Conditions of Labor)

[G.R. No. 186070, April 11, 2011]

CLIENTLOGIC PHILPPINES, INC. (NOW KNOWN AS SITEL), JOSEPH VELASQUEZ, IRENE ROA AND RODNEY SPIRES, PETITIONERS, VS. BENEDICT CASTRO, RESPONDENT.

DECISION

NACHURA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the September 1, 2008 Decision[1] and the January 7, 2009 Resolution[2] of the Court of Appeals (CA), affirming with modification the November 29, 2007 resolution[3] of the National Labor Relations Commission (NLRC), which held that respondent Benedict Castro was not illegally dismissed. The CA, however, awarded respondent’s money claims, viz.:

WHEREFORE, premises considered, the instant Petition is PARTLY GRANTED. The Resolutions dated 29 November 2007 and 23 January 2008 of the National Labor Relations Commission (Third Division) in NLRC CN. RAB-CAR-02-0091-07 LAC NO. 08-002207-07 are AFFIRMED with MODIFICATION in that the monetary awards of Executive Labor Arbiter Vito C. Bose in his Decision dated 29 June 2007, as computed in Annex “A†� thereof, ONLY for holiday premiums of Php 16,913.35; service incentive leave pay of Php 8,456.65; overtime pay of Php 578,753.10; and rest day pay of Php 26,384.80 which [petitioners] shall jointly and solidarily pay to petitioner, are hereby REINSTATED. No pronouncement as to costs.

SO ORDERED.[4]

The second assailed issuance of the CA denied petitioners’ motion for reconsideration.

The facts:

Respondent was employed by petitioner ClientLogic Philippines, Inc. (now known as shall hereafter be referred to as SITEL on February 14, 2005 as a call center agent for its Bell South Account. After six (6) months, he was promoted to the “Mentor†� position, and thereafter to the “Coach†� position. A “Coach†� is a team supervisor who is in charge of dealing with customer complaints which could not be resolved by call center agents. In June 2006, he was transferred to the Green Dot Account.

During respondent’s stint at the Dot Green Account, respondent noticed that some of the call center agents under his helm would often make excuses to leave their work stations. Their most common excuse was that they would visit the company’s medical clinic. To verify that they were not using the clinic as an alibi to cut their work hours, respondent sent an e-mail to the clinic’s personnel requesting for the details of the agents who sought medical consultation. His request was denied on the ground that medical records of employees are highly confidential and can only be disclosed in cases of health issues, and not to be used to build any disciplinary case against them.

On October 11, 2006, respondent received a notice requiring him to explain why he should not be penalized for: (1) violating Green Dot Company’s Policy and Procedure for Direct Deposit Bank Info Request when he accessed a customer’s online account and then gave the latter’s routing and reference numbers for direct deposit; and (2) gravely abusing his discretion when he requested for the medical records of his team members. Respondent did not deny the infractions imputed against him. He, however, justified his actuations by explaining that the customer begged him to access the account because she did not have a computer or an internet access and that he merely requested for a patient tracker, not medical records.

In November 2006, a poster showing SITEL’s organizational chart was posted on the company’s bulletin board, but respondent’s name and picture were conspicuously missing, and the name and photo of another employee appeared in the position which respondent was supposedly occupying.

On January 22, 2007, SITEL posted a notice of vacancy for respondent’s position, and on February 12, 2007, he received a Notice of Termination. These events prompted him to file a complaint for illegal dismissal; non-payment of overtime pay, rest day pay, holiday pay, service incentive leave pay; full backwages; damages; and attorney’s

fees before the Labor Arbiter (LA) against herein petitioners SITEL and its officers, Joseph Velasquez, Irene Roa, and Rodney Spires.[5]

In their position paper,[6] petitioners averred that respondent was dismissed on account of valid and justifiable causes. He acted with serious misconduct which breached the trust and confidence reposed in him by the company. He was duly furnished with the twin notices required by the Labor Code and further, he is not entitled to overtime pay, rest day pay, night shift differential, holiday pay, and service incentive leave pay because he was a supervisor, hence, a member of the managerial staff.

In a decision dated June 29, 2007,[7] the LA ruled in favor of respondent by declaring him illegally dismissed and ordering petitioners to pay his full backwages and, in lieu of reinstatement, his separation pay. The LA further awarded respondents money claims upon finding that he was not occupying a managerial position. The decretal portion of the decision reads:

WHEREFORE, all premises duly considered, [petitioners] are hereby found guilty of illegally dismissing [respondent]. As such, [petitioners] shall be jointly and solidarily liable to pay [respondent] his full backwages from the date of his dismissal to the finality of this decision, computed as of today at One Hundred Thirty Eight Thousand Seven Hundred Fifty Nine Pesos and 80/100 (P138,759.80) plus, Seven Hundred Sixty Three Thousand Two Hundred Forty Eight Pesos and 67/100 (P763,248.67) representing his separation pay at one month pay for every year of service, holiday pay and service incentive leave pay for the three years prior to the filing of this case, overtime pay for six(6) hours daily, rest day pay and ten percent (10%) as attorney’s fees.

All other claims are hereby dismissed for lack of evidence.

The computation of the foregoing monetary claims is hereto attached and made an integral part hereof as Annex “A.†�

SO ORDERED.[8]

Aggrieved, petitioners appealed to the NLRC which, in its November 29, 2007 resolution,[9] reversed and set aside the decision of the LA by dismissing the complaint for lack of merit on the ground that respondent’s employment was terminated for a just cause. The NLRC failed to discuss the money claims.

On September 1, 2008, the CA affirmed the NLRC’s finding that there was no illegal dismissal. Anent the money claims, the CA concurred with the LA’s ruling.[10]

Petitioners and respondent respectively moved for partial reconsideration, but their motions were denied in the CA Resolution dated January 7, 2009.[11] From the said denial, only petitioners resorted to this Court through the petition at bar. Respondent’s failure to partially appeal the CA’s Decision finding him not illegally dismissed has now rendered the same final and executory; hence, the instant petition shall traverse only the issue on money claims.

Petitioners argue in the main[12] that, as a team supervisor, respondent was a member of the managerial staff; hence, he is not entitled to overtime pay, rest day pay, holiday pay, and service incentive leave pay.

We deny the petition.

The petition hinges on the question of whether the duties and responsibilities performed by respondent qualify him as a member of petitioners’ managerial staff. This is clearly a question of fact, the determination of which entails an evaluation of the evidence on record.

The alleged errors of the CA lengthily enumerated in the petition[13] are essentially factual in nature and, therefore, outside the ambit of a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure. The Court does not try facts since such statutory duty is devolved upon the labor. It is not for this Court to weigh and calibrate pieces of evidence otherwise adequately passed upon by the labor tribunals especially when affirmed by the appellate court.[14]

Petitioners claim exception to the foregoing rule and assert that the factual findings of the LA and the NLRC were conflicting. This is not true. The labor tribunals’ decisions were at odds only with respect to the issue of illegal dismissal. Anent, the money claims issue, it cannot be said that their rulings were contradictory because the NLRC, disappointingly, did not make any finding thereon and it erroneously construed that the resolution of the money claims was intertwined with the determination of the legality of respondent’s dismissal. Nonetheless, the CA has already rectified such lapse when it made a definitive review of the LA’s factual findings on respondent’s money claims. Agreeing with the LA, the CA held:

Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. Generally, managerial employees are not entitled to overtime pay for services rendered in excess of eight hours a day.

Article 212(m) of the Labor Code defines a managerial employee as “one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions.†�

In his Position Paper, [respondent] states that he worked from 8:00 p.m. to 10:00 a.m. or 4 p.m. to 12:00 p.m. of the following day; he was also required to work during his restdays and during holidays but he was not paid; he was also not paid overtime pay, night shift differentials, and service incentive leave. He was employed as call center agent on 14 February 2005, then promoted as “Mentor†� in August 2005, and again promoted to “Coach†� position in September 2005, which was the position he had when he was terminated. A “coach†� is a team supervisor who is in charge of dealing with customer complaints which could not be dealt with by call center agents, and if a call center agent could not meet the needs of a customer, he passes the customer’s call to the “coach.†� Clearly, [respondent] is not a managerial employee as defined by law. Thus, he is entitled to [his] money claims.

As correctly found by Executive Labor Arbiter Bose: “Employees are considered occupying managerial positions if they meet all of the following conditions, namely:

“1) Their primary duty consists of management of the establishment in which they are employed or of a department or subdivision thereof;

“2) They customarily and regularly direct the work of two or more employees therein;

“3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight.

“They are considered as officers or members of a managerial staff if they perform the following duties and responsibilities:

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

“2) Customarily and regularly exercise discretion and independent judgment;

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

“[Respondent’s] duties do not fall under any of the categories enumerated above. His work is not directly related to management policies. Even the circumstances shown by the instant case reveal that [respondent] does not regularly exercise discretion and independent judgment. [Petitioners] submitted a list of the responsibilities of ‘HR Manager/Supervisor’ and ‘Division Manager/Department Manager/Supervisors’ but these do not pertain to [respondent] who does not have any of the said positions. He was just a team Supervisor and not [an] HR or Department Supervisor.†�[15]

We find no reversible error in the above ruling. The test of “supervisory†� or “managerial status†� depends on whether a person possesses authority to act in the interest of his employer and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment.[16] The position held by respondent and its concomitant duties failed to hurdle this test.

As a coach or team supervisor respondent’s main duty was to deal with customer complaints which could not be handled or solved by call center agents. If the members of his team could not meet the needs of a customer, they passed the customer’s call to respondent.

This job description does not indicate that respondent can exercise the powers and prerogatives to effectively recommend such managerial actions which require the customary use of independent judgment. There is no showing that he was actually conferred or actually exercising the following duties attributable to a “member of the managerial staff,†� viz.:

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

2) Customarily and regularly exercise discretion and independent judgment;

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

4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above.[17]

According to petitioners, respondent also performed the following duties, as shown in the company’s Statement of Policy of Discipline:

a. Know and understand in full the Policy on Discipline including their underlying reasons. b. Implement strictly and consistently the Policy on Discipline. c. Ensure that the said Policy on Discipline is communicated to and understood by all employees. d. Monitor compliance by employees with the said Policy. e. Advise HR Manager on the state of discipline in their respective departments; problems, if any, and

recommend solution(s) and corrective action(s).

As correctly observed by the CA and the LA, these duties clearly pertained to “Division Managers/Department Managers/ Supervisors,†� which respondent was not as he was merely a team supervisor. Petitioners themselves described respondent as “the superior of a call center agent; he heads and guides a specific number of agents, who form a team.†�[18]

From the foregoing, respondent is thus entitled to his claims for holiday pay, service incentive leave pay, overtime pay and rest day pay, pursuant to Book Three of the Labor Code, specifically Article 82,[19] in relation to Articles 87,[20] 93,[21] and 95[22] thereof.

WHEREFORE, premises considered, the Petition is hereby DENIED. The September 1, 2008 Decision and the January 7, 2009 Resolution of the Court of Appeals are AFFIRMED.

SO ORDERED.

G.R. No. 159577 May 3, 2006

CHARLITO PEÑARANDA, Petitioner, vs.BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, Respondents.

D E C I S I O N

PANGANIBAN, CJ:

Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. Since petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the January 27, 20032 and July 4, 20033 Resolutions of the Court of Appeals (CA) in CA-GR SP No. 74358. The earlier Resolution disposed as follows:

"WHEREFORE, premises considered, the instant petition is hereby DISMISSED."4

The latter Resolution denied reconsideration.

On the other hand, the Decision of the National Labor Relations Commission (NLRC) challenged in the CA disposed as follows:

"WHEREFORE, premises considered, the decision of the Labor Arbiter below awarding overtime pay and premium pay for rest day to complainant is hereby REVERSED and SET ASIDE, and the complaint in the above-entitled case dismissed for lack of merit.5

The Facts

Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance of its steam plant boiler.6 In May 2001, Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its general manager, Hudson Chua, before the NLRC.7

After the parties failed to settle amicably, the labor arbiter8 directed the parties to file their position papers and submit supporting documents.9 Their respective allegations are summarized by the labor arbiter as follows:

"[Peñaranda] through counsel in his position paper alleges that he was employed by respondent [Baganga] on March 15, 1999 with a monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was illegally terminated on December 19, 2000. Further, [he] alleges that his services [were] terminated without the benefit of due process and valid grounds in accordance with law. Furthermore, he was not paid his overtime pay, premium pay for working during holidays/rest days, night shift differentials and finally claims for payment of damages and attorney’s fees having been forced to litigate the present complaint.

"Upon the other hand, respondent [BPC] is a domestic corporation duly organized and existing under Philippine laws and is represented herein by its General Manager HUDSON CHUA, [the] individual respondent. Respondents thru counsel allege that complainant’s separation from service was done pursuant to Art. 283 of the Labor Code. The

respondent [BPC] was on temporary closure due to repair and general maintenance and it applied for clearance with the Department of Labor and Employment, Regional Office No. XI to shut down and to dismiss employees (par. 2 position paper). And due to the insistence of herein complainant he was paid his separation benefits (Annexes C and D, ibid). Consequently, when respondent [BPC] partially reopened in January 2001, [Peñaranda] failed to reapply. Hence, he was not terminated from employment much less illegally. He opted to severe employment when he insisted payment of his separation benefits. Furthermore, being a managerial employee he is not entitled to overtime pay and if ever he rendered services beyond the normal hours of work, [there] was no office order/or authorization for him to do so. Finally, respondents allege that the claim for damages has no legal and factual basis and that the instant complaint must necessarily fail for lack of merit."10

The labor arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint was premature because he was still employed by BPC.11 The temporary closure of BPC’s plant did not terminate his employment, hence, he need not reapply when the plant reopened.

According to the labor arbiter, petitioner’s money claims for illegal dismissal was also weakened by his quitclaim and admission during the clarificatory conference that he accepted separation benefits, sick and vacation leave conversions and thirteenth month pay.12

Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay for working on rest days, and attorney’s fees in the total amount of P21,257.98.13

Ruling of the NLRC

Respondents filed an appeal to the NLRC, which deleted the award of overtime pay and premium pay for working on rest days. According to the Commission, petitioner was not entitled to these awards because he was a managerial employee.14

Ruling of the Court of Appeals

In its Resolution dated January 27, 2003, the CA dismissed Peñaranda’s Petition for Certiorari. The appellate court held that he failed to: 1) attach copies of the pleadings submitted before the labor arbiter and NLRC; and 2) explain why the filing and service of the Petition was not done by personal service.15

In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground that petitioner still failed to submit the pleadings filed before the NLRC.16

Hence this Petition.17

The Issues

Petitioner states the issues in this wise:

"The [NLRC] committed grave abuse of discretion amounting to excess or lack of jurisdiction when it entertained the APPEAL of the respondent[s] despite the lapse of the mandatory period of TEN DAYS.1avvphil.net

"The [NLRC] committed grave abuse of discretion amounting to an excess or lack of jurisdiction when it rendered the assailed RESOLUTIONS dated May 8, 2002 and AUGUST 16, 2002 REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL FINDINGS of the [labor arbiter] with respect to the following:

"I. The finding of the [labor arbiter] that [Peñaranda] is a regular, common employee entitled to monetary benefits under Art. 82 [of the Labor Code].

"II. The finding that [Peñaranda] is entitled to the payment of OVERTIME PAY and OTHER MONETARY BENEFITS."18

The Court’s Ruling

The Petition is not meritorious.

Preliminary Issue:

Resolution on the Merits

The CA dismissed Peñaranda’s Petition on purely technical grounds, particularly with regard to the failure to submit supporting documents.

In Atillo v. Bombay,19 the Court held that the crucial issue is whether the documents accompanying the petition before the CA sufficiently supported the allegations therein. Citing this case, Piglas-Kamao v. NLRC20 stayed the dismissal of an appeal in the exercise of its equity jurisdiction to order the adjudication on the merits.

The Petition filed with the CA shows a prima facie case. Petitioner attached his evidence to challenge the finding that he was a managerial employee.21 In his Motion for Reconsideration, petitioner also submitted the pleadings before the labor arbiter in an attempt to comply with the CA rules.22 Evidently, the CA could have ruled on the Petition on the basis of these attachments. Petitioner should be deemed in substantial compliance with the procedural requirements.

Under these extenuating circumstances, the Court does not hesitate to grant liberality in favor of petitioner and to tackle his substantive arguments in the present case. Rules of procedure must be adopted to help promote, not frustrate, substantial justice.23 The Court frowns upon the practice of dismissing cases purely on procedural grounds.24

Considering that there was substantial compliance,25 a liberal interpretation of procedural rules in this labor case is more in keeping with the constitutional mandate to secure social justice.26

First Issue:

Timeliness of Appeal

Under the Rules of Procedure of the NLRC, an appeal from the decision of the labor arbiter should be filed within 10 days from receipt thereof.27

Petitioner’s claim that respondents filed their appeal beyond the required period is not substantiated. In the pleadings before us, petitioner fails to indicate when respondents received the Decision of the labor arbiter. Neither did the petitioner attach a copy of the challenged appeal. Thus, this Court has no means to determine from the records when the 10-day period commenced and terminated. Since petitioner utterly failed to support his claim that respondents’ appeal was filed out of time, we need not belabor that point. The parties alleging have the burden of substantiating their allegations.28

Second Issue:

Nature of Employment

Petitioner claims that he was not a managerial employee, and therefore, entitled to the award granted by the labor arbiter.

Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium pay for working on

rest days.29 Under this provision, managerial employees are "those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision."30

The Implementing Rules of the Labor Code state that managerial employees are those who meet the following conditions:

"(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof;

"(2) They customarily and regularly direct the work of two or more employees therein;

"(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight."31

The Court disagrees with the NLRC’s finding that petitioner was a managerial employee. However, petitioner was a member of the managerial staff, which also takes him out of the coverage of labor standards. Like managerial employees, officers and members of the managerial staff are not entitled to the provisions of law on labor standards.32

The Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and responsibilities:

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

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

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

"(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above."33

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

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

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

"3. To evaluate performance of machinery and manpower.

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

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

"6. Recommend parts and supplies purchases.

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

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

"9. Implement Chemical Dosing.

"10. Perform other task as required by the superior from time to time."34

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

Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the machines and the performance of the workers in the engineering section. This work necessarily required the use of discretion and independent judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the managerial staff.35

Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he stated that he was the foreman responsible for the operation of the boiler.36 The term foreman implies that he was the representative of management over the workers and the operation of the department.37 Petitioner’s evidence also showed that he was the supervisor of the steam plant.38 His classification as supervisor is further evident from the manner his salary was paid. He belonged to the 10% of respondent’s 354 employees who were paid on a monthly basis; the others were paid only on a daily basis.39

On the basis of the foregoing, the Court finds no justification to award overtime pay and premium pay for rest days to petitioner.

WHEREFORE, the Petition is DENIED. Costs against petitioner.

SO ORDERED.

G.R. No. 162813 February 12, 2007

FAR EAST AGRICULTURAL SUPPLY, INC. and/or ALEXANDER UY, Petitioners, vs.JIMMY LEBATIQUE and THE HONORABLE COURT OF APPEALS, Respondents.

D E C I S I O N

QUISUMBING, J.:

Before us is a petition for review on certiorari assailing the Decision1 dated September 30, 2003 of the Court of Appeals in CA-G.R. SP No. 76196 and its Resolution2 dated March 15, 2004 denying the motion for reconsideration. The appellate court had reversed the Decision3 dated October 15, 2002 of the National Labor Relations Commission (NLRC) setting aside the Decision4 dated June 27, 2001 of the Labor Arbiter.

Petitioner Far East Agricultural Supply, Inc. (Far East) hired on March 4, 1996 private respondent Jimmy Lebatique as truck driver with a daily wage of P223.50. He delivered animal feeds to the company’s clients.

On January 24, 2000, Lebatique complained of nonpayment of overtime work particularly on January 22, 2000, when he was required to make a second delivery in Novaliches, Quezon City. That same day, Manuel Uy, brother of Far East’s General Manager and petitioner Alexander Uy, suspended Lebatique apparently for illegal use of company vehicle. Even so, Lebatique reported for work the next day but he was prohibited from entering the company premises.

On January 26, 2000, Lebatique sought the assistance of the Department of Labor and Employment (DOLE) Public Assistance and Complaints Unit concerning the nonpayment of his overtime pay. According to Lebatique, two days later, he received a telegram from petitioners requiring him to report for work. When he did the next day, January 29, 2000, Alexander asked him why he was claiming overtime pay. Lebatique explained that he had never been paid for overtime work since he started working for the company. He also told Alexander that Manuel had fired him. After talking to Manuel, Alexander terminated Lebatique and told him to look for another job.

On March 20, 2000, Lebatique filed a complaint for illegal dismissal and nonpayment of overtime pay. The Labor Arbiter found that Lebatique was illegally dismissed, and ordered his reinstatement and the payment of his full back wages, 13th month pay, service incentive leave pay, and overtime pay. The dispositive portion of the decision is quoted herein in full, as follows:

WHEREFORE, we find the termination of complainant illegal. He should thus be ordered reinstated with full backwages. He is likewise ordered paid his 13th month pay, service incentive leave pay and overtime pay as computed by the Computation and Examination Unit as follows:

a) Backwages:

01/25/00 - 10/31/00 = 9.23 mos.

P 223.50 x 26 x 9.23 = P 53,635.53

11/01/00 – 06/26/01 = 7.86 mos.

P 250.00 x 26 x 7.86 = 51,090.00 P 104,725.53

13th Month Pay: 1/12 of P 104,725.53 = 8,727.13

Service Incentive Leave Pay

01/25/00 – 10/31/00 = 9.23 mos.

P 223.50 x 5/12 x 9.23 = P 859.54

11/01/00 – 06/26/01 = 7.86 mos.

P 250.00 x 5/12 x 7.86 = [818.75] 1,678.29 115,130.95

b) Overtime Pay: (3 hours/day)

03/20/97 – 4/30/97 = 1.36 mos.

P 180/8 x 1.25 x 3 x 26 x 1.36 = P 2,983.50

05/01/97 – 02/05/98 = 9.16 mos.

P 185/8 x 1.25 x 3 x 26 x 9.16 = 20,652.94

02/06/98 – 10/30/99 = 20.83 mos.

P 198/8 x 1.25 x 3 x 26 x [20.83] = 50,265.39

10/31/99 – 01/24/00 = 2.80 mos.

P 223.50/8 x 1.25 x 3 x 26 x 2.80 = 7,626.94 81,528.77

TOTAL AWARD P 196,659.72

SO ORDERED.5

On appeal, the NLRC reversed the Labor Arbiter and dismissed the complaint for lack of merit. The NLRC held that there was no dismissal to speak of since Lebatique was merely suspended. Further, it found that Lebatique was a field personnel, hence, not entitled to overtime pay and service incentive leave pay. Lebatique sought reconsideration but was denied.

Aggrieved, Lebatique filed a petition for certiorari with the Court of Appeals.1awphi1.net

The Court of Appeals, in reversing the NLRC decision, reasoned that Lebatique was suspended on January 24, 2000 but was illegally dismissed on January 29, 2000 when Alexander told him to look for another job. It also found that Lebatique was not a field personnel and therefore entitled to payment of overtime pay, service incentive leave pay, and 13th month pay.

It reinstated the decision of the Labor Arbiter as follows:

WHEREFORE, premises considered, the decision of the NLRC dated 27 December 2002 is hereby REVERSED and the Labor Arbiter’s decision dated 27 June 2001 REINSTATED.

SO ORDERED.6

Petitioners moved for reconsideration but it was denied.

Hence, the instant petition wherein petitioners assign the following errors:

THE COURT OF APPEALS … ERRED IN REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION DATED 15 OCTOBER 2002 AND IN RULING THAT THE PRIVATE RESPONDENT WAS ILLEGALLY DISMISSED.

THE COURT OF APPEALS … ERRED IN REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION DATED 15 OCTOBER 2002 AND IN RULING THAT PRIVATE RESPONDENT IS NOT A FIELD PERSONNEL AND THER[E]FORE ENTITLED TO OVERTIME PAY AND SERVICE INCENTIVE LEAVE PAY.

THE COURT OF APPEALS … ERRED IN NOT DISMISSING THE PETITION FOR CERTIORARI FOR FAILURE OF PRIVATE RESPONDENT TO ATTACH CERTIFIED TRUE COPIES OF THE QUESTIONED DECISION AND RESOLUTION OF THE PUBLIC RESPONDENT.7

Simply stated, the principal issues in this case are: (1) whether Lebatique was illegally dismissed; and (2) whether Lebatique was a field personnel, not entitled to overtime pay.

Petitioners contend that, (1) Lebatique was not dismissed from service but merely suspended for a day due to violation of company rules; (2) Lebatique was not barred from entering the company premises since he never reported back to work; and (3) Lebatique is estopped from claiming that he was illegally dismissed since his complaint before the DOLE was only on the nonpayment of his overtime pay.

Also, petitioners maintain that Lebatique, as a driver, is not entitled to overtime pay since he is a field personnel whose time outside the company premises cannot be determined with reasonable certainty. According to petitioners, the drivers do not observe regular working hours unlike the other office employees. The drivers may report early in the morning to make their deliveries or in the afternoon, depending on the production of animal feeds and the traffic conditions. Petitioners also aver that Lebatique worked for less than eight hours a day.8

Lebatique for his part insists that he was illegally dismissed and was not merely suspended. He argues that he neither refused to work nor abandoned his job. He further contends that abandonment of work is inconsistent with the filing of a complaint for illegal dismissal. He also claims that he is not a field personnel, thus, he is entitled to overtime pay and service incentive leave pay.

After consideration of the submission of the parties, we find that the petition lacks merit. We are in agreement with the decision of the Court of Appeals sustaining that of the Labor Arbiter.

It is well settled that in cases of illegal dismissal, the burden is on the employer to prove that the termination was for a valid cause.9 In this case, petitioners failed to discharge such burden. Petitioners aver that Lebatique was merely suspended for one day but he abandoned his work thereafter. To constitute abandonment as a just cause for dismissal, there must be: (a) absence without justifiable reason; and (b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship.10

The records show that petitioners failed to prove that Lebatique abandoned his job. Nor was there a showing of a clear intention on the part of Lebatique to sever the employer-employee relationship. When Lebatique was verbally told by Alexander Uy, the company’s General Manager, to look for another job, Lebatique was in effect dismissed. Even assuming earlier he was merely suspended for illegal use of company vehicle, the records do not show that he was afforded the opportunity to explain his side. It is clear also from the sequence of the events leading to Lebatique’s dismissal that it was Lebatique’s complaint for nonpayment of his overtime pay that provoked the management to dismiss him, on the erroneous premise that a truck driver is a field personnel not entitled to overtime pay.

An employee who takes steps to protest his layoff cannot by any stretch of imagination be said to have abandoned his work and the filing of the complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment.11 A contrary notion would not only be illogical but also absurd.

It is immaterial that Lebatique had filed a complaint for nonpayment of overtime pay the day he was suspended by management’s unilateral act. What matters is that he filed the complaint for illegal dismissal on March 20, 2000, after he was told not to report for work, and his filing was well within the prescriptive period allowed under the law.

On the second issue, Article 82 of the Labor Code is decisive on the question of who are referred to by the term "field personnel." It provides, as follows:

ART. 82. Coverage. - The provisions of this title [Working Conditions and Rest Periods] shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.

x x x x

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.

In Auto Bus Transport Systems, Inc. v. Bautista,12 this Court emphasized that the definition of a "field personnel" is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer. We held that field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Thus, in order to determine whether an employee is a field

employee, it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not the employee’s time and performance are constantly supervised by the employer.13

As correctly found by the Court of Appeals, Lebatique is not a field personnel as defined above for the following reasons: (1) company drivers, including Lebatique, are directed to deliver the goods at a specified time and place; (2) they are not given the discretion to solicit, select and contact prospective clients; and (3) Far East issued a directive that company drivers should stay at the client’s premises during truck-ban hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.14 Even petitioners admit that the drivers can report early in the morning, to make their deliveries, or in the afternoon, depending on the production of animal feeds.15 Drivers, like Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a regular employee whose tasks are usually necessary and desirable to the usual trade and business of the company. Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay.

Note that all money claims arising from an employer-employee relationship shall be filed within three years from the time the cause of action accrued; otherwise, they shall be forever barred.16 Further, if it is established that the benefits being claimed have been withheld from the employee for a period longer than three years, the amount pertaining to the period beyond the three-year prescriptive period is therefore barred by prescription. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three years before the filing of the complaint.17

Lebatique timely filed his claim for service incentive leave pay, considering that in this situation, the prescriptive period commences at the time he was terminated.18 On the other hand, his claim regarding nonpayment of overtime pay since he was hired in March 1996 is a different matter. In the case of overtime pay, he can only demand for the overtime pay withheld for the period within three years preceding the filing of the complaint on March 20, 2000. However, we find insufficient the selected time records presented by petitioners to compute properly his overtime pay. The Labor Arbiter should have required petitioners to present the daily time records, payroll, or other documents in management’s control to determine the correct overtime pay due Lebatique.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated September 30, 2003 of the Court of Appeals in CA-G.R. SP No. 76196 and its Resolution dated March 15, 2004 are AFFIRMED with MODIFICATION to the effect that the case is hereby REMANDED to the Labor Arbiter for further proceedings to determine the exact amount of overtime pay and other monetary benefits due Jimmy Lebatique which herein petitioners should pay without further delay.

Costs against petitioners.

SO ORDERED.

G.R. No. 116593 September 24, 1997

PULP AND PAPER, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION AND EPIFANIA ANTONIO, respondents.

PANGANIBAN, J.:

In the absence of wage rates specially prescribed for piece-rate workers, how should the separation pay and salary differential of such workers be computed?

Statement of the Case

This is the main question raised in the instant petition for certiorari, filed under Rule 65 of the Rules of Court, to set aside and annul National Labor Relations Commission's 1 Decision 2 promulgated on September 24, 1993 and Resolution 3 dated December 16, 1993 in NLRC NCR CA No. 004041-92. 4 Public respondent's assailed Decision affirmed in toto Labor Arbiter Eduardo J. Carpio's decision 5 dated October 6, 1992, which disposed thus: 6

IN VIEW OF ALL THE FOREGOING, judgement [sic] is hereby rendered:

1. dismissing the complaint for illegal dismissal for lack of merit;

2. ordering respondent Pulp and Papers Distributors Inc. to pay complainant Efipania (sic) Antonio the sum of P49.088.00 representing her separation pay; and

3. ordering respondent to pay the complainant the sum of P31,149.56 representing the underpayment of wages.

4. dismissing all other issues far lack of merit.

The assailed Resolution denied petitioner's motion for reconsideration for lack of merit.

The Facts

The facts as found by the labor arbiter are as follows: 7

A case of illegal dismissal and underpayment of wages [was] filed by MS. EPIFANIA ANTONIO [private respondent herein] against PULP AND PAPER DISTRIBUTORS INC., [petitioner herein] . . . .

In filing the present complaint, complainant in her position paper alleges that she was a regular employee of the . . . corporation having served thereat as Wrapper sometime in September 1975. On November 29, 1991, for unknown reasons, she was advised verbally of her termination and was given a prepared form of Quitclaim and Release which she refused to sign. Instead she brought the present complaint for illegal dismissal.

In charging the [herein petitioner] of underpayment of wages, complainant in the same position paper alleges that, rarely during her employment with the respondent she received her salary, a salary which was in accordance with the minimum wage law. She was not paid overtime pay, holiday pay and five-day service incentive leave pay, hence she is claiming for payments thereof by instituting the present case.

Respondent on the otherhand [sic] denied having terminated the services of the complainant and alleges inter alia that starting 1989 the orders from customers became fewer and dwindled to the point that it is no longer practical to maintain the present number of packer/wrappers. Maintaining the same number of packers/wrappers would mean less pay because the work allocation is no longer the same as it was. Such being the case, the respondent has to reduce temporarily the number of packers/wrappers. Complainant was among those who were temporarily laid-off from work. Complainant last worked with the company on June 29, 1991.

As regards complainant's allegation that on November 29, 1991, she was forced to sign a quitclaim and release by the respondent, the latter clarified that considering that five months from the time the complainant last worked with the company, the management decided to release the complainant and give her a chance to look for another job in the meantime that no job is available for her with the company. In other words, complainant was given the option and considering that she did not sign the documents referred to as the Quitclaim and

Release, the respondent did not insist, and did not terminate the services of the complainant. It was just surprise [sic] to receive the present complaint. In fact, respondent added that the reason why the complainant was called on November 29, 1991 was not to work but to receive her 13th month pay of P636.70 as shown by the voucher she signed (Annex-A, Respondent).

As regards the claim of the complainant for underpayment, respondent did not actually denied (sic) the same but give [sic] the reservation that should the same be determined by this Office it is willing to settle the same considering the fact that complainant herein being paid by results, it is not in a proper position to determine whether the complainant was underpaid or not.

The Issues

Petitioner couched the main issue in this wise: 8

Did the Public Respondent NLRC act correctly in affirming in toto the decision rendered by the labor arbitration branch a quo in NLRC NCR Case no. 00-01-00494-92?

While it expressly admits that private respondent is entitled to separation pay, petitioner raises nonetheless the following queries: "(a) Are the factors in determining the amount of separation pay for a 'piece-rate worker' the same as that of a 'time-worker'? (b) Is a worker, who was terminated for lack of work, entitled to separation pay at the rate of one-month's pay for every year of service?" 9 The petition is based on the following "grounds":

I

Public Respondent NLRC committed grave abuse of discretion and serious reversible error when it affirmed in toto the award of separation pay in favor of private respondent, without bases in fact and in law.

II

Public Respondent NLRC committed grave abuse of discretion and serious reversible error when it affirmed in toto the award of underpayment in favor of private respondent, without bases in fact and in law.

The Public Respondent's Ruling

In dismissing the appeal of petitioner, public respondent reasoned: 10

It is true that all the above circumstances cited by the [herein petitioner] are not present in the case at bar, hence, separation pay based on those circumstances is not owing to the [herein private respondent]. However, it is quite obvious that [petitioner] missed the legal and factual basis why separation pay was awarded by the Labor Arbiter. In the first place, the [petitioner] admits that the complainant-appellee was temporarily laid off on June 29, 1991. This means that there was a temporary suspension of employer-employee relationship between the appellant and the appellee. Lay-off is a temporary termination initiated by the employer, but without prejudice to the reinstatement or recall of the workers who have been temporarily separated. The reasons for laying off employees are varied: lack of work, shutdown for repairs, business reverses, and the like. Always, however, there is the expectation that the employees who have been laid off will be recalled or rehired. This situation is governed by Rule I, Section 12, of Book VI of the Implementing Rules and Regulations of the Labor Code, which provides:

Sec. 12. Suspension of Relationship. — The employer-employee relationship shall be deemed suspended in case of suspension of operation of the business or undertaking of the employer for a period not exceeding six (6) months . . . .

From June 29, 1991 up to the time the complainant-appellee filed her complaint on January 21, 1992, there was more than six (6) months that already elapse (sic) and yet, the appellant failed to recall the appellee to let her resume working. If the appellant was not yet in a possession to recall or reinstate the appellee after six (6) months, up to when shall appellant let her keep in waiting. Of course, she cannot be allowed to wait interminably. That is the reason why the law imposes a period of six (6) months within which the resumption of employer-employee relationship must be resumed in temporary lay-offs. Otherwise, any employer can, in the guise of a temporary lay-off, close its doors to an employee for more than six months and their claim that the lay-off has ripened into termination and try to get away from any liability. The award of separation pay is hereby declared in order.

On the second issue raised by the (petitioner) on appeal, We are also for the Labor Arbiter's ruling upholding the appellee's right to salary differential in the amount computed.

The argument interposed by the [petitioner] based on Art. 101 of the Labor Code, in relation to Rule VII, Section (8), Book III of the Omnibus Implementing Rule and Regulations, will not lie in the case at bar. In the first place, pursuant to the provision of law cited by the [petitioner], all time and motion studies, or any other schemes or devices to determine whether the employees paid by results are being compensated in accordance with the minimum wage requirements, shall only be approved on petition of the interested employer. Thus, it is the fault of the [petitioner] on whose initiative, a time and motion study or any other similar scheme is not yet available in its establishment.

The Court's Ruling

The appeal is not meritorious.

First Issue: Computation of Minimum Wage

Petitioner argues that private respondent was a piece-rate worker and not a time-worker. Since private respondent's employment as "(p)acker/(w)rapper" in 1975 until her separation on June 29, 1991, "(h)er salary depended upon the number of 'reams of bond paper' she packed per day." Petitioner contends that private respondent's work "depended upon the number and availability of purchase orders from customers." Petitioner adds that, oftentimes, "packers/wrappers only work three to four hours a day." Thus, her separation pay "must be based on her latest actual compensation per piece or on the minimum wage per piece as determined by Article 101 of the Labor Code, whichever is higher, and not on the daily minimum wage applicable to time-workers." 11

Compensation of Pieceworkers

In the absence of wage rates based on time and motion studies determined by the labor secretary or submitted by the employer to the labor secretary for his approval, wage rates of piece-rate workers must be based on the applicable daily minimum wage determined by the Regional Tripartite Wages and Productivity Commission. To ensure the payment of fair and reasonable wage rates, Article 101 12 of the Labor Code provides that "the Secretary of Labor shall regulate the payment of wages by results, including pakyao, piecework and other nontime work." The same statutory provision also states that the wage rates should be based, preferably, on time and motion studies, or those arrived at in consultation with representatives of workers' and employers' organizations. In the absence of such prescribed wage rates for piece-rate workers, the ordinary minimum wage rates prescribed by the Regional Tripartite Wages and Productivity Boards should apply. This is in compliance with Section 8 of the Rules Implementing Wage Order Nos. NCR-02 and NCR-02-A — the prevailing wage order at the time of dismissal of private respondent, viz: 13

Sec. 8. Workers Paid by Results. — a) All workers paid by results including those who are paid on piece work, takay, pakyaw, or task basis, shall receive not less than the applicable minimum wage rates prescribed under the Order for the normal working hours which shall not exceed eight (8) hours work a day, or a proportion thereof for work of less than the normal working hours.

The adjusted minimum wage rates for workers paid by results shall be computed in accordance with the following steps:

1) Amount of increase in AMW x 100 = % increase Previous AMW

2) Existing rate/piece x % increase = increase in rate/piece;

3) Existing rate/piece + increase in rate/piece = adjusted rate/piece.

b) The wage rates of workers who are paid by results shall continue to be established in accordance with Art. 101 of the Labor Code, as amended and its implementing regulations. (Emphasis supplied.)

On November 29, 1991, private respondent was orally informed of the termination of her employment. Wage Order No. NCR-02, in effect at the time, set the minimum daily wage for non-agricultural workers like private respondent at P118.00. 14 This was the rate used by the labor arbiter in computing the separation pay of private respondent. We cannot find any abuse of discretion, let alone grave abuse, in the order of the labor arbiter which was later affirmed by the NLRC.

Moreover, since petitioner employed piece-rate workers, it should have inquired from the secretary of labor about their prescribed specific wage rates. In any event, there being no such prescribed rates, petitioner, after consultation with its workers, should have submitted for the labor secretary's approval time and motion studies as basis for the wage rates of its employees. This responsibility of the employer is clear under Section 8, Rule VII, Book III of the Omnibus Rules Implementing the Labor Code:

Sec. 8. Payment by result. (a) On petition of any interested party, or upon its initiative, the Department of Labor shall use all available devices, including the use of time and motion studies and consultations with representatives of employers' and workers' organizations, to determine whether the employees in any industry or enterprise are being compensated in accordance with the minimum wage requirements of this Rule.

(b) The basis for the establishment of rates for piece, output or contract work shall be the performance of an ordinary worker of minimum skill or ability.

(c) An ordinary worker of minimum skill or ability is the average worker of the lowest producing group representing 50% of the total number of employees engaged in similar employment in a particular establishment, excluding learners, apprentices and handicapped workers employed therein.

(d) Where the output rates established by the employer do not conform with the standards prescribed herein, or with the rates prescribed by the Department of Labor in an appropriate order, the employees shall be entitled to the difference between the amount to which they are entitled to receive under such prescribed standards or rates and that actually paid them by employer.

In the present case, petitioner as the employer unquestionably failed to discharge the foregoing responsibility. Petitioner did not submit to the secretary of labor a proposed wage rate — based on time and motion studies and reached after consultation with the representatives from both workers' and employers' organization — which would have applied to its piece-rate workers. Without those submissions, the labor arbiter had the duty to use the daily minimum wage rate for non-agricultural workers prevailing at the time of private respondent's dismissal, as prescribed by the Regional Tripartite Wages and Productivity Boards. Put differently, petitioner did not take the initiative of proposing an appropriate wage rate for its piece-rate workers. In the absence of such wage rate, the labor arbiter cannot be faulted for applying the prescribed minimum wage rate in the computation of private respondent's separation pay. In fact, it acted and ruled correctly and legally in the premises.

It is clear, therefore, that the applicable minimum wage for an eight-hour working day is the basis for the computation of the separation pay of piece-rate workers like private respondent. The computed daily wage should not be reduced on the basis of unsubstantiated claims that her daily working hours were less than eight. Aside from its bare assertion, petitioner presented no clear proof that private respondent's regular working day was less than eight hours. Thus, the labor arbiter correctly used the full amount of P118.00 per day in computing private respondent's separation pay. We agree with the following computation: 15

Considering therefore that complainant had been laid-off for more than six (6) months now, we strongly feel that it is already reasonable for the respondent to pay the complainant her separation pay of one month for every year of service, a fraction of six (6) months to be considered as one whole year. Separation pay should be computed based on her minimum salary as will be determined hereunder.

Separation pay 1 month = 16 yearsP118.00 x 26 x 16 years = P49,088.00

The amount "P118.00" represents the applicable daily minimum wage per Wage Order Nos. NCR-02 and NCR-02-A; "26", the number of working days in a month after excluding the four Sundays which are deemed rest days; "16", the total number of years spent by private respondent in the employ of petitioner.

Second Issue: Computation of Separation Pay

Petitioner questions not only the basis for computing private respondent's monthly wage; it also contends that private respondent's separation pay should not have been computed at one month's pay for every year of service. Because private respondent should be considered retrenched, the separation pay should be "one month's pay or at least one/half (1/2) month pay for every year of service, whichever is higher, and not one (1) month's pay for every year of service as public respondent had ruled." 16

Petitioner misapprehended the ground relied upon by public respondent for awarding separation pay. In this case, public respondent held that private respondent was constructively dismissed, pursuant to Article 286 of the Labor Code which reads:

Art. 286. When employment not deemed terminated. — The bonafide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later that one (1) month from his resumption of operations of his employer or from his relief from the military or civic duty.

Petitioner failed to discern that public respondent, in finding that the services of private respondent were terminated, merely adopted by analogy the rule on constructive dismissal. Since private respondent was not reemployed within six (6) months from the "suspension" of her employment, she is deemed to have been constructively dismissed. 17 Otherwise, private respondent will remain in a perpetual "floating status." Because petitioner had not shown by competent evidence any just cause for the dismissal of private respondent, she is entitled to reinstatement 18 or, if this is not feasible, to separation pay equivalent to one (1) month salary for every year of service. Private respondent, however, neither asked for reinstatement 19 nor appealed from the labor arbiter's finding that she was not illegally dismissed; she merely prayed for the grant of her monetary claims. Thus, we sustain the award of separation pay

made by public respondent, 20 for employees constructively dismissed are entitled to separation pay. Because she did not ask for more, we cannot give her more. We repeat: she appealed neither the decision of the labor arbiter nor that of the NLRC. Hence, she is not entitled to any affirmative relief.

Furthermore, we cannot sustain petitioner's claim that private respondent was retrenched. For retrenchment to be considered a ground for termination, the employer must serve a written notice on the workers and the Department of Labor and Employment at least one month before the intended date thereof. 21 Petitioner did not comply with this requirement.

Third Issue: Determination of Salary Differential

In light of the foregoing discussion, we must also dismiss petitioner's challenge to the computation of salary differential. As earlier observed, private respondent is entitled to the minimum wage prevailing at the time of the termination of her employment. The same rate of minimum wage, P118.00, should be used in computing her salary differential resulting from petitioner's underpayment of her wages. Thus, the labor arbiter correctly deducted private respondent's actually received wage of P60 a day from the prescribed daily minimum wage of P118.00, and multiplied the difference by 26 working days, and subsequently by 16 years, equivalent to her length of service with petitioner. Thus, the amount of P31,149.56 as salary differential. 22

Petitioner argues that "the work of the private respondent is seasonal, being dependent upon the availability of job-orders" and not "twenty-six (26) days a month." 23 Further, petitioner contends that private respondent herself admitted she was "a piece worker whose work [was] seasonal." 24

Contrary to the assertion of petitioner, neither the assailed Decision nor the pleadings of private respondent show that private respondent's work was seasonal. More important, petitioner utterly failed to substantiate its allegation that private respondent's work was seasonal. We observe that the labor arbiter based the computation of the salary differential on a 26-day month on the presumption that private respondent's work was continuous. In view of the failure of petitioner to support its claim, we must sustain the correctness of this computation.

WHEREFORE, premises considered, the petition is DISMISSED and the assailed Decision is AFFIRMED. Costs against petitioner.

SO ORDERED

G.R. No. 185556 March 28, 2011

SUPREME STEEL CORPORATION, Petitioner, vs.NAGKAKAISANG MANGGAGAWA NG SUPREME INDEPENDENT UNION (NMS-IND-APL), Respondent.

D E C I S I O N

NACHURA, J.:

This petition for review on certiorari assails the Court of Appeals (CA) Decision1 dated September 30, 2008, and Resolution dated December 4, 2008, which affirmed the finding of the National Labor Relations Commission (NLRC) that petitioner violated certain provisions of the Collective Bargaining Agreement (CBA).

Petitioner Supreme Steel Pipe Corporation is a domestic corporation engaged in the business of manufacturing steel pipes for domestic and foreign markets. Respondent Nagkakaisang Manggagawa ng Supreme Independent Union is the certified bargaining agent of petitioner’s rank-and-file employees. The CBA2 in question was executed by the parties to cover the period from June 1, 2003 to May 31, 2008.

The Case

On July 27, 2005, respondent filed a notice of strike with the National Conciliation and Mediation Board (NCMB) on the ground that petitioner violated certain provisions of the CBA. The parties failed to settle their dispute. Consequently, the Secretary of Labor certified the case to the NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor Code.

Respondent alleged eleven CBA violations, delineated as follows:

A. Denial to four employees of the CBA- provided wage increase

Article XII, Section 1 of the CBA provides:

Section 1. The COMPANY shall grant a general wage increase, over and above to all employees, according to the following schedule:

A. Effective June 1, 2003 P14.00 per working day;

B. Effective June 1, 2004 P12.00 per working day; and

C. Effective June 1, 2005 P12.00 per working day.3

Respondent alleged that petitioner has repeatedly denied the annual CBA increases to at least four individuals: Juan Niño, Reynaldo Acosta, Rommel Talavera, and Eddie Dalagon. According to respondent, petitioner gives an anniversary increase to its employees upon reaching their first year of employment. The four employees received their respective anniversary increases and petitioner used such anniversary increase to justify the denial of their CBA increase for the year.4

Petitioner explained that it has been the company’s long standing practice that upon reaching one year of service, a wage adjustment is granted, and, once wages are adjusted, the increase provided for in the CBA for that year is no longer implemented. Petitioner claimed that this practice was not objected to by respondent as evidenced by the employees’ pay slips.5

Respondent countered that petitioner failed to prove that, as a matter of company practice, the anniversary increase took the place of the CBA increase. It contended that all employees should receive the CBA stipulated increase for the years 2003 to 2005.6

B. Contracting-out labor

Article II, Section 6 of the CBA provides:

Section 6. Prohibition of Contracting Out of Work of Members of Bargaining Unit. Thirty (30) days from the signing of this CBA, contractual employees in all departments, except Warehouse and Packing Section, shall be phased out. Those contractual employees who are presently in the workforce of the COMPANY shall no longer be allowed to work after the expiration of their contracts without prejudice to being hired as probationary employees of the COMPANY.7

Respondent claimed that, contrary to this provision, petitioner hired temporary workers for five months based on uniformly worded employment contracts, renewable for five months, and assigned them to almost all of the

departments in the company. It pointed out that, under the CBA, temporary workers are allowed only in the Warehouse and Packing Section; consequently, employment of contractual employees outside this section, whether direct or agency-hired, was absolutely prohibited. Worse, petitioner never regularized them even if the position they occupied and the services they performed were necessary and desirable to its business. Upon the expiration of their contracts, these workers would be replaced with other workers with the same employment status. This scheme is a clear circumvention of the laws on regular employment. 8

Respondent argued that the right to self-organization goes beyond the maintenance of union membership. It emphasized that the CBA maintains a union shop clause which gives the regular employees 30 days within which to join respondent as a condition for their continued employment. Respondent maintained that petitioner’s persistent refusal to grant regular status to its employees, such as Dindo Buella, who is assigned in the Galvanizing Department, violates the employees’ right to self-organization in two ways: (1) they are deprived of a representative for collective bargaining purposes; and (2) respondent is deprived the right to expand its membership. Respondent contended that a union’s strength lies in its number, which becomes crucial especially during negotiations; after all, an employer will not bargain seriously with a union whose membership constitutes a minority of the total workforce of the company. According to respondent, out of the 500 employees of the company, only 147 are union members, and at least 60 employees would have been eligible for union membership had they been recognized as regular employees.9

For its part, petitioner admitted that it hired temporary workers. It purportedly did so to cope with the seasonal increase of the job orders from abroad. In order to comply with the job orders, petitioner hired the temporary workers to help the regular workers in the production of steel pipes. Petitioner maintained that these workers do not affect respondent’s membership. Petitioner claimed that it agreed to terminate these temporary employees on the condition that the regular employees would have to perform the work that these employees were performing, but respondent refused. Respondent’s refusal allegedly proved that petitioner was not contracting out the services being performed by union members. Finally, petitioner insisted that the hiring of temporary workers is a management prerogative.10

C. Failure to provide shuttle service

Petitioner has allegedly reneged on its obligation to provide shuttle service for its employees pursuant to Article XIV, Section 7 of the CBA, which provides:

Section 7. Shuttle Service. As per company practice, once the company vehicle used for the purpose has been reconditioned.11

Respondent claimed that the company vehicle which would be used as shuttle service for its employees has not been reconditioned by petitioner since the signing of the CBA on February 26, 2004.12 Petitioner explained that it is difficult to implement this provision and simply denied that it has reneged on its obligation.13

D. Refusal to answer for the medical expenses incurred by three employees

Respondent asserted that petitioner is liable for the expenses incurred by three employees who were injured while in the company premises. This liability allegedly stems from Article VIII, Section 4 of the CBA which provides:

Section 4. The COMPANY agrees to provide first aid medicine and first aid service and consultation free of charge to all its employees.14

According to respondent, petitioner’s definition of what constitutes first aid service is limited to the bare minimum of treating injured employees while still within the company premises and referring the injured employee to the Chinese General Hospital for treatment, but the travel expense in going to the hospital is charged to the employee. Thus, when Alberto Guevarra and Job Canizares, union members, were injured, they had to pay P90.00 each for transportation expenses in going to the hospital for treatment and going back to the company thereafter. In the case of Rodrigo Solitario, petitioner did not even shoulder the cost of the first aid medicine, amounting to P2,113.00, even if he was injured during the company sportsfest, but the amount was deducted, instead, from his salary. Respondent insisted that this violates the above cited provision of the CBA.15

Petitioner insisted that it provided medicine and first aid assistance to Rodrigo Solitario.1avvphi1 It alleged that the latter cannot claim hospitalization benefits under Article VIII, Section 116 of the CBA because he was not confined in a hospital.17

E. Failure to comply with the time-off with pay provision

Article II, Section 8 of the CBA provides:

Section 8. Time-Off with Pay. The COMPANY shall grant to the UNION’s duly authorized representative/s or to any employee who are on duty, if summoned by the UNION to testify, if his/her presence is necessary, a paid time-off for the handling of grievances, cases, investigations, labor-management conferences provided that if the venue of the case is outside Company premises involving [the] implementation and interpretation of the CBA, two (2) representatives of the UNION who will attend the said hearing shall be considered time-off with pay. If an employee on a night shift attends grievance on labor-related cases and could not report for work due to physical condition, he may avail of union leave without need of the two (2) days prior notice.18

Respondent contended that under the said provision, petitioner was obliged to grant a paid time-off to respondent’s duly authorized representative or to any employee who was on duty, when summoned by respondent to testify or when the employee’s presence was necessary in the grievance hearings, meetings, or investigations.19

Petitioner admitted that it did not honor the claim for wages of the union officers who attended the grievance meetings because these meetings were initiated by respondent itself. It argued that since the union officers

were performing their functions as such, and not as employees of the company, the latter should not be liable. Petitioner further asserted that it is not liable to pay the wages of the union officers when the meetings are held beyond company time (3:00 p.m.). It claimed that time-off with pay is allowed only if the venue of the meeting is outside company premises and the meeting involves the implementation and interpretation of the CBA.20

In reply, respondent averred that the above quoted provision does not make a qualification that the meetings should be held during office hours (7:00 a.m. to 3:00 p.m.); hence, for as long as the presence of the employee is needed, time spent during the grievance meeting should be paid.21

F. Visitors’ free access to company premises Respondent charged petitioner with violation of Article II, Section 7 of the CBA which provides:

Section 7. Free Access to Company Premises. Local Union and Federation officers (subject to company’s security measure) shall be allowed during working hours to enter the COMPANY premises for the following reasons:

a. To investigate grievances that have arisen;

b. To interview Union Officers, Stewards and members during reasonable hours; and

c. To attend to any meeting called by the Management or the UNION.22

G. Failure to comply with reporting time-off provision

Respondent maintained that a brownout is covered by Article XII, Section 3 of the CBA which states:

Section 3. Reporting Time-Off. The employees who have reported for work but are unable to continue working because of emergencies such as typhoons, flood, earthquake, transportation strike, where the COMPANY is affected and in case of fire which occurs in the block where the home of the employee is situated and not just across the street and serious illness of an immediate member of the family of the employee living with him/her and no one in the house can bring the sick family member to the hospital, shall be paid as follows:

a. At least half day if the work stoppage occurs within the first four (4) hours of work; and

b. A whole day if the work stoppage occurs after four (4) hours of work.23

Respondent averred that petitioner paid the employees’ salaries for one hour only of the four-hour brownout that occurred on July 25, 2005 and refused to pay for the remaining three hours. In defense, petitioner simply insisted that brownouts are not included in the above list of emergencies.24

Respondent rejoined that, under the principle of ejusdem generis, brownouts or power outages come within the "emergencies" contemplated by the CBA provision. Although brownouts were not specifically identified as one of the emergencies listed in the said CBA provision, it cannot be denied that brownouts fall within the same kind or class of the enumerated emergencies. Respondent maintained that the intention of the provision was to compensate the employees for occurrences which are beyond their control, and power outage is one of such occurrences. It insisted that the list of emergencies is not an exhaustive list but merely gives an idea as to what constitutes an actual emergency that is beyond the control of the employee.25

H. Dismissal of Diosdado Madayag

Diosdado Madayag was employed as welder by petitioner. He was served a Notice of Termination dated March 14, 2005 which read:

Please consider this as a Notice of Termination of employment effective March 14, 2005 under Art. 284 of the Labor Code and its Implementing Rules.

This is based on the medical certificate submitted by your attending physician, Lucy Anne E. Mamba, M.D., Jose R. Reyes Memorial Medical Center dated March 7, 2005 with the following diagnosis:

‘Diabetes Mellitus Type 2’

Please be guided accordingly.26

Respondent contended that Madayag’s dismissal from employment is illegal because petitioner failed to obtain a certification from a competent public authority that his disease is of such nature or at such stage that it cannot be cured within six months even after proper medical treatment. Petitioner also failed to prove that Madayag’s continued employment was prejudicial to his health or that of his colleagues.27

Petitioner, on the other hand, alleged that Madayag was validly terminated under Art. 28428 of the Labor Code and that his leg was amputated by reason of diabetes, which disease is not work-related. Petitioner claimed that it was willing to pay Madayag 13 days for every year of service but respondent was asking for additional benefits.29

I. Denial of paternity leave benefit to two employees

Article XV, Section 2 of the CBA provides:

Section 2. Paternity Leave. As per law[,] [t]he Company shall, as much as possible, pay paternity leave within 2 weeks from submission of documents.30

Petitioner admitted that it denied this benefit to the claimants for failure to observe the requirement provided in the Implementing Rules and Regulations of Republic Act No. 8187 (Paternity Leave Act of 1995), that is, to notify the employer of the pregnancy of their wives and the expected date of delivery.31

Respondent argued that petitioner is relying on technicalities by insisting that the denial was due to the two employees’ failure to notify it of the pregnancy of their respective spouses. It maintained that the notification requirement runs counter to the spirit of the law. Respondent averred that, on grounds of social justice, the oversight to notify petitioner should not be dealt with severely by denying the two claimants this benefit.32

J. Discrimination and harassment

According to respondent, petitioner was contemptuous over union officers for protecting the rights of union members. In an affidavit executed by Chito Guadaña, union secretary, he narrated that Alfred Navarro, Officer-in-Charge of the Packing Department, had been harsh in dealing with his fellow employees and would even challenge some workers

to a fight. He averred that Navarro had an overbearing attitude during work and grievance meetings. In November 2004, Navarro removed Guadaña, a foreman, from his position and installed another foreman from another section. The action was allegedly brought about by earlier grievances against Navarro’s abuse. Petitioner confirmed his transfer to another section in violation of Article VI, Section 6 of the CBA,33 which states in part:

Section 6. Transfer of Employment. – No permanent positional transfer outside can be effected by the COMPANY without discussing the grounds before the Grievance Committee. All transfer shall be with advance notice of two (2) weeks. No transfer shall interfere with the employee’s exercise of the right to self-organization.34

Respondent also alleged that Ariel Marigondon, union president, was also penalized for working for his fellow employees. One time, Marigondon inquired from management about matters concerning tax discrepancies because it appeared that non-taxable items were included as part of taxable income. Thereafter, Marigondon was transferred from one area of operation to another until he was allegedly forced to accept menial jobs of putting control tags on steel pipes, a kind of job which did not require his 16 years of expertise in examining steel pipes.35

Edgardo Masangcay, respondent’s Second Vice President, executed an affidavit wherein he cited three instances when his salary was withheld by petitioner. The first incident happened on May 28, 2005 when petitioner refused to give his salary to his wife despite presentation of a proof of identification (ID) and letter of authorization. On June 18, 2005, petitioner also refused to release his salary to Pascual Lazaro despite submission of a letter of authority and his ID and, as a result, he was unable to buy medicine for his child who was suffering from asthma attack. The third instance happened on June 25, 2005 when his salary was short of P450.00; this amount was however released the following week.36

Petitioner explained that the transfer of the employee from one department to another was the result of downsizing the Warehouse Department, which is a valid exercise of management prerogative. In Guadaña’s case, Navarro denied that he was being harsh but claimed that he merely wanted to stress some points. Petitioner explained that Guadaña was transferred when the section where he was assigned was phased out due to the installation of new machines. Petitioner pointed out that the other workers assigned in said section were also transferred.37

For the petitioner, Emmanuel Mendiola, Production Superintendent, also executed an affidavit attesting that the allegation of Ariel Marigondon, that he was harassed and was a victim of discrimination for being respondent’s President, had no basis. Marigondon pointed out that after the job order was completed, he was reassigned to his original shift and group.38

Petitioner also submitted the affidavits of Elizabeth Llaneta Aguilar, disbursement clerk and hiring staff, and Romeo T. Sy, Assistant Personnel Manager. Aguilar explained that she did not mean to harass Masangcay, but she merely wanted to make sure that he would receive his salary. Affiant Sy admitted that he refused to release Masangcay’s salary to a woman who presented herself as his (Masangcay’s) wife since nobody could attest to it. He claimed that such is not an act of harassment but a precautionary measure to protect Masangcay’s interest.39

K. Non-implementation of COLA in Wage Order Nos. RBIII-10 and 11

Respondent posited that any form of wage increase granted through the CBA should not be treated as compliance with the wage increase given through the wage boards. Respondent claimed that, for a number of years, petitioner has complied with Article XII, Section 2 of the CBA which provides:

Section 2. All salary increase granted by the COMPANY shall not be credited to any future contractual or legislated wage increases. Both increases shall be implemented separate and distinct from the increases stated in this Agreement. It should be understood by both parties that contractual salary increase are separate and distinct from legislated wage increases, thus the increase brought by the latter shall be enjoyed also by all covered employees.40

Respondent maintained that for every wage order that was issued in Region 3, petitioner never hesitated to comply and grant a similar increase. Specifically, respondent cited petitioner’s compliance with Wage Order No. RBIII-10 and grant of the mandated P15.00 cost of living allowance (COLA) to all its employees. Petitioner, however, stopped implementing it to non-minimum wage earners on July 24, 2005. It contended that this violates Article 100 of the

Labor Code which prohibits the diminution of benefits already enjoyed by the workers and that such grant of benefits had already ripened into a company practice.41

Petitioner explained that the COLA provided under Wage Order No. RBIII-10 applies to minimum wage earners only and that, by mistake, it implemented the same across the board or to all its employees. After realizing its mistake, it stopped integrating the COLA to the basic pay of the workers who were earning above the minimum wage.42

The NLRC’s Ruling

Out of the eleven issues raised by respondent, eight were decided in its favor; two (denial of paternity leave benefit and discrimination of union members) were decided in favor of petitioner; while the issue on visitor’s free access to

company premises was deemed settled during the mandatory conference. The dispositive portion of the NLRC Decision dated March 30, 2007 reads:

WHEREFORE, Supreme Steel Pipe Corporation (the Company) is hereby ordered to:

1) implement general wage increase to Juan Niño, Eddie Dalagon and Rommel Talavera pursuant to the CBA in June 2003, 2004 and 2005;

2) regularize workers Dindo Buella and 60 other workers and to respect CBA provision on contracting-out labor;

3) recondition the company vehicle pursuant to the CBA;

4) answer for expenses involved in providing first aid services including transportation expenses for this purpose, as well as to reimburse Rodrigo Solitario the sum of P2,113.00;

5) pay wages of union members/officers who attended grievance meetings as follows:

1) D. Serenilla - P115.24375

2) D. Miralpes - P115.80625

3) E. Mallari - P108.7625

4) C. Cruz - P114.65313

5) J. Patalbo - P161.0625

6) J.J. Muñoz - P111.19375

7) C. Guadaña - P56.94375

8) J. Patalbo - P161.0625

9) E. Mallari - P108.7625

10) C. Guadaña - P113.8875

11) A. Marigondon - P170.30625

12) A. Marigondon - P181.66

13) A. Marigondon - P181.66

14) E. Masangcay - P175.75

15) A. Marigondon - P181.66

16) E. Masangcay - P175.75

17) A. Marigondon - P181.66

18) F. Servano - P174.02

19) R. Estrella - P181.50

20) A. Marigondon - P181.66

6) pay workers their salary for the 3 hours of the 4 hour brownout as follows:

1) Alagon, Jr., Pedro - P130.0875

2) Aliwalas, Cristeto - P108.5625

3) Baltazar, Roderick - P 90.1875

4) Bañez, Oliver - P 90.9375

5) Prucal, Eduardo - P126.015

6) Calimquin, Rodillo - P131.0362

7) Clave, Arturo - P125.64

8) Cadavero, Rey - P108.5625

9) De Leon, Romulo - P124.35

10) Lactao, Noli - P126.015

11) Layco, Jr., Dandino - P130.5375

12) Legaspi, Melencio - P127.63

13) Quiachon, Rogelio - P130.5525

14) Sacmar, Roberto - P108.9375

15) Tagle, Farian - P129.3375

16) Villavicencio, Victor - P126.015

17) Agra, Romale - P126.015

18) Basabe, Luis - P128.5575

19) Bornasal, Joel - P127.53

20) Casitas, Santiago - P128.5575

21) Celajes, Bonifacio - P128.1825

22) Avenido, Jerry - P133.2487

23) Gagarin, Alfredo - P108.9375

24) Layson, Paulo - P131.745

25) Lledo, Asalem - P128.5575

26) Marigondon, Ariel - P131.745

27) Orcena, Sonnie - P126.015

28) Servano, Fernando - P126.015

29) Versola, Rodrigo - P126.015

7) reinstate Diosdado Madayag to his former position without loss of seniority rights and to pay full backwages and other benefits from 14 March 2005, date of dismissal, until the date of this Decision; if reinstatement is impossible[,] to pay separation pay of one month pay for every year of service in addition to backwages;

8) dismiss the claim for paternity leave for failure of claimants to observe the requirements;

9) dismiss the charge of harassment and discrimination for lack of merit; and to

10) continue to implement COLA under Wage Order Nos. [RBIII]-10 & 11 across the board.

The issue on Visitors’ Free Access to Company Premises is dismissed for being moot and academic after it was settled during the scheduled conferences.

SO ORDERED.43

Forthwith, petitioner elevated the case to the CA, reiterating its arguments on the eight issues resolved by the NLRC in respondent’s favor.

The CA’s Ruling

On September 30, 2008, the CA rendered a decision dismissing the petition, thus:

WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit. The assailed Decision dated March 30, 2007 and Resolution dated April 28, 2008 of the National Labor Relations Commission in NLRC NCR CC No. 000305-05 are hereby AFFIRMED.

With costs against the petitioner.

SO ORDERED.44

According to the CA, petitioner failed to show that the NLRC committed grave abuse of discretion in finding that it violated certain provisions of the CBA. The NLRC correctly held that every employee is entitled to the wage increase under the CBA despite receipt of an anniversary increase. The CA concluded that, based on the wording of the CBA, which uses the words "general increase" and "over and above," it cannot be said that the parties have intended the anniversary increase to be given in lieu of the CBA wage increase.45

The CA declared that the withdrawal of the COLA under Wage Order No. RBIII-10 from the employees who were not minimum wage earners amounted to a diminution of benefits because such grant has already ripened into a company practice. It pointed out that there was no ambiguity or doubt as to who were covered by the wage order. Petitioner, therefore, may not invoke error or mistake in extending the COLA to all employees and such act can only be construed as "as a voluntary act on the part of the employer."46 The CA opined that, considering the foregoing, the ruling in Globe Mackay Cable and Radio Corp. v. NLRC47 clearly did not apply as there was no doubtful or difficult question involved in the present case.48

The CA sustained the NLRC’s interpretation of Art. VIII, Section 4 of the CBA as including the expenses for first aid medicine and transportation cost in going to the hospital. The CA stressed that the CBA should be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it was negotiated and the purpose which it intended to serve.49

Based on the principle of liberal construction of the CBA, the CA likewise sustained the NLRC’s rulings on the issues pertaining to the shuttle service, time-off for attendance in grievance meetings/hearings, and time-off due to brownouts.50

The CA further held that management prerogative is not unlimited: it is subject to limitations found in law, a CBA, or the general principles of fair play and justice. It stressed that the CBA provided such limitation on management prerogative to contract-out labor, and compliance with the CBA is mandated by the express policy of the law.51

Finally, the CA affirmed the NLRC’s finding that Madayag’s dismissal was illegal. It emphasized that the burden to prove that the employee’s disease is of such nature or at such stage that it cannot be cured within a period of six months rests on the employer. Petitioner failed to submit a certification from a competent public authority attesting to such fact; hence, Madayag’s dismissal is illegal.52

Petitioner moved for a reconsideration of the CA’s decision. On December 4, 2008, the CA denied the motion for lack of merit.53

Dissatisfied, petitioner filed this petition for review on certiorari, contending that the CA erred in finding that it violated certain provisions of the CBA.

The Court’s Ruling

The petition is partly meritorious.

It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and compliance therewith is mandated by the express policy of the law. If the terms of a CBA are clear and there is no doubt as to the intention of the contracting parties, the literal meaning of its stipulation shall prevail.54 Moreover, the CBA must be construed liberally rather than narrowly and technically and the Court must place a practical and realistic construction upon it.55 Any doubt in the interpretation of any law or provision affecting labor should be resolved in favor of labor.56

Upon these well-established precepts, we sustain the CA’s findings and conclusions on all the issues, except the issue pertaining to the denial of the COLA under Wage Order No. RBIII-10 and 11 to the employees who are not minimum wage earners.

The wording of the CBA on general wage increase cannot be interpreted any other way: The CBA increase should be given to all employees "over and above" the amount they are receiving, even if that amount already includes an anniversary increase. Stipulations in a contract must be read together, not in isolation from one another.57 Consideration of Article XIII, Section 2 (non-crediting provision), bolsters such interpretation. Section 2 states that "[a]ll salary increase granted by the company shall not be credited to any future contractual or legislated wage increases." Clearly then, even if petitioner had already awarded an anniversary increase to its employees, such increase cannot be credited to the "contractual" increase as provided in the CBA, which is considered "separate and distinct."

Petitioner claims that it has been the company practice to offset the anniversary increase with the CBA increase. It however failed to prove such material fact. Company practice, just like any other fact, habits, customs, usage or patterns of conduct must be proven. The offering party must allege and prove specific, repetitive conduct that might constitute evidence of habit,58 or company practice. Evidently, the pay slips of the four employees do not serve as sufficient proof.

Petitioner’s excuse in not providing a shuttle service to its employees is unacceptable. In fact, it can hardly be considered as an excuse. Petitioner simply says that it is difficult to implement the provision. It relies on the fact that

"no time element [is] explicitly stated [in the CBA] within which to fulfill the undertaking." We cannot allow petitioner to dillydally in complying with its obligation and take undue advantage of the fact that no period is provided in the CBA. Petitioner should recondition the company vehicle at once, lest it be charged with and found guilty of unfair labor practice.

Petitioner gave a narrow construction to the wording of the CBA when it denied (a) reimbursement for the first-aid medicines taken by Rodrigo Solitario when he was injured during the company sportsfest and the transportation cost incurred by Alberto Guevara and Job Canizares in going to the hospital, (b) payment of the wages of certain employees during the time they spent at the grievance meetings, and (c) payment of the employees’ wages during the brownout that occurred on July 25, 2002. As previously stated, the CBA must be construed liberally rather than narrowly and technically. It is the duty of the courts to place a practical and realistic construction upon the CBA, giving due consideration to the context in which it is negotiated and the purpose which it is intended to serve. Absurd and illogical interpretations should be avoided.59 A CBA, like any other contract, must be interpreted according to the intention of the parties.60

The CA was correct in pointing out that the concerned employees were not seeking hospitalization benefits under Article VIII, Section 1 of the CBA, but under Section 4 thereof; hence, confinement in a hospital is not a prerequisite for the claim. Petitioner should reimburse Solitario for the first aid medicines; after all, it is the duty of the employer to maintain first- aid medicines in its premises.61 Similarly, Guevara and Canizares should also be reimbursed for the transportation cost incurred in going to the hospital. The Omnibus Rules Implementing the Labor Code provides that, where the employer does not have an emergency hospital in its premises, the employer is obliged to transport an employee to the nearest hospital or clinic in case of emergency.62

We likewise agree with the CA on the issue of nonpayment of the time-off for attending grievance meetings. The intention of the parties is obviously to compensate the employees for the time that they spend in a grievance meeting as the CBA provision categorically states that the company will pay the employee "a paid time-off for handling of grievances, investigations, labor-management conferences." It does not make a qualification that such meeting should be held during office hours or within the company premises.

The employees should also be compensated for the time they were prevented from working due to the brownout. The CBA enumerates some of the instances considered as "emergencies" and these are "typhoons, flood earthquake, transportation strike." As correctly argued by respondent, the CBA does not exclusively enumerate the situations which are considered "emergencies." Obviously, the key element of the provision is that employees "who have reported for work are unable to continue working" because of the incident. It is therefore reasonable to conclude that brownout or power outage is considered an "emergency" situation.

Again, on the issue of contracting-out labor, we sustain the CA. Petitioner, in effect, admits having hired "temporary" employees, but it maintains that it was an exercise of management prerogative, necessitated by the increase in demand for its product.

Indeed, jurisprudence recognizes the right to exercise management prerogative. Labor laws also discourage interference with an employer's judgment in the conduct of its business. For this reason, the Court often declines to interfere in legitimate business decisions of employers. The law must protect not only the welfare of employees, but also the right of employers.63 However, the exercise of management prerogative is not unlimited. Managerial prerogatives are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.64 The CBA is the norm of conduct between the parties and, as previously stated, compliance therewith is mandated by the express policy of the law.65

The CBA is clear in providing that temporary employees will no longer be allowed in the company except in the Warehouse and Packing Section. Petitioner is bound by this provision. It cannot exempt itself from compliance by invoking management prerogative. Management prerogative must take a backseat when faced with a CBA provision. If petitioner needed additional personnel to meet the increase in demand, it could have taken measures without violating the CBA.

Respondent claims that the temporary employees were hired on five-month contracts, renewable for another five months. After the expiration of the contracts, petitioner would hire other persons for the same work, with the same employment status.

Plainly, petitioner’s scheme seeks to prevent employees from acquiring the status of regular employees. But the Court has already held that, where from the circumstances it is apparent that the periods of employment have been imposed to preclude acquisition of security of tenure by the employee, they should be struck down or disregarded as contrary to public policy and morals.66 The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business of the employer. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists.67

We also uphold the CA’s finding that Madayag’s dismissal was illegal. It is already settled that the burden to prove the validity of the dismissal rests upon the employer. Dismissal based on Article 284 of the Labor Code is no different, thus:

The law is unequivocal: the employer, before it can legally dismiss its employee on the ground of disease, must adduce a certification from a competent public authority that the disease of which its employee is suffering is of such nature or at such a stage that it cannot be cured within a period of six months even with proper treatment.

x x x x

In Triple Eight Integrated Services, Inc. v. NLRC, the Court explains why the submission of the requisite medical certificate is for the employer’s compliance, thus:

The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee’s illness and thus defeat the public policy on the protection of labor.

x x x x68

However, with respect to the issue of whether the COLA under Wage Order Nos. RBIII-10 and 11 should be implemented across the board, we hold a different view from that of the CA. No diminution of benefits would result if the wage orders are not implemented across the board, as no such company practice has been established.

Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the employees. There is diminution of benefits when it is shown that: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period of time; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the construction or application of a doubtful or difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the employer.69

To recall, the CA arrived at its ruling by relying on the fact that there was no ambiguity in the wording of the wage order as to the employees covered by it. From this, the CA concluded that petitioner actually made no error or mistake, but acted voluntarily, in granting the COLA to all its employees. It therefore took exception to the Globe Mackay case which, according to it, applies only when there is a doubtful or difficult question involved.

The CA failed to note that Globe Mackay primarily emphasized that, for the grant of the benefit to be considered voluntary, "it should have been practiced over a long period of time, and must be shown to have been consistent and deliberate."70 The fact that the practice must not have been due to error in the construction or application of a doubtful or difficult question of law is a distinct requirement.

The implementation of the COLA under Wage Order No. RBIII-10 across the board, which only lasted for less than a year, cannot be considered as having been practiced "over a long period of time." While it is true that jurisprudence has not laid down any rule requiring a specific minimum number of years in order for a practice to be considered as a voluntary act of the employer, under existing jurisprudence on this matter, an act carried out within less than a year would certainly not qualify as such. Hence, the withdrawal of the COLA Wage Order No. RBIII-10 from the salaries of non-minimum wage earners did not amount to a "diminution of benefits" under the law.

There is also no basis in enjoining petitioner to implement Wage Order No. RBIII-11 across the board. Similarly, no proof was presented showing that the implementation of wage orders across the board has ripened into a company practice. In the same way that we required petitioner to prove the existence of a company practice when it alleged the same as defense, at this instance, we also require respondent to show proof of the company practice as it is now the party claiming its existence. Absent any proof of specific, repetitive conduct that might constitute evidence of the practice, we cannot give credence to respondent’s claim. The isolated act of implementing a wage order across the board can hardly be considered a company practice,71 more so when such implementation was erroneously made.

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The CA Decision September 30, 2008 and Resolution dated December 4, 2008 are AFFIRMED with MODIFICATION that the order for petitioner to continue implementing Wage Order No. RBIII-10 and 11 across the board is SET ASIDE. Accordingly, item 10 of the NLRC Decision dated March 30, 2007 is modified to read "dismiss the claim for implementation of Wage Order Nos. RBIII-10 and 11 to the employees who are not minimum wage earners."

SO ORDERED.

A.M. No. 02-2-10-SC December 14, 2005

RE: REQUEST OF MUSLIM EMPLOYEES IN THE DIFFERENT COURTS IN ILIGAN CITY (RE: OFFICE HOURS)

R E S O L U T I O N

CALLEJO, SR., J.:

In their Letter dated November 19, 2001 addressed to Executive Judge Valerio M. Salazar, Regional Trial Court of Iligan City, several Muslim employees in the different courts in the said city request that they be allowed to enjoy the following privileges:

1. to hold office hours from 7:30 a.m. to 3:30 p.m. without lunch break or coffee breaks during the month of Ramadan;

2. to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday (Muslim Prayer Day) during the entire calendar year.

Judge Salazar forwarded the said letter-request to the Office of the Court Administrator (OCA). Judge Salazar expressed his conformity with the first request, i.e., allowing them to hold office from 7:30 a.m. to 3:30 p.m. without any break during the month of Ramadan. However, he expressed some misgivings about the second request, i.e., excusing them from work from 10:00 a.m. to 2:00 p.m. every Friday during the entire calendar year.

In support of their requests, the Muslim employees invoke Presidential Decree (P.D.) No. 2911 as amended by P.D. No. 3222 enacted by then President Ferdinand E. Marcos. The avowed purpose of P.D. No. 291 was to reinforce national unity by recognizing Muslim holidays and making them part of our national holidays. Section 2 thereof, as amended by P.D. No. 322, provides that the following are recognized Muslim holidays:

a. Eid-ul-Fitr (Hariraya Puasa) - which falls on the 1st day of the lunar month of Shawwal commemorating the end of the fasting season;

b. Eid-ul-Adha (Hariraya Haj) - which falls on the 10th day of the 12th Lunar month of Zul Hajj;

c. Mauledan Nabi - Birthday of Prophet Mohammad (P.B.U.H), which falls on the 12th day of the 3rd Lunar month of Rabbiol-Awwal;

d. Lailatul Isra Wal Miraj - (Ascension) which falls on the 27th day of the 8th Lunar month of Rajjab;

e. Muharram (Ashura) - which falls on the 10th Lunar month of Muharram; and

f. Amon Jaded (New Year) - which falls on the 1st day of the 1st Lunar month of Muharram.

Muslims employees in the government are excused from reporting to office during these holidays in order that they may be able to properly observe them.

Section 3 of the same law, as amended by P.D. No. 322, further provides that:

Sec. 3. (a) During the fasting season on the month of Ramadan, all Muslim employees in the national government, government-owned or controlled corporations, provinces, cities, municipalities and other instrumentalities shall observe office hours from seven-thirty in the morning (7:30 a.m.) to three-thirty in the afternoon (3:30 p.m.) without lunch break or coffee breaks, and that there shall be no diminution of salary or wages, provided, that the employee who is not fasting is not entitled to the benefit of this provision.

(b) Regulations for the implementation of this section shall be issued together with the implementing directives on Muslim holidays.

Pursuant thereto, the Civil Service Commission (CSC) promulgated Resolution No. 81-1277 dated November 13, 1981 which states in part:

2. During "Ramadan" the Fasting month (30 days) of the Muslims, the Civil Service official time of 8 o’clock to 12 o’clock and 1 o’clock to 5 o’clock is hereby modified to 7:30 A.M. to 3:30 P.M. without noon break and the difference of 2 hours is not counted as undertime;

3. During Friday, the Muslim pray day, Muslims are excused from work from 10 o’clock in the morning to 2 o’clock in the afternoon.

Moreover, in its Resolution No. 00-0227 dated January 26, 2000, the CSC clarified that the term "Friday" in the above resolution is not limited to the Fridays during the month of Ramadan, but refers to "all Fridays of the calendar year." However, in order not to run afoul of Section 5,3 Rule XVII of the Omnibus Rules Implementing Book V of Executive Order (E.O.) No. 2924 which enjoins civil servants to render public service not less than eight hours a day or forty (40) hours a week, the CSC prescribes the adoption of a flexible working schedule to accommodate the Muslims’ Friday Prayer Day subject to certain conditions, e.g., the flexible working hours shall not start earlier than 7:00 a.m. and end not later than 7:00 p.m.5

In the Resolution dated October 1, 2002, the Court required the Court Administrator to study the matter. In compliance therewith, Court Administrator Presbitero J. Velasco, Jr. recommends that the Muslim employees in the Judiciary be allowed to hold flexible office hours from 7:30 a.m. to 3:30 p.m. without break during the month of Ramadan. Further, that they be excused from work from 10:00 a.m. to 2:00 p.m. every Friday to allow them to attend the Muslim Prayer Day. However, to compensate for the lost hours, they should be required to observe flexible working schedule which should start from 7:00 a.m. to 10:00 a.m. and from 2:00 p.m. to 7:00 p.m. every Friday. In that way, the working hours mandated by the civil service rules is complied with.

The recommendation of the Court Administrator with respect to the matter of allowing the Muslim employees in the Judiciary to hold flexible office hours from 7:30 a.m. to 3:30 p.m. without break during the month of Ramadan is well taken. The same has statutory basis in Section 3 (a) of P.D. No. 291, as amended by P.D. No. 322, which categorically states that "[d]uring the fasting season in the month of Ramadan, all Muslim employees in the national government, government-owned or controlled corporations, provinces, cities, municipalities and other instrumentalities shall observe office hours from seven-thirty in the morning (7:30 a.m.) to three-thirty in the afternoon (3:30 p.m.) without lunch break or coffee breaks, and that there shall be no diminution of salary or wages ..."

The Court, however, is constrained to deny for lack of statutory basis the request of the Muslim employees to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday to allow them to attend the Muslim Prayer Day. As correctly observed by Atty. Edna Diño, Chief, Office of the Court Attorney, in her Report dated May 13, 2005, the CSC

exceeded its authority insofar as it declared in Resolution No. 81-1277 and Resolution No. 00-0227 that Muslim employees are excused from work from 10:00 a.m. to 2:00 p.m. every Friday subject to certain conditions. CSC Resolution No. 81-1277 was purportedly issued pursuant to Sections 2 and 5 of P.D. No. 291, as amended by P.D. No 322, but neither of the two decrees mention "Friday, the Muslim Prayer Day" as one of the recognized holidays.

The Court is not unmindful that the subject requests are grounded on Section 5, Article III of the Constitution:

No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof. The exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be allowed. No religious test shall be required for the exercise of civil and political rights.

This provision contains two aspects: (1) the non-establishment clause; and (2) the free exercise clause. The subject requests are based on the latter and in interpreting this clause (the free exercise clause) embodied in the Constitution, the Court has consistently adhered to the doctrine that:

The right to religious profession and worship has a two-fold aspect, viz., freedom to believe and freedom to act on one’s beliefs. The first is absolute as long as the belief is confined within the realm of thought. The second is subject to regulation where the belief is translated into external acts that affect the public welfare.6

Justice Isagani A. Cruz explained these two concepts in this wise:

(1) Freedom to Believe

The individual is free to believe (or disbelieve) as he pleases concerning the hereafter. He may indulge his own theories about life and death; worship any god he chooses, or none at all; embrace or reject any religion; acknowledge the divinity of God or of any being that appeals to his reverence; recognize or deny the immortality of his soul – in fact, cherish any religious conviction as he and he alone sees fit. However absurd his beliefs may be to others, even if they be hostile and heretical to the majority, he has full freedom to believe as he pleases. He may not be required to prove his beliefs. He may not be punished for his inability to do so. Religion, after all, is a matter of faith. "Men may believe what they cannot prove." Every one has a right to his beliefs and he may not be called to account because he cannot prove what he believes.

(2) Freedom to Act on One’s Beliefs

But where the individual externalizes his beliefs in acts or omissions that affect the public, his freedom to do so becomes subject to the authority of the State. As great as this liberty may be, religious freedom, like all other rights guaranteed in the Constitution, can be enjoyed only with a proper regard for the rights of others. It is error to think that the mere invocation of religious freedom will stalemate the State and render it impotent in protecting the general welfare. The inherent police power can be exercised to prevent religious practices inimical to society. And this is true even if such practices are pursued out of sincere religious conviction and not merely for the purpose of evading the reasonable requirements or prohibitions of the law.

Justice Frankfurter put it succinctly: The constitutional provision on religious freedom terminated disabilities, it did not create new privileges. It gave religious liberty, not civil immunity. Its essence is freedom from conformity to religious dogma, not freedom from conformity to law because of religious dogma.7

The Court recognizes that the observance of Ramadan and the Friday Muslim Prayer Day is integral to the Islamic faith. However, while the observance of Ramadan and allowing the Muslim employees in the Judiciary to hold flexible office hours from 7:30 a.m. to 3:30 p.m. without any break during the month of Ramadan finds support in Section 3 (a) of P.D. No. 291, as amended by P.D. No. 322, there is no such basis to excuse them from work from 10:00 a.m. to 2:00 p.m. every Friday, the Muslim Prayer Day, during the entire calendar year.

On the other hand, the need of the State to prescribe government office hours as well as to enforce them uniformly to all civil servants, Christians and Muslims alike, cannot be disregarded. Underlying Section 5,8 Rule XVII of the

Omnibus Rules Implementing Book V of E.O. No. 292 is the interest of the general public to be assured of continuous government service during office hours every Monday through Friday. The said rule enjoins all civil servants, of whatever religious denomination, to render public service of no less than eight hours a day or forty (40) hours a week.

To allow the Muslim employees in the Judiciary to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday (Muslim Prayer Day) during the entire calendar year would mean a diminution of the prescribed government working hours. For then, they would be rendering service twelve (12) hours less than that required by the civil service rules for each month. Further, this would encourage other religious denominations to request for similar treatment.

The performance of religious practices, whether by the Muslim employees or those belonging to other religious denominations, should not prejudice the courts and the public. Indeed, the exercise of religious freedom does not exempt anyone from compliance with reasonable requirements of the law, including civil service laws.

In fine, the remedy of the Muslim employees, with respect to their request to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday during the entire calendar year, is legislative, which is to ask Congress to enact a legislation expressly exempting them from compliance with the prescribed government working hours.

ACCORDINGLY, the Court resolved to:

1. GRANT the request to allow the Muslim employees in the Judiciary to hold office hours from 7:30 a.m. to 3:30 p.m. without break during the month of Ramadan pursuant to Section 3 (a) of Presidential Decree No. 291, as amended by Presidential Decree No. 322; and

2. DENY for lack of legal basis the request that the Muslim employees in the Judiciary be excused from work from 10:00 a.m. to 2:00 p.m. every Friday, the Muslim Prayer Day, during the entire calendar year.

SO ORDERED.

G.R. No. 126383 November 28, 1997

SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA. CONSUELO MACQUILING LEONARDO MARTINEZ, DOMINGO ELA, JR., RODOLFO CALUCIN, JR., PERLA MENDOZA, REX RAPHAEL REYES, ROGELIO BELMONTE, and 375 other EMPLOYEE-UNION MEMBERS, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION, and SAN JUAN DE DIOS HOSPITAL, respondents.

FRANCISCO, J.:

Petitioners, the rank-and-file employee-union officers and members of San Juan De Dios Hospital Employees Association, sent on July 08, 1991, a "four (4)-page letter with attached support signatures . . . requesting and pleading for the expeditious implementation and payment by respondent" Juan De Dios Hospital "of the '40-HOURS/5-DAY WORKWEEK' with compensable weekly two (2) days off provided for by Republic Act 5901 as clarified for enforcement by the Secretary of Labor's Policy Instructions No. 54 dated April 12, 1988." 1 Respondent hospital failed to give a favorable response; thus, petitioners filed a complaint regarding their "claims for statutory benefits under the above-cited law and policy issuance" 2, docketed as NLRC NCR Case No. 00-08-04815-19. On February 26, 1992, the Labor Arbiter 3 dismissed the complaint. Petitioners appealed before public respondent National Labor Relations Commission 4 (NLRC), docketed as NLRC NCR CA 003028-92, which affirmed the Labor Arbiter's decision. Petitioners' subsequent motion for reconsideration was denied; hence, this petition under Rule 65 of the Rules of Court ascribing grave abuse of discretion on the part of NLRC in concluding that Policy Instructions No. 54 "proceeds from a wrong interpretation of RA 5901" 5 and Article 83 of the Labor Code.

As the Court sees it, the core issue is whether Policy Instructions No. 54 issued by then Labor Secretary (now Senator) Franklin M. Drilon is valid or not.

The policy instruction in question provides in full as follows:

Policy Instruction No. 54

To: All Concerned

Subject: Working Hours and Compensation of Hospital/Clinic Personnel

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

Republic Act 5901 took effect on 21 June 1969 prescribes a 40-hour/5 day work week for hospital/clinic personnel. At the same time, the Act prohibits the diminution of the compensation of these workers who would suffer a reduction in their weekly wage by reason of the shortened workweek prescribed by the Act. In effect, RA 5901 requires that the covered hospital workers who used to work seven (7) days a week should be paid for such number of days for working only 5 days or 40 hours a week.

The evident intention of RA 5901 is to reduce the number of hospital personnel, considering the nature of their work, and at the same time guarantee the payment to them of a full weekly wage for seven (7) days. This is quite clear in the Exemplary Note of RA 5901 which states:

As compared with the other employees and laborers, these hospital and health clinic personnel are over-worked despite the fact that their duties are more delicate in nature. If we offer them better working conditions, it is believed that the "brain drain", that our country suffers nowadays as far as these personnel are concerned will be considerably lessened. The fact that these hospitals and health clinics personnel perform duties which are directly concerned with the health and lives of our people does not mean that they should work for a longer period than most employees and laborers. They are also entitled to as much rest as other workers. Making them work longer than is necessary may endanger, rather than protect the health of their patients. Besides, they are not receiving better pay than the other workers. Therefore, it is just and fair that they may be made to enjoy the privileges of equal working hours with other workers except those excepted by law. (Sixth Congress of the Republic of the Philippines, Third Session, House of Representatives, H. No. 16630)

The Labor Code in its Article 83 adopts and incorporates the basic provisions of RA 5901 and retains its spirit and intent which is to shorten the workweek of covered hospital personnel and at the same time assure them of a full weekly wage.

Consistent with such spirit and intent, it is the position of the Department that personnel in subject hospital and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-day workweek in any given workweek.

All enforcement and adjudicatory agencies of this Department shall be guided by this issuance in the disposition of cases involving the personnel of covered hospitals and clinics.

Done in the City of Manila, this 12th day of April, 1988.

(Emphasis Added)

We note that Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901, otherwise known as "An Act Prescribing Forty Hours A Week Of Labor For Government and Private Hospitals Or Clinic Personnel", enacted on June 21, 1969. Reliance on Republic Act No. 5901, however, is misplaced for the said statute, as correctly ruled by respondent NLRC, has long been repealed with the passage of the Labor Code on May 1, 1974, Article 302 of which explicitly provides: "All labor laws not adopted as part of this Code either directly or by reference are hereby repealed. All provisions of existing laws, orders, decree, rules and regulations inconsistent herewith are likewise repealed." Accordingly, only Article 83 of the Labor Code which appears to have substantially incorporated or reproduced the basic provisions of Republic Act No. 5901 may support Policy Instructions No. 54 on which the latter's validity may be gauged. Article 83 of the Labor Code states:

Art. 83. Normal Hours of Work. — The normal hours of work of any employee shall not exceed eight (8) hours a day.

Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case they shall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include: resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. (Emphasis supplied)

A cursory reading of Article 83 of the Labor Code betrays petitioners' position that "hospital employees" are entitled to "a full weekly salary with paid two (2) days' off if they have completed the 40-hour/5-day workweek". 6 What Article 83 merely provides are: (1) the regular office hour of eight hours a day, five days per week for health personnel, and (2) where the exigencies of service require that health personnel work for six days or forty-eight hours then such health personnel shall be entitled to an additional compensation of at least thirty percent of their regular wage for work on the sixth day. There is nothing in the law that supports then Secretary of Labor's assertion that "personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-day workweek in any given workweek". Needless to say, the Secretary of Labor exceeded his authority by including a two days off with pay in contravention of the clear mandate of the statute. Such act the Court shall not countenance. Administrative interpretation of the law, we reiterate, is at best merely advisory, 7 and the Court will not hesitate to strike down an administrative interpretation that deviates from the provision of the statute.

Indeed, even if we were to subscribe with petitioners' erroneous assertion that Republic Act No. 5901 has neither been amended nor repealed by the Labor Code, we nevertheless find Policy Instructions No. 54 invalid. A perusal of Republic Act No. 5901 8 reveals nothing therein that gives two days off with pay for health personnel who complete a 40-hour work or 5-day workweek. In fact, the Explanatory Note of House Bill No. 16630 (later passed into law as Republic Act No. 5901) explicitly states that the bill's sole purpose is to shorten the working hours of health personnel and not to dole out a two days off with pay.

Hence:

The accompanying bill seeks to grant resident physicians, staff nurses, nutritionist, midwives, attendants and other hospital and health clinic personnel of public and private hospitals and clinics, the privilege of enjoying the eight hours a week exclusive of time for lunch granted by law to all government employees and workers except those employed in schools and in courts. At present those hospitals and clinics, work six days a week, 8 hours a day or 48 hours a week.

As compared with the other employees and laborers, these hospital and health clinic personnel are over-worked despite the fact that their duties are more delicate in nature. If we offer them better working conditions, it is believed that the "brain drain", that our country suffers nowadays as far as these personnel are concerned will be considerably lessened. The fact that these hospitals and health clinic personnel perform duties which are directly concerned with the health and lives of our people does not mean that they should work for a

longer period than most employees and laborers. They are also entitled to as much rest as other workers. Making them work longer than is necessary may endanger, rather than protect, the health of their patients. Besides, they are not receiving better pay than the other workers. Therefore, it is just and fair that they be made to enjoy the privileges of equal working hours with other workers except those excepted by law.

In the light of the foregoing, approval of this bill is strongly recommended.

Further, petitioners' position is also negated by the very rules and regulations promulgated by the Bureau of Labor Standards which implement Republic Act No. 5901. Pertinent portions of the implementing rules provide:

RULES AND REGULATIONS IMPLEMENTINGREPUBLIC ACT NO. 5901

By virtue of Section 79 of the Revised Administrative Code, as modified by section 18 of Implementation Report for Reorganization Plan No. 20-A on Labor, vesting in the Bureau of Labor Standards the authority to promulgate rules and regulations to implement wage and hour laws, the following rules and regulations to are hereby issued for the implementation of Republic Act No. 5901.

CHAPTER I — Coverage

Sec. 1. General Statement on Coverage. Republic Act No. 5901, hereinafter referred to as the Act, shall apply to:

(a) All hospitals and clinics, including those with a bed capacity of less than one hundred, which are situated in cities or municipalities with a population of one million or more; and to

(b) All hospitals and clinics with a bed capacity of at least one hundred, irrespective of the size of population of the city or municipality where they may be situated.

xxx xxx xxx

Sec. 7. Regular Working Day. The regular working days of covered employees shall be not more than five days in a workweek. The workweek may begin at any hour and on any day, including Saturday or Sunday, designated by the employer.

Employers are not precluded from changing the time at which the workday or workweek begins, provided that the change is not intended to evade the requirements of these regulations on the payment of additional compensation.

xxx xxx xxx

Sec. 15. Additional Pay Under the Act and C.A. No. 444. (a) Employees of covered hospitals and clinics who are entitled to the benefits provided under the Eight-Hour Labor Law, as amended, shall be paid an additional compensation equivalent to their regular rate plus at least twenty-five percent thereof for work performed on Sunday and Holidays, not exceeding eight hours, such employees shall be entitled to an additional compensation of at least 25% of their regular rate.

(b) For work performed in excess of forty hours a week, excluding those rendered in excess of eight hours a day during the week, employees covered by the Eight-Hour Labor Law shall

be entitled to an additional straight-time pay which must be equivalent at least to their regular rate.

If petitioners are entitled to two days off with pay, then there appears to be no sense at all why Section 15 of the implementing rules grants additional compensation equivalent to the regular rate plus at least twenty-five percent thereof for work performed on Sunday to health personnel, or an "additional straight-time pay which must be equivalent at least to the regular rate" "[f]or work performed in excess of forty hours a week. . . . Policy Instructions No. 54 to our mind unduly extended the statute. The Secretary of Labor moreover erred in invoking the "spirit and intent" of Republic Act No. 5901 and Article 83 of the Labor Code for it is an elementary rule 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. 9 No additions or revisions may be permitted. Policy Instructions No. 54 being inconsistent with and repugnant to the provision of Article 83 of the Labor Code, as well as to Republic Act No. 5901, should be, as it is hereby, declared void.

WHEREFORE, the decision appealed from is AFFIRMED. No costs.

SO ORDERED.

G.R. No. 169464 August 31, 2006

ROQUE D.A. DATOR, Petitioner,vs.UNIVERSITY OF SANTO TOMAS, REV. FR. TAMERLANE LANA and REV. FR. RODEL ALIGAN, Respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review on certiorari 1 assails the April 27, 2005 Decision 2 of the Court of Appeals in CA-G.R. SP No. 81378, which reversed the August 29, 2003 Decision 3 and October 30, 2003 Resolution 4 of the National Labor Relations Commission (NLRC) in NLRC CA No. 034433-03 and dismissed petitioner’s complaint for lack of merit; and its August 24, 2005 Resolution 5 denying petitioner’s motion for reconsideration.

Petitioner Roque D.A. Dator was hired by respondent University of Santo Tomas (UST) in June 1983 as Instructor I of the Institute of Religion with a maximum teaching load of 24 units. On December 15, 1995, petitioner was also hired as Graft Investigation Officer II with the Office of the Ombudsman but he failed to disclose such other employment to respondents, who discovered the same only during the first semester of School Year 2000-2001.

Thus, on June 16, 2000, petitioner was informed that his teaching load would be reduced to 12 hours per week, pursuant to Section 5, Article III of the UST Faculty Code which states that "faculty members who have a full time outside employment other than teaching may not be given a teaching load in excess of 12 hours per week."

Petitioner asked for reconsideration of the reduction in his teaching load which was granted. He was given an additional load of three teaching hours. 6

On June 15, 2001, petitioner again requested for an additional load of three units but his request was denied by respondent Rev. Fr. Aligan on the ground that "[t]o grant the request when one was already made before for humanitarian and equitable reasons would reduce the subject policy to naught and the granting might become the general rather than the exception to the policy." 7

Petitioner filed a Complaint-Affidavit 8 to the Chairperson of the Grievance Committee, Dr. Gil Gamila, President of the University of Sto. Tomas Faculty Union, but the complaint was dismissed. Petitioner appealed to respondent Rev. Fr. Tamerlane Lana, Rector of respondent UST 9 but the appeal was denied. 10

Petitioner thus filed a complaint for Illegal Reduction of Teaching Load and Illegal Change of Employment Status, Damages, Unpaid Benefits and Attorney’s Fees and illegal constructive dismissal before the Labor Arbiter on February 19, 2002.

Petitioner claimed that his arbitrary demotion from full-time to part-time faculty member violated the provisions of the CBA, as well as his right to security of tenure. Likewise, he argued that the UST Faculty Code which respondents relied upon to reduce his teaching load has been superseded by the CBA. In support of his contentions, petitioner cited the following sections of Article IV of the CBA:

Section 3. Normal Teaching Load. – Every faculty member with a permanent appointment shall be entitled to no less than the same teaching load or assignment as he had in the previous semesters, excluding the overloads and substitute load except in justified deloading as herein provided.

x x x x

Section 5. Reduction of Teaching Load. – The teaching load of a faculty member may be reduced for any of the following reasons:

a) A reduction in the number of classes or sections in the faculty, college, school or department concerned, provided that, in such case a compensating load in other faculties, colleges, school or department shall, as far as possible, be made available to the faculty member concerned;

b) Non-offering of his/her specialized subject along his/her expertise in any given semester or school year;

c) By way of sanction for inefficiency duly proven after due process and in accordance with standards or criteria in force in the UNIVERSITY;

d) Failing Health of the faculty member duly certified by a Board of three (3) physicians teaching in the Faculty of Medicine and Surgery of the University chosen as follows: one by the faculty member concerned, one by the UNIVERSITY and one by the FACULTY UNION.

Section 6. Procedure for the Reduction of Load. – In case of deloading that affects permanent faculty members, the following rules shall be observed, to wit:

a) The available subject shall first be given to the faculty members who have been teaching the particular subject;

b) Seniority as to the number of years of handling the particular subject shall be used as basis in the distribution of the available particular subject;

c) In case the faculty member concerned shall have taught the particular subject for an equal length of time priority shall be given to the faculty member having a higher rank;

d) In case the faculty member concerned shall have taught the particular subject for an equal length of time and holding the same rank, preference shall be given to the faculty member who has a higher efficiency rating;

e) In case the matter cannot be settled by the use of the foregoing data, the particular available subjects shall be distributed to the faculty members concerned in proportion to the faculty members’ average teaching assignment in the immediately preceding school year.

In the case of non-tenured faculty members, priority in the distribution of available subjects among them in the event of a bona-fide deloading shall be in accordance with the following criteria that are to be applied in the order of mention to wit:

a) length of service;

b) number of semesters of handling the particular subject; and

c) efficiency rating.

Section 7. Notice of deloading. Faculty members who shall be affected by a process of deloading should be given a written notice thereof, at least two (2) weekes before the start of every semester; conversely, faculty members who, for one reason or another, are not available to teach for the succeeding semester, should inform the dean of such fact at least two (2) weeks before the start of the semester.

On the other hand, respondents maintained that petitioner’s teaching load was reduced in accordance with Sections 5 and 6 of Article III of the Faculty Code which provide:

SEC. 5 – Faculty members who have a full time outside employment other than teaching may not be given a teaching load in excess of 12 hours per week. The maximum load of part time employees should be arranged in accordance with the following table:

Hours of Weekly Work Load

40-48 12 Units

30-39 15 Units

20-29 18 Units

10-19 21 Units

SEC. 6 – All faculty members shall submit each semester in writing to their respective Deans a statement of the number of teaching hours per week to be rendered in other institutions and/or daily hours of work or employment, inside or outside the University.

The Labor Arbiter ruled in favor of respondents holding that the situation contemplated in Section 5, Article III of the Faculty Code, when evaluated together with the provisions of the CBA, constitutes a ground for teaching load reduction. 11

On appeal, the NLRC ordered the restoration of petitioner’s faculty member status to full-time. Respondents’ motion for reconsideration was denied. Petitioner’s partial motion for reconsideration with regard to the award for backwages and damages was likewise denied.

Respondents filed a petition for certiorari before the Court of Appeals which reversed the NLRC decision and sustained the findings of the Labor Arbiter in its assailed Decision dated April 27, 2005, the dispositive portion of which states:

WHEREFORE, premises considered, we hereby GRANT the petition. The decision dated August 29, 2003 and the order dated October 30, 2003 of the National Labor Relations Commission in the case "Roque A. Dator vs. University of Sto. Tomas and/or Rev. Tamerlane Lana, NLRC CA No. 034433-03" is hereby declared NULL AND VOID and is accordingly SET ASIDE. The complaint is hereby DISMISSED for lack of merit.

SO ORDERED. 12

The Court of Appeals denied petitioner’s motion for reconsideration. Hence, this petition raising the following issues:

THE APPELLATE COURT GROSSLY DEPARTED FROM

APPLICABLE LAW AND PREVAILING JURISPRUDENCE

I

IN NOT FINDING [THAT] PETITIONER’S DELOADING WAS WITHOUT JUST CAUSE, WITHOUT DUE PROCESS AND IN VIOLATION OF AN EXTANT CBA BETWEEN UST AND THE UST FACULTY UNION

II

IN ITS FLAWED INTERPRETATION OF THE APPLICABLE PROVISIONS OF THE CBA AND THE UST FACULTY CODE

III

IN FINDING [THAT] PETITIONER HAD COMMITTED MISREPRESENTATION

IV

IN FINDING THAT PETITIONER HAD THE BURDEN OF PROOF IN SHOWING THAT OTHER FACULTY MEMBERS SIMILARLY SITUATED WERE GIVEN FULL-TIME LOADS

V

IN FAILING TO SEE THAT RESPONDENT UST HAD ALREADY ADMITTED IN ITS PLEADINGS THAT OTHER GOVERNMENT EMPLOYEES HAD BEEN GRANTED FULL-TIME TEACHING LOADS

VI

IN FAILING TO FIND [THAT] UST HAD ACTED IN BAD FAITH. 13

Petitioner contends that he is a tenured faculty member thus he is entitled to the same teaching load as he had in the previous semesters; that he was not accorded due process when respondents unilaterally reduced his teaching load; that Section 5, Article III of the Faculty Code has no application in this case; and that respondents acted in bad faith.

Respondents maintain that petitioner’s teaching load was reduced in accordance with Section 5, Article III of the Faculty Code; that they did not violate petitioner’s right to due process and that he was given an opportunity to be heard; that petitioner falsified at least 13 written statements where he deliberately failed to mention his full time employment with the Office of the Ombudsman.

The petition lacks merit.

The issues for resolution are: 1) whether the reduction of petitioner’s teaching load was justified; and 2) whether petitioner was denied due process.

We agree with the Court of Appeals’ ruling that while the CBA provides grounds for reduction of teaching load, the question of whether a faculty member is considered full-time or part-time is addressed by the Faculty Code which provides that where the full-time faculty member is at the same time working as a full-time employee elsewhere, the faculty member is considered part-time and a 12-hour teaching load limitation is imposed.

There is no dispute that petitioner was holding a full-time position with the Office of the Ombudsman while working as a faculty member in UST. Accordingly, Section 5, Article III of the Faculty Code applies. We quote with approval the ruling of the Court of Appeals, to wit:

We completely disagree with the NLRC’s conclusions as it applied the wrong rules and misappreciated the evidence on record. The NLRC gravely abused its discretion on this point for its complete disregard of the Faculty Code.

While the NLRC correctly viewed the CBA as the primary instrument that governs the relationship between UST and its unionized faculty members, it disregarded Article XX of this CBA which reconciles the CBA with the Faculty Code. Article XX states:

"ARTICLE XX

FACULTY CODE

The provisions of the Faculty Code of 1981, as amended, which are not otherwise incorporated in the CBA and which are not in conflict with any provisions of the latter shall remain in full force and effect.

In the event of conflict between a faculty code provision and the CBA, the provision of the latter shall prevail." (Emphasis supplied)

Thus, contrary to the NLRC’s conclusion, the UST Faculty Code continues to exist and to apply to UST faculty members, but must give way if its terms are in conflict with what the CBA provides. The standard in determining the applicable rule – and the one that the NLRC completely missed – is whether a conflict exists between the provisions the parties cited.

We see no conflict between the provisions the parties respectively cited as these provisions apply to different situations. Article IV of the CBA are the rules on the teaching loads that faculty members may normally expect to carry; it provides as well the grounds or reasons for giving a tenured faculty member less than his normal teaching load. These provisions do not address the question of when a faculty member is to be considered a full-time or a part-time faculty member. Whether a faculty member should only be on part-time basis is governed by Section 5 Article III of the UST Faculty Code we have quoted above. Thus, the provisions Dator cited regarding deloading and the authorized grounds therefore do not apply because what is involved is a change of status from full-time faculty member to a part-time one due to the faculty member’s full-time employment elsewhere.

In contrast with the "authorized" causes for deloading under the CBA, the change of status from full-time faculty member with a 24-unit load to a part-time one with a 12-unit load in effect involves a "disqualification" to be a full-time faculty member because of the very practical reason that he or she is already a full-time employee elsewhere. In the present case, this "disqualification" is compounded by Dator’s repeated misrepresentations about his employment status outside UST. The present case therefore is closer to being a disqualification situation coupled with a disciplinary cause, rather than one involving a purely "authorized" deloading under the CBA. 14

Petitioner argues that he was under no obligation to disclose his employment with the Office of the Ombudsman. He claims that the only information required of him pertained to 1) other colleges where he is teaching, 2) teaching loads outside the university, and 3) a business firm he is employed with. He argues that the Office of the Ombudsman, being a government agency, does not fall under any of the foregoing categories. 15

Petitioner’s argument is flimsy and deserves scant consideration.

Section 6, Article III of the Faculty Code states that all faculty members must submit each semester a statement of the number of teaching hours per week to be rendered in other institutions and/or daily hours of work or employment, inside or outside the University. The rationale behind the rule is unmistakable. As pointed out by respondents, there is a need to maintain UST’s quality of education as well as to ensure that government service is not jeopardized. 16

Petitioner admitted in his letter-request dated July 15, 2001 that "with the implementation of a CHED Circular, the teaching load assignment of government employees was limited to only 12 units per semester x x x so as not to prejudice the interests of both the government and the University and/or college concerned." 17 It is clear therefore that petitioner was aware of the limitation.

Moreover, we find that petitioner was not denied due process. It is settled that due process is simply an opportunity to be heard. 18 In this case, respondents informed petitioner that his teaching load would be reduced as he was working full-time with the Office of the Ombudsman. Petitioner asked for reconsideration twice. His first request was granted and he was given an additional load of three units for School Year 2000-2001. For School Year 2001-2002, petitioner again requested an additional load of three units but was denied.

Upon denial of his second request, petitioner availed of the grievance procedure provided in the CBA. 19 Yet again, after his complaint was dismissed, petitioner appealed directly to respondent Fr. Lana. As observed by the Court of Appeals, petitioner exhausted the internal mechanism of seeking redress within UST’s administrative machinery. 20 Contrary to petitioner’s claims, he was accorded due process.

We likewise reject petitioner’s claim that respondents acted in bad faith. A review of the record reveals that respondents merely implemented the Faculty Code which clearly sets a 12-hour load limitation to faculty members who are also full-time employees elsewhere. And while petitioner decries an alleged discrimination against him, he failed to prove his allegations with substantial evidence which is that amount of evidence a reasonable mind might accept as adequate to support a conclusion. 21

All told, petitioner’s complaint cannot be sustained. An employee’s bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence. 22 As aptly held by the Court of Appeals:

A constructive dismissal occurs when the law deems that there is effectively a termination of employment or "a quitting because continued employment is rendered impossible, unreasonable or unlikely, such as in an offer involving a demotion in rank and a diminution in pay." Where, as in the present case, the employer was fully justified in giving a faculty member a lesser load because the latter is disqualified under applicable rules from handling a full load, and where the faculty member committed repeated misrepresentations in his bid to maintain his full load, we cannot see any legal or factual basis to conclude that the faculty member had been constructively dismissed.

We conclude from all these that UST committed no illegality when it ordered the reduction of Dator’s load from twenty-four (24) units to twelve (12) units per semester. Substantively, there was factual basis for deloading. Procedurally, Dator had been given full opportunity to be heard. He was even accommodated for one school year with an extra three-unit load that he accepted. After this acceptance and the express recognition that indeed he could only handle a twelve-unit load, private respondent Dator can no longer claim that he should after all been given a full twenty-four unit load. Thus, the NLRC"s conclusions - based on a skewed reading of the facts and the application of the wrong rules - cannot but be attended by grave abuse of discretion amounting to lack or excess of jurisdiction. 23

WHEREFORE, the instant petition is DENIED. The Decision dated April 27, 2005 of the Court of Appeals in CA-G.R. SP No. 81378 ordering the dismissal of petitioner’s complaint for lack of merit; and its Resolution dated August 24, 2005 denying petitioner’s motion for reconsideration, are hereby AFFIRMED.

SO ORDERED.

[G.R. No. 172029, August 06, 2008]

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 certiorari[1] of the Decision[2] of the Court of Appeals (CA) partly setting aside the Order[3] 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. 15-65[4] on the payment of additional charges for pilotage service[5] 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:

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. 1486[7]

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.

RESOLUTION NO. 1541[8]

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."

RESOLUTION NO. 1554[9]

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 opposed[15] the motion.

On September 25, 2003, the RTC issued an Order[16] 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 certiorari[19] 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.

G.R. No. 111359 August 15, 1995

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

1. Hourly Rate= (X + 100% X)

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) ]

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

D. Excess of 40 Hours within a Calendar Week

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

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

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

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) ]

E. Sunday as a Normal Work Day

1. Hourly Rate= (X + 100% X)

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

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) ]

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

F. Sunday as day off

1. Hourly Rate= (X + 100% X)

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

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) ]

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

G. Holiday as Normal Work Day

1. Hourly Rate= (X + 150% X)

2. OT Hourly Rate= (X + 150% X) + 50% (X + 150% X)

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

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

H. Holiday as Day Off

1. Hourly Rate= (X + 150% X)

2. OT Hourly Rate= (X + 150% X) + 50% (X + 150% X)

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.

LEYTE IV ELECTRIC COOPERATIVE, INC., petitioner versus LEYECO IV EMPLOYEES UNION-ALU,respondent.

GR No. 157775 October 19, 2007

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the

Resolution dated September 4, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 72336 which dismissed outright

petitioner's Petition for Certiorari for adopting a wrong mode of appeal and the CA Resolution dated February 28,

2003 which denied petitioner's Motion for Reconsideration.

The facts:

On April 6, 1998, Leyte IV Electric Cooperative, Inc. (petitioner) and Leyeco IV Employees Union-ALU

(respondent) entered into a Collective Bargaining Agreement (CBA) covering petitioner rank-and-file employees, for a

period of five (5) years effective January 1, 1998.

On June 7, 2000, respondent, through its Regional Vice-President, Vicente P. Casilan, sent a letter to

petitioner demanding holiday pay for all employees, as provided for in the CBA.

On June 20, 2000, petitioner, through its legal counsel, sent a letter-reply to Casilan, explaining that after

perusing all available pay slips, it found that it had paid all employees all the holiday pays enumerated in the CBA.

After exhausting the procedures of the grievance machinery, the parties agreed to submit the issues of

the interpretation and implementation of Section 2, Article VIII of the CBA on the payment of holiday pay, for

arbitration of the National Conciliation and Mediation Board (NCMB), Regional Office No. VIII in Tacloban City. The

parties were required to submit their respective position papers, after which the dispute was submitted for decision.

While admitting in its Position Paper that the employees were paid all of the days of the month even if

there was no work, respondent alleged that it is not prevented from making separate demands for the payment of

regular holidays concomitant with the provisions of the CBA, with its supporting documents consisting of a letter

demanding payment of holiday pay, petitioner's reply thereto and respondent's rejoinder, a computation in the amount

of P1,054,393.07 for the unpaid legal holidays, and several pay slips.

Petitioner, on the other hand, in its Position Paper, insisted payment of the holiday pay in compliance

with the CBA provisions, stating that payment was presumed since the formula used in determining the daily rate of

pay of the covered employees is Basic Monthly Salary divided by 30 days or Basic Monthly Salary multiplied by 12

divided by 360 days, thus with said formula, the employees are already paid their regular and special days, the days

when no work is done, the 51 un-worked Sundays and the 51 un-worked Saturdays.

On March 1, 2001, Voluntary Arbitrator Antonio C. Lopez, Jr. rendered a Decision in favor of respondent,

holding petitioner liable for payment of unpaid holidays from 1998 to 2000 in the sum of P1,054,393.07. He reasoned

that petitioner miserably failed to show that it complied with the CBA mandate that holiday pay be “reflected during

any payroll period of occurrence” since the payroll slips did not reflect any payment of the paid holidays. He found

unacceptable not only petitioner's presumption of payment of holiday pay based on a formula used in determining and

computing the daily rate of each covered employee, but also petitioner's further submission that the rate of its

employees is not less than the statutory minimum wage multiplied by 365 days and divided by twelve.

On April 11, 2001, petitioner filed a Motion for Reconsideration but it was denied by the Voluntary

Arbitrator in a Resolution dated June 17, 2002. Petitioner received said Resolution on June 27, 2002.

Thirty days later, or on July 27, 2002, petitioner filed a Petition for Certiorari in the CA, ascribing grave

abuse of discretion amounting to lack of jurisdiction to the Voluntary Arbitrator: (a) for ignoring that in said company

the divisor for computing the applicable daily rate of rank-and-file employees is 360 days which already includes

payment of 13 un-worked regular holidays under Section 2, Article VIII of the CBA; and (b) for holding the petitioner

liable for the unpaid holidays just because the payroll slips submitted as evidence did not show any payment for the

regular holidays.

In a Resolution dated September 4, 2002, the CA dismissed outright petitioner's Petition for Certiorari for

adopting a wrong mode of appeal. It reasoned:

Considering that what is assailed in the present recourse is a Decision of a Voluntary Arbitrator, the proper remedy is a petition for review under Rule 43 of the 1997 Rules of Civil Procedure; hence, the present petition for certiorari under Rule 65 filed on August 15, 2002, should be rejected, as such a petition cannot be a substitute for a lost appeal. And in this case, the period for appeal via a petition for review has already lapsed since the petitioner received a copy of the Resolution denying its motion for reconsideration on June 27, 2002, so that its last day to appeal lapsed on July 12, 2002.

x x x x

Petitioner filed a Motion for Reconsideration but it was denied by the CA in a Resolution dated February

28, 2003.

Hence, the present petition anchored on the following grounds:

(1) The Honorable Court of Appeals erred in rejecting the petition for certiorari under Rule

65 of the Rules of Court filed by herein petitioner to assail the Decision of the Voluntary Arbitrator.

(2) Even if decisions of voluntary arbitrator or panel of voluntary arbitrators are appealable

to the Honorable Court of Appeals under Rule 43, a petition for certiorari under Rule 65 is still available if it is grounded on grave abuse of discretion. Hence, the

Honorable Court of Appeals erred in rejecting the petition for certiorari under Rule 65 of the Rules of Court filed by herein petitioner.

(3) The Honorable Court of Appeals erred in refusing to rule on the legal issue presented by

herein petitioner in the petition for certiorari that it had filed and in putting emphasis instead on a technicality of procedure. The legal issues needs a clear-cut ruling by this Honorable Court for the guidance of herein petitioner and private respondent.

Petitioner contends that Rule 65 of the Rules of Court is the applicable mode of appeal to the CA from

judgments issued by a voluntary arbitrator since Rule 43 only allows appeal from judgments of particular quasi-judicial

agencies and voluntary arbitrators authorized by law and not those judgments and orders issued under the Labor

Code; that the petition before the CA did not raise issues of fact but was founded on jurisdictional issues and,

therefore, reviewable through a special civil action for certiorari under Rule 65; that technicalities of law and

procedure should not be utilized to subvert the ends of substantial justice.

In its Comment, respondent avers that Luzon Development Bank v. Association of Luzon Development

Bank Employees laid down the prevailing rule that judgments of the Voluntary Arbitrator are appealable to the CA

under Section 1, Rule 43 of the Rules of Court; that having failed to file the appropriate remedy due to the lapse of the

appeal period, petitioner cannot simply invoke Rule 65 for its own convenience, as an alternative remedy.

In its Reply, petitioner submits that the ruling in Luzon Development Bank does not expressly exclude the

filing of a petition for certiorari under Rule 65 of the Rules of Court to assail a decision of a voluntary arbitrator. It

reiterates that technicalities of law and procedure should not be utilized to subvert the ends of substantial justice.

It has long been settled in the landmark case Luzon Development Bank that a voluntary arbitrator, whether

acting solely or in a panel, enjoys in law the status of a quasi-judicial agency; hence, his decisions and awards are

appealable to the CA. This is so because the awards of voluntary arbitrators become final and executory upon the

lapse of the period to appeal; and since their awards determine the rights of parties, their decisions have the same

effect as judgments of a court. Therefore, the proper remedy from an award of a voluntary arbitrator is a petition for

review to the CA, following Revised Administrative Circular No. 1-95, which provided for a uniform procedure for

appellate review of all adjudications of quasi-judicial entities, which is now embodied in Section 1, Rule 43 of the 1997

Rules of Civil Procedure, which reads:

SECTION 1. Scope. — This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. (Emphasis supplied)

Section 2, Rule 43 of the 1997 Rules of Civil Procedure which provides that:

SEC. 2. Cases not covered. - This Rule shall not apply to judgments or final

orders issued under the Labor Code of the Philippines.

did not alter the Court's ruling in Luzon Development Bank. Section 2, Rule 42 of the 1997 Rules of Civil Procedure,

is nothing more than a reiteration of the exception to the exclusive appellate jurisdiction of the CA, as provided for in

Section 9, Batas Pambansa Blg. 129, as amended by Republic Act No. 7902:

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees’ Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The Court took into account this exception in Luzon Development Bank but, nevertheless, held that the

decisions of voluntary arbitrators issued pursuant to the Labor Code do not come within its ambit, thus:

x x x. The fact that [the voluntary arbitrator’s] functions and powers are provided for in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted that, although the Employees’ Compensation Commission is also provided for in the Labor Code, Circular No. 1-91, which is the forerunner of the present Revised Administrative Circular No. 1-95, laid down the procedure for the appealability of its decisions to the Court of Appeals under the foregoing rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated therein.

This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute. Nor will it run counter to the legislative intendment that decisions of the NLRC be reviewable directly by the Supreme Court since, precisely, the cases within the adjudicative competence of the voluntary arbitrator are excluded from the jurisdiction of the NLRC or the labor arbiter.

This ruling has been repeatedly reiterated in subsequent cases and continues to be the controlling

doctrine. Thus, the general rule is that the proper remedy from decisions of voluntary arbitrators is a petition for

review under Rule 43 of the Rules of Court.

Nonetheless, a special civil action for certiorari under Rule 65 of the Rules of Court is the proper remedy

for one who complains that the tribunal, board or officer exercising judicial or quasi-judicial functions acted in total

disregard of evidence material to or decisive of the controversy. As this Court elucidated in Garcia v. National

Labor Relations Commission -

[I]n Ong v. People, we ruled that certiorari can be properly resorted to where the factual findings complained of are not supported by the evidence on record . Earlier, in Gutib v. Court of Appeals, we emphasized thus:

[I]t has been said that a wide breadth of discretion is granted a court of justice in certiorari proceedings. The cases in which certiorari will issue cannot be defined, because to do so would be to destroy its comprehensiveness and usefulness. So wide is the discretion of the court that authority is not wanting to show that certiorari is more discretionary than either prohibition or mandamus. In the exercise of our superintending control over inferior courts, we are to be guided by all the circumstances of each particular case “as the ends of justice may require.” So it is that the writ will be granted where necessary to prevent a substantial wrong or to do substantial justice.

In addition, while the settled rule is that an independent action for certiorari may be availed of only when

there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law and certiorari is not a

substitute for the lapsed remedy of appeal, there are a few significant exceptions when the extraordinary remedy of

certiorari may be resorted to despite the availability of an appeal, namely: (a) when public welfare and the

advancement of public policy dictate; (b) when the broader interests of justice so require; (c) when the writs

issued are null; and (d) when the questioned order amounts to an oppressive exercise of judicial authority.

In this case, while the petition was filed on July 27, 2002, 15 days after July 12, 2002, the expiration of

the 15-day reglementary period for filing an appeal under Rule 43, the broader interests of justice warrant relaxation

of the rules on procedure. Besides, petitioner alleges that the Voluntary Arbitrator’s conclusions have no basis in fact

and in law; hence, the petition should not be dismissed on procedural grounds.

The Voluntary Arbitrator gravely abused its discretion in giving a strict or literal interpretation of the CBA

provisions that the holiday pay be reflected in the payroll slips. Such literal interpretation ignores the admission of

respondent in its Position Paper that the employees were paid all the days of the month even if not worked . In

light of such admission, petitioner's submission of its 360 divisor in the computation of employees’ salaries gains

significance.

In Union of Filipro Employees v. Vivar, Jr. the Court held that “[t]he divisor assumes an important role in

determining whether or not holiday pay is already included in the monthly paid employee’s salary and in the

computation of his daily rate”. This ruling was applied in Wellington Investment and Manufacturing Corporation v.

Trajano, Producers Bank of the Philippines v. National Labor Relations Commission and Odango v. National Labor

Relations Commission, among others.

In Wellington, 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 called the “314 factor”; that is, 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

covered payment for 314 days of the year, including regular and special holidays, as well as days when no work was

done by reason of fortuitous cause, such as transportation strike, riot, or typhoon or other natural calamity, or cause

not attributable to the employees.

In Producers Bank, the employer used the divisor 314 in arriving at the daily wage rate of monthly

salaried employees. The divisor 314 was arrived at by subtracting all Sundays from the total number of calendar

days in a year, since Saturdays are considered paid rest days. The Court held that the use of 314 as a divisor leads

to the inevitable conclusion that the ten legal holidays are already included therein.

In Odango v. National Labor Relations Commission, the Court ruled that the use of a divisor that was

less than 365 days cannot make the employer automatically liable for underpayment of holiday pay. In said case, the

employees were required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable

divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any

divisor below 287 days meant that the employees were deprived of their holiday pay for some or all of the ten legal

holidays. The 304-day divisor used by the employer was clearly above the minimum of 287 days.

In this case, the employees are required to work only from Monday to Friday. Thus, the minimum

allowable divisor is 263, which is arrived at by deducting 51 un-worked Sundays and 51 un-worked Saturdays from

365 days. Considering that petitioner used the 360-day divisor, which is clearly above the minimum, indubitably,

petitioner's employees are being given their holiday pay.

Thus, the Voluntary Arbitrator should not have simply brushed aside petitioner's divisor formula. In

granting respondent's claim of non-payment of holiday pay, a “double burden” was imposed upon petitioner because

it was being made to pay twice for its employees' holiday pay when payment thereof had already been included in the

computation of their monthly salaries. Moreover, it is absurd to grant respondent's claim of non-payment when they

in fact admitted that they were being paid all of the days of the month even if not worked. By granting respondent's

claim, the Voluntary Arbitrator sanctioned unjust enrichment in favor of the respondent and caused unjust financial

burden to the petitioner. Obviously, the Court cannot allow this.

While the Constitution is committed to the policy of social justice and the protection of the working class,

it should not be supposed that every labor dispute would automatically be decided in favor of labor. Management also

has it own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of

concern for those with less privileges in life, this Court has inclined more often than not toward the worker and upheld

his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in

every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.

WHEREFORE, the petition for review is GRANTED. The Resolutions dated September 4, 2002 and February

28, 2003 of the Court of Appeals in CA-G.R. SP No. 72336 are REVERSED and SET ASIDE. The Decision dated

March 1, 2001 and Resolution dated June 17, 2002 of the Voluntary Arbitrator are declared NULL and VOID.

SO ORDERED.