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