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G.R. No. 124841 July 31, 1998

PEFTOK INTEGRATED SERVICES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and EDUARDO ABUGHO, ET. AL., respondents.

PURISIMA, J.:
Pacta privata juri publico derogare non possunt. Private agreements (between parties) cannot derogate from public
right.
Filed on May 22, 1996, this petition for certiorari under Rule 65 of the Revised Rules of Court seeks to set aside the
decision of the National Labor Relations Commission (NLRC) dismissing the appeal of petitioner. The case
stemmed from the decision handed down by Labor Arbiter Noel Augusto S. Magbanua, disposing, as follows:
WHEREFORE, in view of the foregoing premises, respondents-PEFTOK Security Agency and
Timber Industries of the Philippines, Inc. (TIPI) and Union Plywood Corporation are hereby ordered
to pay, jointly and solidarily the claims of complainants as previously computed, as follows:

1. Eduardo Abugho

49,397.83

2. Clenio Macanoquit

31,596.12

3. Claro Mendez

49,308.83

4. Leovemin Lumban

16,666.45

5. Crispin Balingkit

44,772.34

6. Ulysses Labis

43,812.64

7. Fidel Sabellina

23,666.90

8. Leonardo Daluperi

27,026.59

9. Valentine Adame

17,084.92

10. Gonzalo Ernero

18,018.56

11. Celso Niluag

18,670.00

19,499.28 1

12. Reynaldo Maasin

GRAND TOTAL

P342,598. 52

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

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There is no quibble over the fact that subject decision of the labor arbiter appealed from was received by petitioner
on June 30, 1995. The appeal therefrom should have been interposed within 10 days or not later than July 10, 1995.
But unfortunately for petitioner, its appeal was only filed on July 17, 1995. Indeed, it is decisively clear that
petitioner's appeal is flawed by late filing. The prescribed period for appeal is both mandatory and jurisdictional.
Then, too, the petition under consideration is likewise dismissable on the ground of prematurity. In consonance with
the principle of exhaustion of administrative remedies, it was necessary for a motion for reconsideration of the
decision of the National Labor Relations Commission to be filed in order to give NLRC a chance to correct its
mistakes, if there be any. So also, under Rule 65 of the Revised Rules of Court, petitioner must establish that it has
no plain, speedy and adequate remedy in the ordinary course of law for its perceived grievance. 7
It is decisively clear that they (guards) affixed their signatures to subject waivers and/or quitclaims for fear that they
would not be paid their salaries on pay day or worse, still, their services would be terminated if they did not sign
those papers. In short, there was no voluntariness in the execution of the quitclaim or waivers in question. It should
be borne in mind that in this jurisdiction, quitclaims, waivers or releases are looked upon with disfavor. 8"Necessitous
men are not free men." 9 "They are commonly frowned upon as contrary to public policy and ineffective to bar claims
for the full measure of the workers' legal rights." 10
With respect to the posting of cash or surety bond, the requirement therefor is mandatory. The bond is sine qua
non to the perfection of appeal from the labor arbiter's monetary award. 11 The posting of cash or surety bond is
unconditional" 12 and cannot therefore be trifled with. It is the intendment of the law that employees be assured that
if they finally prevail in the case, they will receive the monetary award granted them. The bond also serves to
discourage employers from using the appeal as a ploy to delay or evade payment of monetary obligations to their
employees.
WHEREFORE, the petition is hereby DISMISSED for lack of merit; the decision of the NLRC dated February 26,
1995 is AFFIRMED and the questioned alias writ of execution UPHELD.
SO ORDERED.
G.R. No. L-53515 February 8, 1989
SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), petitioner,
vs.
HON. BLAS F. OPLE, as Minister of Labor and SAN MIGUEL CORPORATION, respondents.
Lorenzo F. Miravite for petitioner.
Isidro D. Amoroso for New San Miguel Corp. Sales Force Union.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

GRIO-AQUINO, J.:
This is a petition for review of the Order dated February 28, 1980 of the Minister of Labor in Labor Case No. AJML069-79, approving the private respondent's marketing scheme, known as the "Complementary Distribution System"
(CDS) and dismissing the petitioner labor union's complaint for unfair labor practice.
On April 17, 1978, a collective bargaining agreement (effective on May 1, 1978 until January 31, 1981) was entered
into by petitioner San Miguel Corporation Sales Force Union (PTGWO), and the private respondent, San Miguel
Corporation, Section 1, of Article IV of which provided as follows:

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Art. IV, Section 1. Employees within the appropriate bargaining unit shall be entitled to a basic
monthly compensation plus commission based on their respective sales. (p. 6, Annex A; p. 113,
Rollo.)
In September 1979, the company introduced a marketing scheme known as the "Complementary Distribution
System" (CDS) whereby its beer products were offered for sale directly to wholesalers through San Miguel's sales
offices.
The labor union (herein petitioner) filed a complaint for unfair labor practice in the Ministry of Labor, with a notice of
strike on the ground that the CDS was contrary to the existing marketing scheme whereby the Route Salesmen
were assigned specific territories within which to sell their stocks of beer, and wholesalers had to buy beer products
from them, not from the company. It was alleged that the new marketing scheme violates Section 1, Article IV of the
collective bargaining agreement because the introduction of the CDS would reduce the take-home pay of the
salesmen and their truck helpers for the company would be unfairly competing with them.
The complaint filed by the petitioner against the respondent company raised two issues: (1) whether the CDS
violates the collective bargaining agreement, and (2) whether it is an indirect way of busting the union.
In its order of February 28, 1980, the Minister of Labor found:
... We see nothing in the record as to suggest that the unilateral action of the employer in
inaugurating the new sales scheme was designed to discourage union organization or diminish its
influence, but rather it is undisputable that the establishment of such scheme was part of its overall
plan to improve efficiency and economy and at the same time gain profit to the highest. While it may
be admitted that the introduction of new sales plan somewhat disturbed the present set-up, the
change however was too insignificant as to convince this Office to interpret that the innovation
interferred with the worker's right to self-organization.
Petitioner's conjecture that the new plan will sow dissatisfaction from its ranks is already a
prejudgment of the plan's viability and effectiveness. It is like saying that the plan will not work out to
the workers' [benefit] and therefore management must adopt a new system of marketing. But what
the petitioner failed to consider is the fact that corollary to the adoption of the assailed marketing
technique is the effort of the company to compensate whatever loss the workers may suffer because
of the new plan over and above than what has been provided in the collective bargaining agreement.
To us, this is one indication that the action of the management is devoid of any anti-union hues. (pp.
24-25, Rollo.)
The dispositive part of the Minister's Order reads:
WHEREFORE, premises considered, the notice of strike filed by the petitioner, San Miguel Brewery
Sales Force Union-PTGWO is hereby dismissed. Management however is hereby ordered to pay an
additional three (3) months back adjustment commissions over and above the adjusted commission
under the complementary distribution system. (p. 26, Rollo.)
The petition has no merit.
Public respondent was correct in holding that the CDS is a valid exercise of management prerogatives:
Except as limited by special laws, an employer is free to regulate, according to his own discretion
and judgment, all aspects of employment, including hiring, work assignments, working methods,
time, place and manner of work, tools to be used, processes to be followed, supervision of workers,
working regulations, transfer of employees, work supervision, lay-off of workers and the discipline,

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dismissal and recall of work. ... (NLU vs. Insular La Yebana Co., 2 SCRA 924; Republic Savings
Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V. Hernandez, Labor Relations Law, 1985 Ed., p. 44.)
(Emphasis ours.)
Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means designed
towards that goal. In Abbott Laboratories vs. NLRC, 154 SCRA 713, We ruled:
... Even as the law is solicitous of the welfare of the employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. The free will of management to
conduct its own business affairs to achieve its purpose cannot be denied.
So long as a company's management prerogatives are exercised in good faith for the advancement of the
employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold them (LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil.
American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18
SCRA 110). San Miguel Corporation's offer to compensate the members of its sales force who will be adversely
affected by the implementation of the CDS by paying them a so-called "back adjustment commission" to make up
for the commissions they might lose as a result of the CDS proves the company's good faith and lack of intention to
bust their union.
WHEREFORE, the petition for certiorari is dismissed for lack of merit.
SO ORDERED.

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

NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION
and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.
Jose Mario C. Bunag for petitioner.
The Solicitor General and the Chief Legal Officer, NLRC, for public respondent.
Zoilo V. de la Cruz for private respondent.
DECISION
REGALADO, J p:
The main issue presented for resolution in this original petition for certiorari is whether supervisory employees, as
defined in Article 212 (m), Book V of the Labor Code, should be considered as officers or members of the
managerial staff under Article 82, Book III of the same Code, and hence are not entitled to overtime rest day and
holiday pay.
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled
by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. The Batangas
refinery was privatized on April 11, 1992 pursuant to Proclamation No. 50. 1 Private respondent union represents
the former supervisors of the NASUREFCO Batangas Sugar Refinery, namely, the Technical Assistant to the
Refinery Operations Manager, Shift Sugar Warehouse Supervisor, Senior Financial/Budget Analyst, General
Accountant, Cost Accountant, Sugar Accountant, Junior Financial/Budget Analyst, Shift Boiler Supervisor,, Shift

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Operations Chemist, Shift Electrical Supervisor, General Services Supervisor, Instrumentation Supervisor,
Community Development Officer, Employment and Training Supervisor, Assistant Safety and Security Officer, Head
and Personnel Services, Head Nurse, Property Warehouse Supervisor, Head of Inventory Control Section, Shift
Process Supervisor, Day Maintenance Supervisor and Motorpool Supervisor.
On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file
to department heads. The JE Program was designed to rationalized the duties and functions of all positions,
reestablish levels of responsibility, and recognize both wage and operational structures. Jobs were ranked according
to effort, responsibility, training and working conditions and relative worth of the job. As a result, all positions were
re-evaluated, and all employees including the members of respondent union were granted salary adjustments and
increases in benefits commensurate to their actual duties and functions.
We glean from the records that for about ten years prior to the JE Program, the members of respondent union were
treated in the same manner as rank-and file employees. As such, they used to be paid overtime, rest day and
holiday pay pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended. With the
implementation of the JE Program, the following adjustments were made: (1) the members of respondent union
were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and
benefits; (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program,
with the union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the highest paid
rank-and-file employee; (3) longevity pay was increased on top of alignment adjustments; (4) they were entitled to
increased company COLA of P225.00 per month; (5) there was a grant of P100.00 allowance for rest day/holiday
work.
On May 11, 1990, petitioner NASUREFCO recognized herein respondent union, which was organized pursuant to
Republic Act NO. 6715 allowing supervisory employees to form their own unions, as the bargaining representative
of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery.
Two years after the implementation of the JE Program, specifically on June 20, 1990, the members of herein
respondent union filed a complainant with the executive labor arbiter for non-payment of overtime, rest day and
holiday pay allegedly in violation of Article 100 of the Labor Code.
On January 7, 1991, Executive Labor Arbiter Antonio C. Pido rendered a decision 2 disposing as follows:
"WHEREFORE, premises considered, respondent National Sugar refineries Corporation is hereby directed to
1. pay the individual members of complainant union the usual overtime pay, rest day pay and holiday pay enjoyed
by them instead of the P100.00 special allowance which was implemented on June 11, 1988; and
2. pay the individual members of complainant union the difference in money value between the P100.00 special
allowance and the overtime pay, rest day pay and holiday pay that they ought to have received from June 1, 1988.
All other claims are hereby dismissed for lack of merit.
SO ORDERED."
In finding for the members therein respondent union, the labor ruled that the along span of time during which the
benefits were being paid to the supervisors has accused the payment thereof to ripen into contractual obligation; at
the complainants cannot be estopped from questioning the validity of the new compensation package despite the
fact that they have been receiving the benefits therefrom, considering that respondent union was formed only a year
after the implementation of the Job Evaluation Program, hence there was no way for the individual supervisors to
express their collective response thereto prior to the formation of the union; and the comparative computations
presented by the private respondent union showed that the P100.00 special allowance given NASUREFCO fell

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short of what the supervisors ought to receive had the overtime pay rest day pay and holiday pay not been
discontinued, which arrangement, therefore, amounted to a diminution of benefits.
On appeal, in a decision promulgated on July 19, 1991 by its Third Division, respondent National Labor Relations
Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent union
are not managerial employees, as defined under Article 212 (m) of the Labor Code and, therefore, they are entitled
to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory employees are merely
exercising recommendatory powers subject to the evaluation, review and final action by their department heads;
their responsibilities do not require the exercise of discretion and independent judgment; they do not participate in
the formulation of management policies nor in the hiring or firing of employees; and their main function is to carry
out the ready policies and plans of the corporation. 3 Reconsideration of said decision was denied in a resolution of
public respondent dated August 30, 1991. 4
Hence this petition for certiorari, with petitioner NASUREFCO asseverating that public respondent commission
committed a grave abuse of discretion in refusing to recognized the fact that the members of respondent union are
members of the managerial staff who are not entitled to overtime, rest day and holiday pay; and in making petitioner
assume the "double burden" of giving the benefits due to rank-and-file employees together with those due to
supervisors under the JE Program.
We find creditable merit in the petition and that the extraordinary writ of certiorari shall accordingly issue.
The primordial issue to be resolved herein is whether the members of respondent union are entitled to overtime, rest
day and holiday pay. Before this can be resolved, however it must of necessity be ascertained first whether or not
the union members, as supervisory employees, are to be considered as officers or members of the managerial staff
who are exempt from the coverage of Article 82 of the Labor Code.
It is not disputed that the members of respondent union are supervisory employees, as defined employees, as
defined under Article 212(m), Book V of the Labor Code on Labor Relations, which reads:
"(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory
employees are those who, in the interest of the employer effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment.
All employees not falling within any of those above definitions are considered rank-and-file employees of this Book."
Respondent NLRC, in holding that the union members are entitled to overtime, rest day and holiday pay, and in
ruling that the latter are not managerial employees, adopted the definition stated in the aforequoted statutory
provision.
Petitioner, however, avers that for purposes of determining whether or not the members of respondent union are
entitled to overtime, rest day and holiday pay, said employees should be considered as "officers or members of the
managerial staff" as defined under Article 82, Book III of the Labor Code on "Working Conditions and Rest Periods"
and amplified in Section 2, Rule I, Book III of the Rules to Implement the Labor Code, to wit:
"Art. 82 Coverage. The provisions of this title shall apply to employees in all establishments and undertakings
whether for profit or not, but not to government employees, managerial employees, field personnel, members of the
family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of
another, and workers who are paid by results as determined by the Secretary of Labor in Appropriate regulations.
"As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the
establishment in which they are employed or of a department or subdivision thereof, and to other officers or
members of the managerial staff." (Emphasis supplied.)

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xxx xxx xxx
'Sec. 2. Exemption. The provisions of this rule shall not apply to the following persons if they qualify for
exemption under the condition set forth herein:
xxx xxx xxx
(b) Managerial employees, if they meet all of the following conditions, namely:
(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.
(c) Officers or members of a managerial staff if they perform the following duties and responsibilities:
(1) The primary duty consists of the performance of work directly related to management policies of their employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(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 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 above."
It is the submission of petitioner that while the members of respondent union, as supervisors, may not be occupying
managerial positions, they are clearly officers or members of the managerial staff because they meet all the
conditions prescribed by law and, hence, they are not entitled to overtime, rest day and supervisory employees
under Article 212 (m) should be made to apply only to the provisions on Labor Relations, while the right of said
employees to the questioned benefits should be considered in the light of the meaning of a managerial employee
and of the officers or members of the managerial staff, as contemplated under Article 82 of the Code and Section 2,
Rule I Book III of the implementing rules. In other words, for purposes of forming and joining unions, certification
elections, collective bargaining, and so forth, the union members are supervisory employees. In terms of working
conditions and rest periods and entitlement to the questioned benefits, however, they are officers or members of the
managerial staff, hence they are not entitled thereto.
While the Constitution is committed to the policy of social justice and the protection of the working class, it should
not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its
own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its
concern for those with less privileges in life, 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. 5
This is one such case where we are inclined to tip the scales of justice in favor of the employer.

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The question whether a given employee is exempt from the benefits of the law is a factual one dependent on the
circumstances of the particular case, In determining whether an employee is within the terms of the statutes, the
criterion is the character of the work performed, rather than the title of the employee's position. 6
Consequently, while generally this Court is not supposed to review the factual findings of respondent commission,
substantial justice and the peculiar circumstances obtaining herein mandate a deviation from the rule.
A cursory perusal of the Job Value Contribution Statements 7 of the union members will readily show that these
supervisory employees are under the direct supervision of their respective department superintendents and that
generally they assist the latter in planning, organizing, staffing, directing, controlling communicating and in making
decisions in attaining the company's set goals and objectives. These supervisory employees are likewise
responsible for the effective and efficient operation of their respective departments. More specifically, their duties
and functions include, among others, the following operations whereby the employee:
1) assists the department superintendent in the following:
a) planning of systems and procedures relative to department activities;
b) organizing and scheduling of work activities of the department, which includes employee shifting scheduled and
manning complement;
c) decision making by providing relevant information data and other inputs;
d) attaining the company's set goals and objectives by giving his full support;
e) selecting the appropriate man to handle the job in the department; and
f) preparing annual departmental budget;
2) observes, follows and implements company policies at all times and recommends disciplinary action on erring
subordinates;
3) trains and guides subordinates on how to assume responsibilities and become more productive;
4) conducts semi-annual performance evaluation of his subordinates and recommends necessary action for their
development/advancement;
5) represents the superintendent or the department when appointed and authorized by the former;
6) coordinates and communicates with other inter and intra department supervisors when necessary;
7) recommends disciplinary actions/promotions;
8) recommends measures to improve work methods, equipment performance, quality of service and working
conditions;
9) sees to it that safety rules and regulations and procedure and are implemented and followed by all NASUREFCO
employees, recommends revisions or modifications to said rules when deemed necessary, and initiates and
prepares reports for any observed abnormality within the refinery;
10) supervises the activities of all personnel under him and goes to it that instructions to subordinates are properly
implemented; and

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11) performs other related tasks as may be assigned by his immediate superior.
From the foregoing, it is apparent that the members of respondent union discharge duties and responsibilities which
ineluctably qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the
aforestated Rules to Implement the Labor Code, viz.: (1) their primary duty consists of the performance of work
directly related to management policies of their employer; (2) they customarily and regularly exercise discretion and
independent judgment; (3) they regularly and directly assist the managerial employee whose primary duty consist of
the management of a department of the establishment in which they are employed (4) they execute, under general
supervision, work along specialized or technical lines requiring special training, experience, or knowledge; (5) they
execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20% of
their hours worked in a work-week to activities which are not directly and clearly related to the performance of their
work hereinbefore described.
Under the facts obtaining in this case, we are constrained to agree with petitioner that the union members should be
considered as officers and members of the managerial staff and are, therefore, exempt from the coverage of Article
82. Perforce, they are not entitled to overtime, rest day and holiday.
The distinction made by respondent NLRC on the basis of whether or not the union members are managerial
employees, to determine the latter's entitlement to the questioned benefits, is misplaced and inappropriate. It is
admitted that these union members are supervisory employees and this is one instance where the nomenclatures or
titles of their jobs conform with the nature of their functions. Hence, to distinguish them from a managerial
employee, as defined either under Articles 82 or 212 (m) of the Labor Code, is puerile and in efficacious. The
controversy actually involved here seeks a determination of whether or not these supervisory employees ought to
be considered as officers or members of the managerial staff. The distinction, therefore, should have been made
along that line and its corresponding conceptual criteria.
II. We likewise no not subscribe to the finding of the labor arbiter that the payment of the questioned benefits to the
union members has ripened into a contractual obligation.
A. Prior to the JE Program, the union members, while being supervisors, received benefits similar to the rank-andfile employees such as overtime, rest day and holiday pay, simply because they were treated in the same manner
as rank-and-file employees, and their basic pay was nearly on the same level as those of the latter, aside from the
fact that their specific functions and duties then as supervisors had not been properly defined and delineated from
those of the rank-and-file. Such fact is apparent from the clarification made by petitioner in its motion for
reconsideration 8 filed with respondent commission in NLRC Case No. CA No. I-000058, dated August 16, 1991,
wherein, it lucidly explained:
"But, complainants no longer occupy the same positions they held before the JE Program. Those positions formerly
classified as 'supervisory' and found after the JE Program to be rank-and-file were classified correctly and continue
to receive overtime, holiday and restday pay. As to them, the practice subsists.
"However, those whose duties confirmed them to be supervisory, were re-evaluated, their duties re-defined and in
most cases their organizational positions re-designated to confirm their superior rank and duties. Thus, after the JE
program, complainants cannot be said to occupy the same positions." 9
It bears mention that this positional submission was never refuted nor controverted by respondent union in any of its
pleadings filed before herein public respondent or with this Court. Hence, it can be safely concluded therefrom that
the members of respondent union were paid the questioned benefits for the reason that, at that time, they were
rightfully entitled thereto. Prior to the JE Program, they could not be categorically classified as members or officers
of the managerial staff considering that they were then treated merely on the same level as rank-and-file.
Consequently, the payment thereof could not be construed as constitutive of voluntary employer practice, which
cannot be now be unilaterally withdrawn by petitioner. To be considered as such, it should have been practiced over
a long period of time, and must be shown to have been consistent and deliberate. 10

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The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to
continue giving the benefits knowingly fully well that said employees are not covered by the law requiring payment
thereof. 11 In the case at bar, respondent union failed to sufficiently establish that petitioner has been motivated or is
wont to give these benefits out of pure generosity.
B. It remains undisputed that the implementation of the JE Program, the members of private respondent union were
re-classified under levels S-5 S-8 which were considered under the program as managerial staff purposes of
compensation and benefits, that they occupied re-evaluated positions, and that their basic pay was increased by an
average of 50% of their basic salary prior to the JE Program. In other words, after the JE Program there was an
ascent in position, rank and salary. This in essence is a promotion which is defined as the advancement from one
position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by
an increase in salary. 12
Quintessentially, with the promotion of the union members, they are no longer entitled to the benefits which attach
and pertain exclusively to their positions. Entitlement to the benefits provided for by law requires prior compliance
with the conditions set forth therein. With the promotion of the members of respondent union, they occupied
positions which no longer met the requirements imposed by law. Their assumption of these positions removed them
from the coverage of the law, ergo, their exemption therefrom.
As correctly pointed out by petitioner, if the union members really wanted to continue receiving the benefits which
attach to their former positions, there was nothing to prevent them from refusing to accept their promotions and their
corresponding benefits. As the sating goes by, they cannot have their cake and eat it too or, as petitioner suggests,
they could not, as a simple matter of law and fairness, get the best of both worlds at the expense of NASUREFCO.
Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management,
provided it is done in good faith. In the case at bar, private respondent union has miserably failed to convince this
Court that the petitioner acted implementing the JE Program. There is no showing that the JE Program was
intended to circumvent the law and deprive the members of respondent union of the benefits they used to receive.
Not so long ago, on this particular score, we had the occasion to hold that:
". . . it is the prerogative of the management to regulate, according to its discretion and judgment, all aspects of
employment. This flows from the established rule that labor law does not authorize the substitution of the judgment
of the employer in the conduct of its business. Such management prerogative may be availed of without fear of any
liability so long as it is exercised in good faith for the advancement of the employer's interest and not for the purpose
of defeating on circumventing the rights of employees under special laws or valid agreement and are not exercised
in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite." 13
WHEREFORE, the impugned decision and resolution of respondent National Labor Relations Commission
promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby ANNULLED and SET ASIDE for having
been rendered and adopted with grave abuse of discretion, and the basic complaint of private respondent union is
DISMISSED.

G.R. No. 94951

April 22, 1991

APEX MINING COMPANY, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents.

12
Bernabe B. Alabastro for petitioner.
Angel Fernandez for private respondent.

GANCAYCO, J.:
Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said
firm? This is the novel issue raised in this petition.
Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to
perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was
paid on a piece rate basis. However, on January 17, 1982, she was paid on a monthly basis at P250.00 a month
which was ultimately increased to P575.00 a month.
On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she
accidentally slipped and hit her back on a stone. She reported the accident to her immediate supervisor Mila de la
Rosa and to the personnel officer, Florendo D. Asirit. As a result of the accident she was not able to continue with
her work. She was permitted to go on leave for medication. De la Rosa offered her the amount of P 2,000.00 which
was eventually increased to P5,000.00 to persuade her to quit her job, but she refused the offer and preferred to
return to work. Petitioner did not allow her to return to work and dismissed her on February 4, 1988.
On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and
Employment. After the parties submitted their position papers as required by the labor arbiter assigned to the case
on August 24, 1988 the latter rendered a decision, the dispositive part of which reads as follows:
WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the respondent,
Apex Mining Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit:
1 Salary
Differential P16,289.20
2. Emergency Living
Allowance 12,430.00
3. 13th Month Pay
Differential 1,322.32
4. Separation Pay
(One-month for
every year of
service [1973-19881) 25,119.30
or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55,161.42).
SO ORDERED.1

13
Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations Commission (NLRC),
wherein in due course a decision was rendered by the Fifth Division thereof on July 20, 1989 dismissing the appeal
for lack of merit and affirming the appealed decision. A motion for reconsideration thereof was denied in a resolution
of the NLRC dated June 29, 1990.
Hence, the herein petition for review by certiorari, which appopriately should be a special civil action for certiorari,
and which in the interest of justice, is hereby treated as such.2 The main thrust of the petition is that private
respondent should be treated as a mere househelper or domestic servant and not as a regular employee of
petitioner.
The petition is devoid of merit.
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant"
are defined as follows:
The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any
person, whether male or female, who renders services in and about the employer's home and which
services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers
exclusively to the personal comfort and enjoyment of the employer's family.3
The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the
employer's home to minister exclusively to the personal comfort and enjoyment of the employer's family. Such
definition covers family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other similar
househelps.
The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company,
like petitioner who attends to the needs of the company's guest and other persons availing of said facilities. By the
same token, it cannot be considered to extend to then driver, houseboy, or gardener exclusively working in the
company, the staffhouses and its premises. They may not be considered as within the meaning of a "househelper"
or "domestic servant" as above-defined by law.
The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While
it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a
company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they
are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged
in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or
within the premises of the business of the employer. In such instance, they are employees of the company or
employer in the business concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the
business of the employer that such househelper or domestic servant may be considered as such as employee. The
Court finds no merit in making any such distinction. The mere fact that the househelper or domestic servant is
working within the premises of the business of the employer and in relation to or in connection with its business, as
in its staffhouses for its guest or even for its officers and employees, warrants the conclusion that such househelper
or domestic servant is and should be considered as a regular employee of the employer and not as a mere family
househelper or domestic servant as contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as amended.
Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her
work.1wphi1 This argument notwithstanding, there is enough evidence to show that because of an accident which
took place while private respondent was performing her laundry services, she was not able to work and was
ultimately separated from the service. She is, therefore, entitled to appropriate relief as a regular employee of
petitioner. Inasmuch as private respondent appears not to be interested in returning to her work for valid reasons,
the payment of separation pay to her is in order.

14
WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are
hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.

G.R. No. L-18353

July 31, 1963

SAN MIGUEL BREWERY, INC., petitioner,

vs.
DEMOCRATIC LABOR ORGANIZATION, ET AL., respondents.
Paredes, Poblador, Cruz and Nazareno for petitioner.
Delfin N. Mercader for respondents.
BAUTISTA ANGELO, J.:
On January 27, 1955, the Democratic Labor Association filed complaint against the San Miguel Brewery, Inc.
embodying 12 demands for the betterment of the conditions of employment of its members. The company filed its
answer to the complaint specifically denying its material averments and answering the demands point by point. The
company asked for the dismissal of the complaint.
At the hearing held sometime in September, 1955, the union manifested its desire to confine its claim to its demands
for overtime, night-shift differential pay, and attorney's fees, although it was allowed to present evidence on service
rendered during Sundays and holidays, or on its claim for additional separation pay and sick and vacation leave
compensation.1wph1.t
After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who was commissioned to
receive the evidence, rendered decision expressing his disposition with regard to the points embodied in the
complaint on which evidence was presented. Specifically, the disposition insofar as those points covered by this
petition for review are concerned, is as follows:
1. With regard to overtime compensation, Judge Bautista held that the provisions of the Eight-Hour Labor
Law apply to the employees concerned for those working in the field or engaged in the sale of the
company's products outside its premises and consequently they should be paid the extra compensation
accorded them by said law in addition to the monthly salary and commission earned by them, regardless of
the meal allowance given to employees who work up to late at night.
2. As to employees who work at night, Judge Bautista decreed that they be paid their corresponding salary
differentials for work done at night prior to January 1, 1949 with the present qualification: 25% on the basis
of their salary to those who work from 6:00 to 12:00 p.m., and 75% to those who work from 12:01 to 6:00 in
the morning.
3. With regard to work done during Sundays and holidays, Judge Bautista also decreed that the employees
concerned be paid an additional compensation of 25% as provided for in Commonwealth Act No. 444 even if
they had been paid a compensation on monthly salary basis.
The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis, payment of
accumulated vacation and sick leave and attorney's fees, as well as the award of additional separation pay, were
either dismissed, denied, or set aside.

15
Its motion for reconsideration having been denied by the industrial court en banc, which affirmed the decision of the
court a quo with few exceptions, the San Miguel Brewery, Inc. interposed the present petition for review.
Anent the finding of the court a quo, as affirmed by the Court of Industrial Relations, to the effect that outside or field
sales personnel are entitled to the benefits of the Eight-Hour Labor Law, the pertinent facts are as follows:
After the morning roll call, the employees leave the plant of the company to go on their respective sales routes
either at 7:00 a.m. for soft drinks trucks, or 8:00 a.m. for beer trucks. They do not have a daily time record. The
company never require them to start their work as outside sales personnel earlier than the above schedule.
The sales routes are so planned that they can be completed within 8 hours at most, or that the employees could
make their sales on their routes within such number of hours variable in the sense that sometimes they can be
completed in less than 8 hours, sometimes 6 to 7 hours, or more. The moment these outside or field employees
leave the plant and while in their sales routes they are on their own, and often times when the sales are completed,
or when making short trip deliveries only, they go back to the plant, load again, and make another round of sales.
These employees receive monthly salaries and sales commissions in variable amounts. The amount of
compensation they receive is uncertain depending upon their individual efforts or industry. Besides the monthly
salary, they are paid sales commission that range from P30, P40, sometimes P60, P70, to sometimes P90, P100
and P109 a month, at the rate of P0.01 to P0.01- per case.
It is contended that since the employees concerned are paid a commission on the sales they make outside of the
required 8 hours besides the fixed salary that is paid to them, the Court of Industrial Relations erred in ordering that
they be paid an overtime compensation as required by the Eight-Hour Labor Law for the reason that the commission
they are paid already takes the place of such overtime compensation. Indeed, it is claimed, overtime compensation
is an additional pay for work or services rendered in excess of 8 hours a day by an employee, and if the employee is
already given extra compensation for labor performed in excess of 8 hours a day, he is not covered by the law. His
situation, the company contends, can be likened to an employee who is paid on piece-work, "pakiao", or
commission basis, which is expressly excluded from the operation of the Eight-Hour Labor Law.1
We are in accord with this view, for in our opinion the Eight-Hour Labor Law only has application where an employee
or laborer is paid on a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if he is
made to work beyond the requisite period of 8 hours, he should be paid the additional compensation prescribed by
law. This law has no application when the employee or laborer is paid on a piece-work, "pakiao", or commission
basis, regardless of the time employed. The philosophy behind this exemption is that his earnings in the form of
commission based on the gross receipts of the day. His participation depends upon his industry so that the more
hours he employs in the work the greater are his gross returns and the higher his commission. This philosophy is
better explained in Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, as follows:
The reasons for excluding an outside salesman are fairly apparent. Such salesman, to a greater extent,
works individually. There are no restrictions respecting the time he shall work and he can earn as much or as
little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away from his employer's place of business, is not subject to
the personal supervision of his employer, and his employer has no way of knowing the number of hours he
works per day.
True it is that the employees concerned are paid a fixed salary for their month of service, such as Benjamin Sevilla,
a salesman, P215; Mariano Ruedas, a truck driver, P155; Alberto Alpaza and Alejandro Empleo, truck helpers, P125
each, and sometimes they work in excess of the required 8-hour period of work, but for their extra work they are
paid a commission which is in lieu of the extra compensation to which they are entitled. The record shows that these
employees during the period of their employment were paid sales commission ranging from P30, P40, sometimes
P60, P70, to sometimes P90, P100 and P109 a month depending on the volume of their sales and their rate of
commission per case. And so, insofar is the extra work they perform, they can be considered as employees paid on
piece work, "pakiao", or commission basis. The Department of Labor, called upon to implement, the Eight-Hour

16
Labor Law, is of this opinion when on December 9, 1957 it made the ruling on a query submitted to it, thru the
Director of the Bureau of Labor Standards, to the effect that field sales personnel receiving regular monthly salaries,
plus commission, are not subject to the Eight-Hour Labor Law. Thus, on this point, said official stated:
. . . Moreover, when a fieldman receives a regular monthly salary plus commission on percentage basis of
his sales, it is also the established policy of the Office to consider his commission as payment for the extra
time he renders in excess of eight hours, thereby classifying him as if he were on piecework basis, and
therefore, technically speaking, he is not subject to the Eight-Hour Labor Law.
We are, therefore, of the opinion that the industrial court erred in holding that the Eight-Hour Labor Law applies to
the employees composing the outside service force and in ordering that they be paid the corresponding additional
compensation.
With regard to the claim for night salary differentials, the industrial court found that claimants Magno Johnson and
Jose Sanchez worked with the respondent company during the period specified by them in their testimony and that
watchmen Zoilo Illiga, Inocentes Prescillas and Daniel Cayuca rendered night duties once every three weeks
continuously during the period of the employment and that they were never given any additional compensation
aside from their monthly regular salaries. The court found that the company started paying night differentials only in
January, 1949 but never before that time. And so it ordered that the employees concerned be paid 25% additional
compensation for those who worked from 6:00 to 12:00 p.m. and 75% additional compensation for those who
worked from 12:01 to 6: 00 in the morning. It is now contended that this ruling is erroneous because an award for
night shift differentials cannot be given retroactive effect but can only be entertained from the date of demand which
was on January 27, 1953, citing in support thereof our ruling in Earnshaws Docks & Honolulu Iron Works v. The
Court of Industrial Relations, et al., L-8896, January 25, 1957.
This ruling, however, has no application here for it appears that before the filing of the petition concerning this claim
a similar one had already been filed long ago which had been the subject of negotiations between the union and the
company which culminated in a strike in 1952. Unfortunately, however, the strike fizzled out and the strikers were
ordered to return to work with the understanding that the claim for night salary differentials should be settled in court.
It is perhaps for this reason that the court a quo granted this claim in spite of the objection of the company to the
contrary.
The remaining point to be determined refers to the claim for pay for Sundays and holidays for service performed by
some claimants who were watchmen or security guards. It is contended that these employees are not entitled to
extra pay for work done during these days because they are paid on a monthly basis and are given one day off
which may take the place of the work they may perform either on Sunday or any holiday.
We disagree with this claim because it runs counter to law. Section 4 of Commonwealth Act No. 444 expressly
provides that no person, firm or corporation may compel an employee or laborer to work during Sundays and legal
holidays unless he is paid an additional sum of 25% of his regular compensation. This proviso is mandatory,
regardless of the nature of compensation. The only exception is with regard to public utilities who perform some
public service.
WHEREFORE, the decision of the industrial court is hereby modified as follows: the award with regard to extra work
performed by those employed in the outside or field sales force is set aside. The rest of the decision insofar as work
performed on Sundays and holidays covering watchmen and security guards, as well as the award for night salary
differentials, is affirmed. No costs.

17

G.R. No. 96078 January 9, 1992

HILARIO RADA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR CONSULTANTS AND
PLANNERS, INC., respondents.
Cabellero, Calub, Aumentado & Associates Law Offices for petitioner.

REGALADO, J.:
In this special civil action for certiorari, petitioner Rada seeks to annul the decision of respondent National Labor
Relations Commission (NLRC), dated November 19, 1990, reversing the decision of the labor arbiter which ordered
the reinstatement of petitioner with backwages and awarded him overtime pay. 1
The facts, as stated in the Comment of private respondent Philnor Consultants and Planners, Inc. (Philnor), are as
follows:
Petitioner's initial employment with this Respondent was under a "Contract of Employment for a
Definite Period" dated July 7, 1977, copy of which is hereto attached and made an integral part
hereof as Annex A whereby Petitioner was hired as "Driver" for the construction supervision phase of
the Manila North Expressway Extension, Second Stage (hereinafter referred to as MNEE Stage 2)
for a term of "about 24 months effective July 1, 1977.
xxx xxx xxx
Highlighting the nature of Petitioner's employment, Annex A specifically provides as follows:
It is hereby understood that the Employer does not have a continuing need for the
services of the Employee beyond the termination date of this contract and that the
Employee's services shall automatically, and without notice, terminate upon the
completion of the above specified phase of the project; and that it is further
understood that the engagement of his/her services is coterminus with the same and
not with the whole project or other phases thereof wherein other employees of similar
position as he/she have been hired. (Par. 7, emphasis supplied)
Petitioner's first contract of employment expired on June 30, 1979. Meanwhile, the main project,
MNEE Stage 2, was not finished on account of various constraints, not the least of which was
inadequate funding, and the same was extended and remained in progress beyond the original
period of 2.3 years. Fortunately for the Petitioner, at the time the first contract of employment
expired, Respondent was in need of Driver for the extended project. Since Petitioner had the
necessary experience and his performance under the first contract of employment was found
satisfactory, the position of Driver was offered to Petitioner, which he accepted. Hence a second
Contract of Employment for a Definite Period of 10 months, that is, from July 1, 1979 to April 30,
1980 was executed between Petitioner and Respondent on July 7, 1979. . . .
In March 1980 some of the areas or phases of the project were completed, but the bulk of the project
was yet to be finished. By that time some of those project employees whose contracts of
employment expired or were about to expire because of the completion of portions of the project

18
were offered another employment in the remaining portion of the project. Petitioner was among
those whose contract was about to expire, and since his service performance was satisfactory,
respondent renewed his contract of employment in April 1980, after Petitioner agreed to the offer.
Accordingly, a third contract of employment for a definite period was executed by and between the
Petitioner and the Respondent whereby the Petitioner was again employed as Driver for 19 months,
from May 1, 1980 to November 30, 1981, . . .
This third contract of employment was subsequently extended for a number of times, the last
extension being for a period of 3 months, that is, from October 1, 1985 to December 31, 1985, . . .
The last extension, from October 1, 1985 to December 31, 1985 (Annex E) covered by an
"Amendment to the Contract of Employment with a Definite Period," was not extended any further
because Petitioner had no more work to do in the project. This last extension was confirmed by a
notice on November 28, 1985 duly acknowledged by the Petitioner the very next day, . . .
Sometime in the 2nd week of December 1985, Petitioner applied for "Personnel Clearance" with
Respondent dated December 9, 1985 and acknowledged having received the amount of P3,796.20
representing conversion to cash of unused leave credits and financial assistance. Petitioner also
released Respondent from all obligations and/or claims, etc. in a "Release, Waiver and
Quitclaim" . . .2
Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National Capital Region,
Department of Labor and Employment, a Complaint for non-payment of separation pay and overtime pay. On June
3, 1987, Philnor filed its Position Paper alleging, inter alia, that petitioner was not illegally terminated since the
project for which he was hired was completed; that he was hired under three distinct contracts of employment, each
of which was for a definite period, all within the estimated period of MNEE Stage 2 Project, covering different phases
or areas of the said project; that his work was strictly confined to the MNEE Stage 2 Project and that he was never
assigned to any other project of Philnor; that he did not render overtime services and that there was no demand or
claim for him for such overtime pay; that he signed a "Release, Waiver and Quitclaim" releasing Philnor from all
obligations and claims; and that Philnor's business is to provide engineering consultancy services, including
supervision of construction services, such that it hires employees according to the requirements of the project
manning schedule of a particular contract. 3
On July 2, 1987, petitioner filed an Amended Complaint alleging that he was illegally dismissed and that he was not
paid overtime pay although he was made to render three hours overtime work form Monday to Saturday for a period
of three years.
On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed since he was a regular
employee entitled to security of tenure; that he was not a project employee since Philnor is not engaged in the
construction business as to be covered by Policy Instructions No. 20; that the contract of employment for a definite
period executed between him and Philnor is against public policy and a clear circumvention of the law designed
merely to evade any benefits or liabilities under the statute; that his position as driver was essential, necessary and
desirable to the conduct of the business of Philnor; that he rendered overtime work until 6:00 p.m. daily except
Sundays and holidays and, therefore, he was entitled to overtime pay. 4
In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular employee pursuant to Article
278(c) of the Labor Code and, thus, he cannot be terminated except for a just cause under Article 280 of the Code;
and that the public respondent's ruling in Quiwa vs. Philnor Consultants and Planners, Inc. 5 is not applicable to his
case since he was an administrative employee working as a company driver, which position still exists and is
essential to the conduct of the business of Philnor even after the completion of his contract of
employment. 6 Petitioner likewise avers that the contract of employment for a definite period entered into between
him and Philnor was a ploy to defeat the intent of Article 280 of the Labor Code.

19
On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper, alleging therein that petitioner was
not a company driver since his job was to drive the employees hired to work at the MNEE Stage 2 Project to and
from the filed office at Sto. Domingo Interchange, Pampanga; that the office hours observed in the project were from
7:00 a.m. to 4:00 p.m. Mondays through Saturdays; that Philnor adopted the policy of allowing certain employees,
not necessarily the project driver, to bring home project vehicles to afford fast and free transportation to and from the
project field office considering the distance between the project site and the employees' residence, to avoid project
delays and inefficiency due to employee tardiness caused by transportation problem; that petitioner was allowed to
use a project vehicle which he used to pick up and drop off some ten employees along Epifanio de los Santos
Avenue (EDSA), on his way home to Marikina, Metro Manila; that when he was absent or on leave, another
employee living in Metro Manila used the same vehicle in transporting the same employees; that the time used by
petitioner to and from his residence to the project site from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m.,
or about three hours daily, was not overtime work as he was merely enjoying the benefit and convenience of free
transportation provided by Philnor, otherwise without such vehicle he would have used at least four hours by using
public transportation and spent P12.00 daily fare; that in the case ofQuiwa vs. Philnor Consultants and Planners,
Inc., supra, the NLRC upheld Philnor's position that Quiwa was a project employee and he was not entitled to
termination pay under Policy Instructions No. 20 since his employment was coterminous with the completion of the
project.
On August 25, 1987, Philnor filed its Respondent's Reply/Comments to Complainant's Rejoinder and Reply,
submitting therewith two letters dated January 5, 1985 and February 6, 1985, signed by MNEE Stage 2 Project
employees, including herein petitioner, where they asked what termination benefits could be given to them as the
MNEE Stage 2 Project was nearing completion, and Philnor's letter-reply dated February 22, 1985 informing them
that they are not entitled to termination benefits as they are contractual/project employees.
On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision 7 with the following dispositive portion:
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered:
(1) Ordering the respondent company to reinstate the complainant to his former position without loss
of seniority rights and other privileges with full backwages from the time of his dismissal to his actual
reinstatement;
(2) Directing the respondent company to pay the complainant overtime pay for the three excess
hours of work performed during working days from January 1983 to December 1985; and
(3) Dismissing all other claims for lack of merit.
SO ORDERED.
Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November 19, 1990, setting aside the
labor arbiter's aforequoted decision and dismissing petitioner's complaint.
Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion amounting to lack of
jurisdiction for the following reasons:
1. The decision of the labor arbiter, dated August 31, 1989, has already become final and executory;
2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is it applicable to this case;
3. The petitioner is a regular employee with eight years and five months of continuous services for his employer,
private respondent Philnor;

20
4. The claims for overtime services, reinstatement and full backwages are valid and meritorious and should have
been sustained; and
5. The decision of the labor arbiter should be reinstated as it is more in accord with the facts, the law and evidence.
The petition is devoid of merit.
1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of the appeal filed by Philnor in
spite of the latter's failure to file a supersedeas bond within ten days from receipt of the labor arbiter's decision, by
reason of which the appeal should be deemed to have been filed out of time. It will be noted, however, that Philnor
was able to file a bond although it was made beyond the 10-day reglementary period.
While it is true that the payment of the supersedeas bond is an essential requirement in the perfection of an appeal,
however, where the fee had been paid although payment was delayed, the broader interests of justice and the
desired objective of resolving controversies on the merits demands that the appeal be given due course. Besides, it
was within the inherent power of the NLRC to have allowed late payment of the bond, considering that the aforesaid
decision of the labor arbiter was received by private respondent on October 3, 1989 and its appeal was duly filed on
October 13, 1989. However, said decision did not state the amount awarded as backwages and overtime pay, hence
the amount of the supersedeas bond could not be determined. It was only in the order of the NLRC of February 16,
1990 that the amount of the supersedeas bond was specified and which bond, after an extension granted by the
NLRC, was timely filed by private respondent.
Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before the Commission or any of the
Labor Arbiters, the rules of evidence prevailing in Courts of law or equity shall not be controlling and it is the spirit
and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and objectively without regard to technicalities of law
or procedure, all in the interest of due process. 8 Finally, the issue of timeliness of the appeal being an entirely new
and unpleaded matter in the proceedings below it may not now be raised for the first time before this Court. 9
2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he cannot be
terminated without cause. Private respondent Philnor believes otherwise and asserts that petitioner is merely a
project employee who was terminated upon the completion of the project for which he was employed.
In holding that petitioner is a regular employee, the labor arbiter found that:
. . . There is no question that the complainant was employed as driver in the respondent company
continuously from July 1, 1977 to December 31, 1985 under various contracts of employment.
Similarly, there is no dispute that respondent Philnor Consultant & Planner, Inc., as its business
name connotes, has been engaged in providing to its client(e)le engineering consultancy services.
The record shows that while the different labor contracts executed by the parties stipulated definite
periods of engaging the services of the complainant, yet the latter was suffered to continue
performing his job upon the expiration of one contract and the renewal of another. Under these
circumstances, the complaint has obtained the status of regular employee, it appearing that he has
worked without fail for almost eight years, a fraction of six months considered as one whole year,
and that his assigned task as driver was necessary and desirable in the usual trade/business of the
respondent employer. Assuming to be true, as spelled out in the employment contract, that the
Employer has no "continuing need for the services of the Employe(e) beyond the termination date of
this contract and that the Employee's services shall automatically, and without notice, terminate upon
completion of the above specified phase of the project," still we cannot see our way clear why the
complainant was hired and his services engaged contract after contract straight from 1977 to 1985
which, to our considered view, lends credence to the contention that he worked as regular driver
ferrying early in the morning office personnel to the company main office in Pampanga and bringing
back late in the afternoon to Manila, and driving company executives for inspection of construction

21
workers to the jobsites. All told, we believe that the complainant, under the environmental facts
obtaining in the case at bar, is a regular employee, the provisions of written agreement to the
contrary notwithstanding and regardless of the oral understanding of the parties . . . 10
On the other hand, respondent NLRC declared that, as between the uncorroborated and unsupported assertions of
petitioners and those of private respondent which are supported by documents, greater credence should be given
the latter. It further held that:
Complainant was hired in a specific project or undertaking as driver. While such project was still ongoing he was hired several times with his employment period fixed every time his contract was
renewed. At the completion of the specific project or undertaking his employment contract was not
renewed.
We reiterate our ruling in the case of (Quiwa) vs. Philnor Consultants and Planners, Inc., NLRC RAB
III 5-1738-84, it is being applicable in this case, viz.:
. . . While it is true that the activities performed by him were necessary or desirable in
the usual business or trade of the respondent as consultants, planners, contractor
and while it is also true that the duration of his employment was for a period of about
seven years, these circumstances did not make him a
regular employee in contemplation of Article 281 of (the) Labor Code. . . . 11
Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et al. 12 is applicable to the case at
bar. Thus:
We hold that private respondents were project employees whose work was coterminous with the
project or which they were hired. Project employees, as distinguished from regular or non-project
employees, are mentioned in section 281 of the Labor Code as those "where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee."
Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employeremployee relations in the construction industry, provides:
Project employees are those employed in connection with a particular construction
project. Non-project (regular) employees are those employed by a construction
company without reference to any particular project.
Project employees are not entitled to termination pay if they are terminated as a
result of the completion of the project or any phase thereof in which they are
employed, regardless of the number of projects in which they have been employed
by a particular construction company. Moreover, the company is not required to
obtain clearance from the Secretary of Labor in connection with such termination.
The petitioner cited three of its own cases wherein the National Labor Relations Commission,
Deputy Minister of Labor and Employment Inciong and the Director of the National Capital Region
held that the layoff of its project employees was lawful. Deputy Minister Inciong in TFU Case No.
1530, In Re Sandoval Shipyards, Inc. Application for Clearance to Terminate Employees, rendered
the following ruling on February 26, 1979;
We feel that there is merit in the contention of the applicant corporation. To our mind,
the employment of the employees concerned were fixed for a specific project or

22
undertaking. For the nature of the business the corporation is engaged into is one
which will not allow it to employ workers for an indefinite period.
It is significant to note that the corporation does not construct vessels for sale or
otherwise which will demand continuous productions of ships and will need
permanent or regular workers. It merely accepts contracts for shipbuilding or for
repair of vessels form third parties and, only, on occasion when it has work contract
of this nature that it hires workers to do the job which, needless to say, lasts only for
less than a year or longer.
The completion of their work or project automatically terminates their employment, in
which case, the employer is, under the law, only obliged to render a report on the
termination of the employment. (139-140, Rollo of G.R. No. 65689) (Emphasis
supplied)
In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., 13 we likewise held that:
As an electrical contractor, the private respondent depends for its business on the contracts it is able
to obtain from real estate developers and builders of buildings. Since its work depends on the
availability of such contracts or "projects," necessarily the duration of the employment's of this work
force is not permanent but co-terminus with the projects to which they are assigned and from whose
payrolls they are paid. It would be extremely burdensome for their employer who, like them,
depends on the availability of projects, if it would have to carry them as permanent employees and
pay them wages even if there are no projects for them to work on. (Emphasis supplied.)
It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the fact that his
services were rendered only for a particular project which took that same period of time to complete categorizes him
as a project employee. Petitioner was employed for one specific project.
A non-project employee is different in that the employee is hired for more than one project. A non-project
employee, vis-a-vis a project employee, is best exemplified in the case of Fegurin, et al. vs. National Labor
Relations Commission, et al. 14 wherein four of the petitioners had been working with the company for nine years,
one for eight years, another for six years, the shortest term being three years. In holding that petitioners are regular
employees, this Court therein explained:
Considering the nature of the work of petitioners, that of carpenter, laborer or mason, their respective
jobs would actually be continuous and on-going. When a project to which they are individually
assigned is completed, they would be assigned to the next project or a phase thereof. In other
words, they belonged to a "work pool" from which the company would draw workers for assignment
to other projects at its discretion. They are, therefore, actually "non-project employees."
From the foregoing, it is clear that petitioner is a project employee considering that he does not belong to a "work
pool" from which the company would draw workers for assignment to other projects at its discretion. It is likewise
apparent from the facts obtaining herein that petitioner was utilized only for one particular project, the MNEE Stage
2 Project of respondent company. Hence, the termination of herein petitioner is valid by reason of the completion of
the project and the expiration of his employment contract.
3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The fact that he picks
up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the
same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to
petitioner's job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the
convenience of the employees, but primarily for the benefit of the employer, herein private respondent. This fact is
inevitably deducible from the Memorandum of respondent company:

23
The herein Respondent resorted to the above transport arrangement because from its previous
project construction supervision experiences, Respondent found out that project delays and
inefficiencies resulted from employees' tardiness; and that the problem of tardiness, in turn, was
aggravated by transportation problems, which varied in degrees in proportion to the distance
between the project site and the employees' residence. In view of this lesson from experience, and
as a practical, if expensive, solution to employees' tardiness and its concomitant problems,
Respondent adopted the policy of allowing certain employees not necessarily project drivers to
bring home project vehicles, so that employees could be afforded fast, convenient and free
transportation to and from the project field office. . . . 15
Private respondent does not hesitate to admit that it is usually the project driver who is tasked with picking up or
dropping off his fellow employees. Proof thereof is the undisputed fact that when petitioner is absent, another driver
is supposed to replace him and drive the vehicle and likewise pick up and/or drop off the other employees at the
designated points on EDSA. If driving these employees to and from the project site is not really part of petitioner's
job, then there would have been no need to find a replacement driver to fetch these employees. But since the
assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time
required of and used by petitioner in going from his residence to the field office and back, that is, from 5:30 a.m. to
7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter rounded off as averaging three hours each
working day, should be paid as overtime work. Quintessentially, petitioner should be given overtime pay for the three
excess hours of work performed during working days from January, 1983 to December, 1985.
WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the decision
appealed from is AFFIRMED in all other respects.
SO ORDERED.

G.R. No. L-17068

December 30, 1961

NATIONAL SHIPYARDS AND STEEL CORPORATION, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and DOMINADOR MALONDRAS, respondents.
N. C. Virata for petitioner.
Mariano B. Tuason for respondent Court.
Manuel P. Calanog for respondent Dominador Malondras.

REYES, J.B.L., J.:

Petition filed by the National Shipyards and Steel Corporation (otherwise known as the NASSCO) to review certain
orders of the respondent Court of Industrial Relations requiring it to pay its bargeman Dominador Malondras
overtime service of 16 hours a day for a period from January 1, 1954 to December 31, 1956, and from January 1,
1957 to April 30, 1957, inclusive.
The petitioner NASSCO, a government-owned and controlled corporation, is the owner of several barges and
tugboats used in the transportation of cargoes and personnel in connection with its business of shipbuilding and
repair. In order that its bargeman could immediately be called to duty whenever their services are needed, they are
required to stay in their respective barges, for which reason they are given living quarters therein as well as
subsistence allowance of P1.50 per day during the time they are on board. However, upon prior authority of their
superior officers, they may leave their barges when said barges are idle.

24
On April 15, 1957, 39 crew members of petitioner's tugboat service, including therein respondent Dominador
Malondras, filed with the Industrial Court a complaint for the payment of overtime compensation (Case No. 1059-V).
In the course of the proceeding, the parties entered into a stipulation of facts wherein the NASSCO recognized and
admitted
4. That to meet the exigencies of the service in the performance of the above work, petitioners have to work
when so required in excess of eight (8) hours a day and/or during Sundays and legal holidays (actual
overtime service is subject to determination on the basis of the logbook of the vessels, time sheets and other
pertinent records of the respondent).
xxx

xxx

xxx

6. The petitioners are paid by the respondent their regular salaries and subsistence allowance, without
additional compensation for overtime work;
Pursuant to the above stipulation, the Industrial Court, on November 22, 1957, issued an order directing the court
examiner to compute the overtime compensation due the claimants.
On February 14, 1958, the court examiner submitted his report covering the period from January 1 to December 31,
1957. In said report, the examiner found that the petitioners in Case No. 1058-V, including herein respondent
Dominador Malondras, rendered an average overtime service of five (5) hours each day for the period
aforementioned, and upon approval of the report by the Court, all the claimants, including Malondras, were paid
their overtime compensation by the NASSCO.
Subsequently, on April 30, 1958, the court examiner submitted his second partial report covering the period from
January 1, 1954 to December 31, 1956, again giving each crewman an average of five (5) overtime hours each day.
Respondent Malondras was not, however, included in this report as his daily time sheets were not then available.
Again upon approval by the Court, the crewmen concerned were paid their overtime compensation.
Because of his exclusion from the second report of the examiner, and his time sheets having been located in the
meantime, Dominador Malondras, on September 18, 1959, filed petitions in the same case asking for the
compensation and payment of his overtime compensation for the period from January 1, 1954 to December 31,
1956, and from January to April 30, 1957 which, he alleged, was not included in the first report of the examiner
because his time sheets for these months could not be found at the time. Malondras' petition was opposed by the
NASSCO upon the argument, among others, that its records do not indicate the actual number of working hours
rendered by Malondras during the periods in question. Acting on the petition and opposition, the Industrial Court
ordered the examiner to examine the log books, daily time sheets, and other pertinent records of the corporation for
the purpose of determining and computing whatever overtime service Malondras had rendered from January 1,
1954 to December 31, 1956.
On January 15, 1960, the chief examiner submitted a report crediting Malondras with a total of 4,349 overtime hours
from January 1, 1954 to December 31, 1956, at an average of five (5) overtime hours a day, and after deducting the
aggregate amount of subsistence allowance received by Malondras during this period, recommended the payment
to him of overtime compensation in the total sum of P2,790.90.
On February 20, 1960, the Court ordered the examiner to make a re-examination of the records with a view to
determining Malondras' overtime service from January 1, 1954 to December 31, 1956, and from January 1, 1957 to
April 30, 1957, but without deducting from the compensation to be paid to him his subsistence allowance. Pursuant
to this last order, the examiner, on April 23, 1960, submitted an amended report giving Malondras an average of
sixteen (16) overtime hours a day, on the basis of his time sheets, and recommending the payment to him of the
total amount of P15,242.15 as overtime compensation during the periods covered by the report. This report was,
over the NASSCO's vigorous objections, approved by the Court below on May 6, 1960. The NASSCO moved for

25
reconsideration, which was denied by the Court en banc, with one judge dissenting. Whereupon, the NASSCO
appealed to this Court.
There appears to be no question that respondent Malondras actually rendered overtime services during the periods
covered by the examiner's report. This is admitted in the stipulation of facts of the parties in Case No. 1058-V; and it
was on the basis of this admission that the Court below, in its order of November 22, 1957, ordered the payment of
overtime compensation to all the petitioners in Case No. 1058-V, including respondent Dominador Malondras, after
the overtime service rendered by them had been determined and computed on the basis of the log books, time
sheets and other pertinent records of the petitioner corporation.
The only matter to be determined here is, therefore, the number of hours of overtime for which Malondras should be
paid for the periods January 1, 1954 to December 31, 1956, and from January to April 30, 1957. Respondents urge
that this is a question of fact and not subject to review by this Court, there being sufficient evidence to support the
Industrial Court's ruling on this point. It appears, however, that in crediting Malondras with 16 hours of overtime
service daily for the periods in question, the court examiner relied only on his daily time sheets which, although
approved by petitioner's officers in charge and its auditors, do not show the actual number of hours of work
rendered by him each day but only indicate, according to the examiner himself, that:
almost everyday Dominador Malondras was on "Detail" or "Detailed on Board". According to the officer in
charge of Dominador Malondras, when he (Dominador Malondras) was on "Detail" or "Detailed on Board",
he was in the boat for twenty-four (24) hours.
In other words, the court examiner interpreted the words "Detail" or "Detailed on Board" to mean that as long as
respondent Malondras was in his barge for twenty-four hours, he should be paid overtime for sixteen hours a day or
the time in excess of the legal eight working hours that he could not leave his barge. Petitioner NASSCO, upon the
other hand, argues that the mere fact that Malondras was required to be on board his barge all day so that he could
immediately be called to duty when his services were needed does not imply that he should be paid overtime for
sixteen hours a day, but that he should receive compensation only for the actual service in excess of eight hours
that he can prove. This question is clearly a legal one that may be reviewed and passed upon by this
Court.lawphil.net
We can not agree with the Court below that respondent Malondras should be paid overtime compensation for every
hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of
whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the
very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free
living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our
law to require their employers to pay them overtime even when they are not actually working; otherwise, every sailor
on board a vessel would be entitled to overtime for sixteen hours each day, even if he had spent all those hours
resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not
sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the
regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. We
have ruled to that effect in Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union, et al., L-9265, April 29,
1957:
I. Is the definition for "hours of work" as presently applied to dryland laborers equally applicable to seamen?
Or should a different criterion be applied by virtue of the fact that the seaman's employment is completely
different in nature as well as in condition of work from that of a dryland laborer?
xxx

xxx

xxx

Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:

26
"SEC. 1. The legal working day for any person employed by another shall be of not more than eight
hours daily. When the work is not continuous, the time during which the laborer is not working AND
CAN LEAVE HIS WORKING PLACE and can rest completely, shall not be counted."
The requisites contained in this section are further implemented by contemporary regulations issued by
administrative authorities (Sections 4 and 5 of Chapter III, Article 1, Code of Rules and Regulations to
implement the Minimum Wage Law).
For the purposes of this case, we do not need to set for seamen a criterion different from that applied to
laborers on land, for under the provisions of the above quoted section, the only thing to be done is to
determine the meaning and scope of the term "working place" used therein. As we understand this term,
alaborer need not leave the premises of the factory shop or boat in order that his period of rest shall not be
counted, it being enough that he "cease to work", may rest completely and leave or may leave at his will the
spot where he actually stays while working, to go somewhere else, whether within or outside the premises
of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be
counted. (Emphasis supplied)
While Malondras' daily time sheets do not show his actual working hours, nevertheless, petitioner has already
admitted in the Stipulation of Facts in this case that Malondras and his co-claimants did render service beyond eight
(8) hours a day when so required by the exigencies of the service; and in fact, Malondras was credited and already
paid for five (5) hours daily overtime work during the period from May 1 to December 31, 1957, under the examiner's
first report. Since Malondras has been at the same job since 1954, it can be reasonably inferred that the overtime
service he put in whenever he was required to be aboard his barge all day from 1954 to 1957 would be more or less
consistent. In truth, the other claimants who served with Malondras under the same conditions and period have
been finally paid for an overtime of 5 hours a day, and no substantial difference exists between their case and the
present one, which was not covered by the same award only because Malondras' time records not found until later.
The next question is whether or not the subsistence allowance received by Malondras for the periods covered by
the report in question should be deducted from his overtime compensation. We do not think so, for the Stipulation of
the Facts of the parties show that this allowance is independent of and has nothing to do with whatever additional
compensation for overtime work was due the petitioner NASSCO's bargemen. According to the petitioner itself, the
reason why their bargemen are given living quarters in their barges and subsistence allowance at the rate of P1.50
per day was because they were required to stay in their respective barges in order that they could be immediately
called to duty when their services were needed (Petition, par. 5, p. 2). Petitioner having already paid Malondras and
his companions overtime for 1957 without deduction of the subsistence allowances received by them during this
period, and Malondras' companions having been paid overtime for the other years also without deducting their
subsistence allowances, there is no valid reason why Malondras should be singled out now and his subsistence
allowance deducted from the overtime compensation still due him.
The last question involves petitioner's claim that it was error for the examiner to base Malondras' overtime
compensation for the whole year 1954 at P6.16 a day, when he was appointed in the tubgoat service only on
October 1, 1954, and before that was a derrick man with a daily salary of P6.00. In answer, respondent Malondras
asserts that the report of the examiner, based on his time sheets from January 1, 1954, show that he had already
been rendering overtime service from that date. This answer does not, however, deny that Malondras started to get
P6.16 a day only in October, 1954, and was before that time receiving only P6.00 daily, as claimed by petitioner. We
think, therefore, that the records should be reexamined to find out Malondras' exact daily wage from January 1,
1954 to September, 1954, and his overtime compensation for these months computed on the basis thereof.
WHEREFORE, the order appealed from is modified in the sense that respondent Malondras should be credited five
(5) overtime hours instead of sixteen (16) hours a day for the periods covered by the examiner's report. The court
below is ordered to determine from the records the exact daily wage received by respondent Malondras from
January 1, 1954 to September, 1954, and to compute accordingly his overtime compensation for that period. In all
other respects, the judgment appealed from is affirmed. No costs in this instance. So ordered.

27

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 andwork on the
employee's one "Day of Rest," shall be considered a special work day, during which "Day of Rest" rates of
pay shall be paid as provided in Annex B. Daily working schedules shall be established by management in
accordance with the requirements of efficient operations on the basis of eight (8) hours per day for any five
(5) days. Provided, however employees required to work in excess of forty (40) hours in any week shall be
compensated in accordance with Annex B of this
Agreement. 1 (Emphasis supplied).
Pertinent portions of Annex "B" of the 1985 CBA are also quoted here as follows:
Annex "B"
Computation of:
Regular Day Pay
Overtime Pay
Night Shift Differential Pay
Day Off Pay
Excess of 40 hours within a calendar week
Sunday Premium Pay
Holiday Premium Pay
Employee's Basic Hourly Wage Rate:

28
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)

29
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) ]

30
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) ]

31
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.

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 dayoff 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.

32
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

33
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.

34
An annex expresses the idea of joining a smaller or subordinate thing with another, larger or of higher
importance. 8 An annex has a subordinate role, without any independent significance separate from that to which it is
tacked on. Annex "B," in the case at bar, is one such document. It is not a memorandum of amendments or a codicil
containing additional or new terms or stipulations. Annex "B" cannot be construed as modifying or altering the terms
expressed in the body of the agreement contained in the 1985 CBA. It did not confer any rights upon employees
represented by petitioner Union; neither did it impose any obligations upon private respondent Caltex. In fact, the
contents of Annex "B" have no intelligible significance in and of themselves when considered separately from the
1985 CBA.
Moreover, we are persuaded by private respondent's argument that Annex "B" was intended to serve as acompany
wide guide in computing compensation for work performed by all its employees, including but not limited to the
Manila Office employees represented by petitioner Union. Private respondent also points out that the mathematical
formulae contained in Annex "B" are not all applicable to all classes of employees, there being some formulae
applicable only to particular groups or classes of employees. Thus, "First Day-off rates" and "Second Day-off rates"
are applicable only to employees stationed at the refinery and associated facilities like depots and terminals which
must be in constant twenty-four (24) hours a day, seven (7) days a week, operation, hence necessitating the
continuous presence of operations personnel. The work of such operations personnel required them to be on duty
for six (6) consecutive days. Upon the other hand, "First Day-off rates" and "Second Day-off rates"
are not applicable to personnel of the Manila Office which consisted of other groups or categories of employees
(e.g., office clerks, librarians, computer operators, secretaries, collectors, etc.), 9 since the nature of their work did
not require them to be on duty for six (6) consecutive days.
We find, under the foregoing circumstances, that the purported intention inferred from Annex "B" by the Labor
Arbiter was based merely on conjecture and speculation.
We also note that the Labor Arbiter merely suspected that the parties agreed to provide two (2) days of rest on the
ground that they had so stipulated in their 1970 CBA. 10 A principal difficulty with this view is that it disregards the
fact that Article III of the 1985 CBA no longer contained a particular proviso found in the 1970 CBA. In fact, all the
CBAs subsequent to 1970 (1973, 1976, 1979, 1982) had similarly deleted the proviso in the 1970 CBA providing for
two (2) days-off. To the Court's mind, such deletion means only one thing that is the parties had agreed to
remove such stipulation. Accordingly, the proviso found in Article III of the 1970 CBA ceased to be a demandable
obligation. Petitioner Union cannot now unilaterally re-insert such a stipulation by strained inference from Annex "B."
Upon the foregoing circumstances, we must hold that the Labor Arbiter's suspicion is without basis in the facts of
record.
Petitioner Union also contended that private respondent Caltex in the instant petition was violating the statutory
prohibition against off-setting undertime for overtime work on another day. 11 Union counsel attempted to establish
this charge by asserting that the employees had been required to render "overtime work" on a Saturday but
compensated only at regular rates of pay, because they had not completed the eight (8)-hour work period daily from
Monday thru Friday.
The Court finds petitioner's contention bereft of merit. Overtime work consists of hours worked on a given day in
excess of the applicable work period, which here is eight (8) hours. 12 It is not enough that the hours worked fall on
disagreeable or inconvenient hours. In order that work may be considered as overtime work, the hours worked must
be in excess of and in addition to the eight (8) hours worked during the prescribed daily work period, or the forty (40)
hours worked during the regular work week Monday thru Friday.
In the present case, under the 1985 CBA, hours worked on a Saturday do not, by that fact alone, necessarily
constitute overtime work compensable at premium rates of pay, contrary to petitioner's assertion. These are normal
or regular work hours, compensable at regular rates of pay, as provided in the 1985 CBA; under that CBA, Saturday
is not a rest day or a "day off". It is only when an employee has been required on a Saturday to render work in
excess of the forty (40) hours which constitute the regular work week that such employee may be considered as

35
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.

G.R. Nos. 85122-24

March 22, 1991

JULIO N. CAGAMPAN, SILVINO C. VICERA, JORGE C. DE CASTRO, JUANITO R. DE JESUS, ARNOLD J.

MIRANDA, , MAXIMO O. ROSELLO & ANICETO L. BETANA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, & ACE MARITIME AGENCIES, INC., respondents.
Benjamin S. David for petitioners.
De Luna, Sumnoad and Gaerlan for private respondent.
PARAS, J.:
Presented before Us for review is the decision of public respondent National Labor Relations Commission handed
down on March 16, 1988 reversing the decision of the Philippine Oversees Employment Administration and

36
correspondingly dismissing the cases for lack of merit. The POEA decision granted overtime pay to petitioners
equivalent to 30% of their basic pay.
We do not dispute the facts as found by the Solicitor General. Thus:
On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts of employment with the
Golden Light Ocean Transport, Ltd., through its local agency, private respondent ACE MARITIME
AGENCIES, INC. Petitioners, with their respective ratings and monthly salary rates, are as follows:
Petitioners

Rating

Salary per month

Julio Cagampan

2nd Engineer

US$500.00

Silvino Vicera

2nd Engineer

US$800.00

Juanito de Jesus

Ordinary Seaman

US$120.00

Jorge C. de Castro

Ordinary Seaman

US$160.00

Arnold Miranda

3rd Officer

US$310.00

Maximo Rosello

Cook

US$230.00

Aniceto Betana

3rd Engineer

US$400.00

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

37
7. Maximo RoselloUS$303.33 plus US$1,105.00 representing the 30% guaranteed overtime pay; and
8. Aniceto BetanaUS$583.33 plus US$2,125.00 representing the 30% guaranteed overtime pay.
The payments represent their leave pay equivalent to their respective salary (sic) of 35 days and should be
paid in Philippine currency at the current rate of exchange at the time of actual payment. (pp. 81-82,
Records)
Private respondent appealed from the POEA's Decision to the NLRC on August 24, 1987. On March 16, 1988, the
NLRC promulgated a Decision, the dispositive portion of which reads:
WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET ASIDE and
another one entered dismissing these cases for lack of merit. (p. 144, Records)
On May 8, 1988, petitioners filed an Urgent Motion for Reconsideration of the NLRC's Decision (p. 210, Records),
but the same was denied by the NLRC for lack of merit in its Resolution dated September 12, 1988 (p. 212,
Records).
Hence, this appeal from the decision and resolution of the respondent NLRC.
Petitioners allege that respondent Commission gravely abused its discretion or erred in deciding in favor of private
respondent company by reason of the following:
1. Respondent NLRC overlooked the fact that private respondent company had repeatedly failed and
refused to file its answer to petitioners' complaints with their supporting documents.
2. Respondent Commission erred in reversing and setting aside the POEA decision and correspondingly
dismissing the appeal of petitioners, allegedly in contravention of law and jurisprudence.
Private respondent maritime company disclaims the aforesaid allegations of petitioners through these arguments:
1. As borne out by the records, its former counsel attended all the hearings before the POEA wherein he
raised the basis objection that the complaint of petitioners was so generally couched that a more detailed
pleading with supporting documents was repeatedly requested for the latter to submit.
2. The NLRC never abused its discretion in arriving at assailed decision considering that the same was
based on the Memorandum on Appeal dated August 14, 1987 filed by private respondent.
3. In the hearings conducted by respondent Commission, all the arguments of both parties were properly
ventilated and considered by said Commission in rendering its decision.
4. The Labor Code basically provides that the rules of evidence prevailing in courts of law or equity shall not
be controlling and it is the spirit and intention of the Code that the Commission and its members and Labor
Arbiters should use every and an reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law and procedure, all in the interest of due process.
5. Petitioners' motion for reconsideration of the NLRC decision did not invoke the merits of the case but
merely raised purely technical and procedural matters. Even assuming that private respondent, technically
speaking, waived the presentation of evidence, its appeal to the NLRC was valid since it involved merely a
correct interpretation and clarification of certain provisions of the contract the validity of which has never
been questioned.
The Solicitor General, arguing for public respondent NLRC, contends:

38
1. Petitioners' assumption that a party who is declared to have waived his right to present evidence also
loses his right to appeal from an adverse judgment made against him is a falsity for, although the technical
rules of evidence prevailing in the courts of law or equity do not bind labor tribunals, even the Rules of Court
allows a party declared in default to appeal from said judgment by attaching the propriety of the relief
awarded therein.
2. The NLRC did not abuse its discretion in the rendition of subject decision because the evidence
presented by petitioners in support of their complaint is by itself sufficient to back up the decision. The issue
of the disallowance of overtime pay stems from an interpretation of particular provisions of the employment
contract.
We cannot sustain petitioners' position.
The failure of respondent to submit its responsive pleading was not fatal as to invalidate its case before the Phil.
Overseas Employment Authority. Evidently, such formal or technical defect was rectified by the fact that the POEA
proceeded with the hearings on the case where both parties were given sufficient leeway to ventilate their cases.
Petitioners' manifest pursuit of their claims before the POEA in the absence of the answer produced the effect of
condoning the failure of private respondent to submit the said answer. Their submission to the POEA's authority
without questioning its jurisdiction to continue the hearings further strengthens the fact that the alleged technical
defect had already been cured. After all, what is there to complain of when the POEA handed down a decision
favorable to petitioners with the allowance of the latter's leave pay and overtime pay.
Notably, it was only when private respondent appealed the NLRC decision to this Court that petitioners suddenly
unearth the issue of private respondent's default in the POEA case. Had the decision favoring them not been
reversed by the NLRC, petitioners could have just clammed up. They resorted to bringing up a technical, not a
substantial, defect in their desperate attempt to sway the Court's decision in their favor.
Private respondent has pointedly argued that the NLRC anchored its decision primarily upon the Memorandum on
Appeal.1wphi1 In the case of Manila Doctors Hospital v. NLRC (153 SCRA 262) this Court ruled that the National
Labor Relations Commission and the Labor Arbiter have authority under the Labor Code to decide a case based on
the position papers and documents submitted without resorting to the technical rules of evidence.
On the issue of whether or not petitioners should be entitled to terminal pay, We sustain the finding of respondent
NLRC that petitioners were actually paid more than the amounts fixed in their employment contracts. The pertinent
portion of the NLRC decision reads as follows.
On this award for leave pay to the complainants (petitioners), the (private) respondent maintains that the
actually they were paid much more than what they were legally entitled to under their contract. This fact has
not been disputed by the complainants (petitioners.) Thus, as mentioned in (private) respondent's
Memorandum on Appeal dated 14 August 1987, their overpayment is more than enough and sufficient to
offset whatever claims for leave pay they filed in this case and for which the POEA favorably considered in
their favor. For complainant (petitioner) Aniceto Betana, it appears that under the crew contract his monthly
salary was US$400 while he was overpaid by US$100 as he actually received US$500. In fine, Betana had
received at least US1,400 excess salary for a period of fourteen (14) months which was the period of his
employment. In the case of complainant (petitioner) Jorge C. de Castro his stipulated monthly pay was
US$160 but he actually received a monthly pay of US$200 or an overpayment of US$560 for the same
period of service. For complainant (petitioner) Juanito R. de Jesus, his overpayment is US$1120.
Complainant (petitioner) Arnold J. Miranda has also the same amount of excess payment as de Jesus.
Indeed, We cannot simply ignore this material fact. It is our duty to prevent a miscarriage of justice for if We
sustain the award for leave pay in the face of undisputed facts that the complainants (petitioners) were even
paid much more than what they should receive by way of leave pay, then they would be enriching
themselves at the expense of others. Accordingly, justice and equity compel Us to deny this award.

39
Even as the denial of petitioners' terminal pay by the NLRC has been justified, such denial should not have been
applied to petitioners Julio Cagampan and Silvino Vicera. For, a deeper scrutiny of the records by the Solicitor
General has revealed that the fact of overpayment does not cover the aforenamed petitioners since the amounts
awarded them were equal only to the amounts stipulated in the crew contracts. Since petitioners Cagampan and
Vicera were not overpaid by the company, they should be paid the amounts of US$583.33 and US$933.33,
respectively. Further examination by the Solicitor General shows that petitioner Maximo Rosello was also overpaid
in the amount of US$420.00.
Hence, with respect to petitioners Cagampan and Vicera, the NLRC decision must be modified correspondingly.
As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the payment of said pay
because it merely straightened out the distorted interpretation asserted by petitioners and defined the correct
interpretation of the provision on overtime pay embodied in the contract conformably with settled doctrines on the
matter. Notably, the NLRC ruling on the disallowance of overtime pay is ably supported by the fact that petitioners
never produced any proof of actual performance of overtime work.
Petitioners have conveniently adopted the view that the "guaranteed or fixed overtime pay of 30% of the basic
salary per month" embodied in their employment contract should be awarded to them as part of a "package benefit."
They have theorized that even without sufficient evidence of actual rendition of overtime work, they would
automatically be entitled to overtime pay. Their theory is erroneous for being illogical and unrealistic. Their thinking
even runs counter to the intention behind the provision. The contract provision means that the fixed overtime pay of
30% would be the basis for computing the overtime pay if and when overtime work would be rendered. Simply,
stated, the rendition of overtime work and the submission of sufficient proof that said work was actually performed
are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the
basis of 30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the
entitlement to such benefit must first be established. Realistically speaking, a seaman, by the very nature of his job,
stays on board a ship or vessel beyond the regular eight-hour work schedule. For the employer to give him overtime
pay for the extra hours when he might be sleeping or attending to his personal chores or even just lulling away his
time would be extremely unfair and unreasonable.
We already resolved the question of overtime pay of a worker aboard a vessel in the case of National Shipyards
and Steel Corporation v. CIR (3 SCRA 890). We ruled:
We can not agree with the Court below that respondent Malondras should be paid overtime compensation
for every hour in excess of the regular working hours that he was on board his vessel or barge each day,
irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on
board their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular
compensation, they are given free living quarters and subsistence allowances when required to be on board.
It could not have been the purpose of our law to require their employers to pay them overtime even when
they are not actually working; otherwise, every sailor on board a vessel would be entitled to overtime for
sixteen hours each day, even if he spent all those hours resting or sleeping in his bunk, after his regular tour
of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not,
therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day,
but whether they actually rendered service in excess of said number of hours. (Emphasis supplied)
The aforequoted ruling is a reiteration of Our resolution in Luzon Stevedoring Co., Inc. vs. Luzon Marine
Department Union, et al. (G.R. No. 9265, April 29, 1957).
WHEREFORE, the decision of the NLRC is hereby AFFIRMED with the modification that petitioners Cagampan and
Vicera are awarded their leave pay according to the terms of the contract.
SO ORDERED.

40
G.R. No. 121004 January 28, 1998
ROMEO LAGATIC, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, CITYLAND DEVELOPMENT CORPORATION, STEPHEN
ROXAS, JESUS GO, GRACE LIUSON, and ANDREW LIUSON, respondents.

ROMERO, J.:
Petitioner seeks, in this petition for certiorari under Rule 65, the reversal of the resolution of the National Labor
Relations Commission dated May 12, 1995, affirming the February 17, 1994, decision of Labor Arbiter Ricardo C.
Nora finding that petitioner had been validly dismissed by private respondent Cityland Development Corporation
(hereafter referred to as Cityland) and that petitioner was not entitled to separation pay, premium pay and overtime
pay.
The facts of the case are as follows:
Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first as a probationary sales agent, and later on
as a marketing specialist. He was tasked with soliciting sales for the company, with the corresponding duties of
accepting call-ins, referrals, and making client calls and cold calls. Cold calls refer to the practice of prospecting for
clients through the telephone directory. Cityland, believing that the same is an effective and cost-efficient method of
finding clients, requires all its marketing specialists to make cold calls. The number of cold calls depends on the
sales generated by each: more sales mean less cold calls. Likewise, in order to assess cold calls made by the sales
staff, as well as to determine the results thereof, Cityland requires the submission of daily progress reports on the
same.
On October 22, 1991, Cityland issued a written reprimand to petitioner for his failure to submit cold call reports for
September 10, October 1 and 10, 1991. This notwithstanding, petitioner again failed to submit cold call reports for
September 2, 5, 8, 10, 11, 12, 15, 17, 18, 19, 20, 22, and 28, as well as for October 6, 8, 9, 10, 12, 13 and 14, 1992.
Petitioner was required to explain his inaction, with a warning that further non-compliance would result in his
termination from the company. In a reply dated October 18, 1992, petitioner claimed that the same was an honest
omission brought about by his concentration on other aspects of his job. Cityland found said excuse inadequate
and, on November 9, 1992, suspended him for three days, with a similar warning.
Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit cold call reports for
February 5, 6, 8, 10 and 12, 1993. He was verbally reminded to submit the same and was even given up to
February 17, 1993 to do so. Instead of complying with said directive, petitioner, on February 16, 1993, wrote a note,
"TO HELL WITH COLD CALLS! WHO CARES?" and exhibited the same to his co-employees. To worsen matters,
he left the same lying on his desk where everyone could see it.
On February 23, 1993, petitioner received a memorandum requiring him to explain why Cityland should not make
good its previous warning for his failure to submit cold call reports, as well as for issuing the written statement
aforementioned. On February 24, 1993, he sent a letter-reply alleging that his failure to submit cold call reports
should trot be deemed as gross insubordination. He denied any knowledge of the damaging statement, "TO HELL
WITH COLD CALLS!"
Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon him on February 26,
1993. Aggrieved by such dismissal, petitioner filed a complaint against Cityland for illegal dismissal, illegal
deduction, underpayment, overtime and rest day pay, damages and attorney's fees. The labor arbiter dismissed the
petition for lack of merit. On appeal, the same was affirmed by the NLRC; hence the present recourse.
Petitioner raises the following issues:

41
1. WHETHER OR NOT RESPONDENT NLRC GRAVELY ABUSED ITS
DISCRETION 1N NOT FINDING THAT PETITIONER WAS ILLEGALLY DISMISSED;
2. WHETHER OR NOT RESPONDENT NLRC GRAVELY ABUSED ITS
DISCRETION IN RULING THAT PETITIONER IS NOT ENTITLED TO SALARY
DIFFERENTIALS, BACKWAGES, SEPARATION PAY, OVERTIME PAY, REST DAY
PAY, UNPAID COMMISSIONS, MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY'S FEES.
The petition lacks merit.
To constitute a valid dismissal from employment, two requisites must be met, namely: (1) the employee must be
afforded due process, and (2) the dismissal must be for a valid cause. 1 In the case at bar, petitioner contends that
his termination was illegal on both substantive and procedural aspects. It is his submission that the failure to submit
a few cold calls does not qualify as willful disobedience, as, in his experience, cold calls are one of the least
effective means of soliciting sales. He thus asserts that a couple of cold call reports need not be accorded such
tremendous significance as to warrant his dismissal for failure to submit them on time.
These arguments are specious. Petitioner loses sight of the fact that "(e)xcept as provided for, or limited by, special
laws, an employer is free to regulate, according to his discretion and judgment, all aspects of
employment." 2 Employers may, thus, make reasonable rules and regulations for the government of their employees,
and when employees, with knowledge of an established rule, enter the service, the rule becomes a part of the
contract of employment. 3 It is also generally recognized that company policies and regulations, unless shown to be
grossly oppressive or contrary to law, are generally valid and binding on the parties and must be complied
with. 4 "Corollarily, an employee may be validly dismissed for violation of a reasonable company rule or regulation
adopted for the conduct of the company business. An employer cannot rationally be expected to retain the
employment of a person whose . . . lack of regard for his employer's rules . . . has so plainly and completely been
bared." 5 Petitioner's continued infraction of company policy requiring cold call reports, as evidenced by the 28
instances of non-submission of aforesaid reports, justifies his dismissal. He cannot be allowed to arrogate unto
himself the privilege of setting company policy on the effectivity of solicitation methods. To do so would be to
sanction oppression and the self-destruction of the employer.
Moreover, petitioner made it worse for himself when he wrote the statement, "TO HELL WITH COLD CALLS! WHO
CARES?" When required to explain, he merely denied ally knowledge of the same. Cityland, on the other hand,
submitted the affidavits of his co-employees attesting to his authorship of the same. Petitioner's only defense is
denial. The rule, however, is that denial, if unsubstantiated by clear and convincing evidence, is negative and selfserving evidence which has no weight in law. 6 More telling, petitioner, while making much capital out of his lack of
opportunity to confront the affiants, never, in all of his pleadings, categorically denied writing the same. He only
denied knowledge of the allegation that he issued such a statement.
Based on the foregoing, we find petitioner guilty of willful disobedience. Willful disobedience requires the
concurrence of at least two requisites: the employee's assailed conduct must have been willful or intentional, the
willfulness being characterized by a wrongful and perverse attitude; and the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to
discharge. 7
Petitioner's failure to comply with Cityland's policy of requiring cold call reports is clearly willful, given the 28
instances of his failure to do so, despite a previous reprimand and suspension. More than that, his written statement
shows his open defiance and disobedience to lawful rules and regulations of the company. Likewise, said company
policy of requiring cold calls and the concomitant reports thereon is clearly reasonable and lawful, sufficiently known
to petitioner, and in connection with the duties which he had been engaged to discharge. There is, thus, just cause
for his dismissal.
On the procedural aspect, petitioner claims that he was denied due process. Well settled is the dictum that the twin
requirements of notice and hearing constitute the elements of due process in the dismissal of employees. Thus, the
employer must furnish the employee with two written notices before the termination of employment can be effected.

42
The first apprises the employee of the particular acts or omissions for which his dismissal is sought; the second
informs him of the employer's decision to dismiss him. 8
In the case at bar, petitioner was notified of the charges against him in a memorandum dated February 19, 1993,
which he received on February 23, 1993. He submitted a letter-reply thereto on February 24, 1993, wherein he
asked that his failure to submit cold call reports be not interpreted as gross insubordination. 9 He was given notice of
his termination on February 26, 1993. This chronology of events clearly show that petitioner was served with the
required written notices.
Nonetheless, petitioner contends that he has not been given the benefit of an effective hearing. He alleges that he
was not adequately informed of the results of the investigation conducted by the company, nor was he able to
confront the affiants who attested to his writing the statement, "TO HELL WITH COLD CALLS!" While we have held
that in dismissing employees, the employee must be afforded ample opportunity to be heard, "ample opportunity"
connoting every kind of assistance that management must afford the employee to enable him to prepare adequately
for his defense, 10 it is also true that the requirement of a hearing is complied with as long as there was an
opportunity to be heard, and not necessarily that an actual hearing be conducted. 11 Petitioner had an opportunity to
be heard as he submitted a letter-reply to the charge. He, however, adduced no other evidence on his behalf. In
fact, he admitted his failure to submit cold call reports, praying that the same be not considered as gross
insubordination. As held by this Court in Bernardo vs. NLRC, 12 there is no necessity for a formal hearing where an
employee admits responsibility for an alleged misconduct. As to the written statement, "TO HELL WITH COLD
CALLS!," petitioner merely denied knowledge of the same. He failed to submit controverting evidence thereon
although the memorandum of February 19, 1993, clearly charged that he had shown said statement to several sales
personnel. Denials are weak forms of defenses, particularly when they are not substantiated by clear and
convincing evidence. Given the foregoing, we hold that petitioner's constitutional right to due process has not been
violated.
As regards the second issue, petitioner contends that he is entitled to amounts illegally deducted from his
commissions, to unpaid overtime, rest day and holiday premiums, to moral and exemplary damages, as well as
attorney's fees and costs.
Petitioner anchors his claim for illegal deductions of commissions on Cityland's formula for determining
commissions, viz:
COMMISSIONS = Credits Earned (CE) less CUMULATIVE NEGATIVE
(CN) less AMOUNTS RECEIVED (AR)
= (CE - CN) - AR where CE = Monthly Sales Volume x
Commission Rate (CR)
AR = Monthly Compensation/.75
CR = 4.5%
Under said formula, an increase in salary would entail an increase in AR, thus diminishing the amount of
commissions that petitioner would receive. Petitioner construes the same as violative of the non-diminution of
benefits clause embodied in the wage orders applicable to petitioner. Inasmuch as Cityland has paid petitioner
commissions based on a higher AR each time there has been a wage increase, the difference between the original
AR and the subsequent ARs have been viewed by petitioner as illegal deductions, to wit:

Wage
Order

Date of
Effectivity

Amount of
Increase

Corresponding
Increase in
Quota (AR)

Duration
Up To
2/26/93

Total

43

RA 6640

1/1/88

P265.75

P 353.33

62 mos.

P 2 1,906.46

RA 6727

7/1/89

780.75

1,040.00

44 mos.

45,760.00

NCR 01

11/1/90

785.75

1,046.67

28 mos.

29,306.76

NCR 01-A

Grand Total

P 96,973.22 13

Petitioner even goes as far as to claim that with the use of Cityland's formula, he is indebted to the company in the
amount of P1,410.00, illustrated as follows:
Petitioner' s Basic Salary = P 4,230.00
= 4,230.00/.75
A.R. = 5,640.00
Petitioner's Basic Salary AR = P 1,410.00
While it is true that an increase in salary would cause an increase in AR, with the same being deducted from credits
earned, thus lessening his commissions, the fact remains that petitioner still receives his basic salary without
deductions. Petitioner's argument that he is indebted to respondent by P1,410.00 is fallacious as his basic salary
remains the same and he continues to receive the same, regardless of his collections. The failure to attain a CE
equivalent to the AR of P5,640.00 only means that the difference would be credited to his CN for the next month.
Clearly, the purpose of the same is to encourage sales personnel to accelerate their sales in order for them to earn
commissions.
Additionally, there is no law which requires employers to pay commissions, and when they do so, as stated in the
letter-opinion of the Department of Labor and Employment dated February 19, 1993, "there is no law which
prescribes a method for computing commissions. The determination of the amount of commissions is the result of
collective bargaining negotiations, individual employment contracts or established employer practice." 14 Since the
formula for the computation of commissions was presented to and accepted by petitioner, such prescribed formula
is in order. As to the allegation that said formula diminishes the benefits being received by petitioner whenever there
is a wage increase, it must be noted that his commissions are not meant to be in a fixed amount. In fact, there was
no assurance that he would receive any commission at all. Non-diminution of benefits, as applied here, merely
means that the company may not remove the privilege of sales personnel to earn a commission, not that they are
entitled to a fixed amount thereof.
With respect to petitioner's claims for overtime pay, rest day pay and holiday premiums, Cityland maintains that
Saturday and Sunday call-ins were voluntary activities on the part of sales personnel who wanted to realize more
sales and thereby earn more commissions. It is their contention that sales personnel were clamoring for the
"privilege" to attend Saturday and Sunday call-ins, as well as to entertain walk-in clients at project sites during
weekends, that Cityland had to stagger the schedule of sales employees to give everyone a chance to do so. But
simultaneously, Cityland claims that the same were optional because call-ins and walk-ins were not scheduled every
weekend. If there really were a clamor on the part of sales staff to "voluntarily" work on weekends, so much so that
Cityland needed to schedule them, how come no call-ins or walk-ins were scheduled on some weekends?

44
In addition to the above, the labor arbiter and the NLRC sanctioned respondent's practice of offsetting rest day or
holiday work with equivalent time on regular workdays on the ground that the same is authorized by Department
Order 21, Series of 1990. As correctly pointed out by petitioner, said D.O. was misapplied in this case. The D.O.
involves the shortening of the workweek from six days to five days but with prolonged hours on those five days.
Under this scheme, non-payment of overtime premiums was allowed in exchange for longer weekends for
employees. In the instant case, petitioner's workweek was never compressed. Instead, he claims payment for work
over and above his normal 5 1/2 days of work in a week. Applying by analogy the principle that overtime cannot be
offset by undertime, to allow off-setting would prejudice the worker. He would be deprived of the additional pay for
the rest day work he has rendered and which is utilized to offset his equivalent time off on regular workdays. To
allow Cityland to do so would be to circumvent the law on payment of premiums for rest day and holiday work.
Notwithstanding the foregoing discussion, petitioner failed to show his entitlement to overtime and rest day pay due,
to the lack of sufficient evidence as to the number of days and hours when he rendered overtime and rest day work.
Entitlement to overtime pay must first be established by proof that said overtime work was actually performed,
before an employee may avail of said benefit. 15 To support his allegations, petitioner submitted in evidence minutes
of meetings wherein he was assigned to work on weekends and holidays at Cityland's housing projects. Suffice it to
say that said minutes do not prove that petitioner actually worked on said dates. It is a basic rule in evidence that
each party must prove his affirmative allegations. 16 This petitioner failed to do. He explains his failure to submit
more concrete evidence as being due to the decision rendered by the labor arbiter without resolving his motion for
the production and inspection of documents in the control of Cityland. Petitioner conveniently forgets that on
January 27, 1994, he agreed to submit the case for decision based on the records available to the labor arbiter. This
amounted to an abandonment of above-said motion, which was then pending resolution.
Lastly, with the finding that petitioner's dismissal was for a just and valid cause, his claims for moral and exemplary
damages, as well as attorney's fees, must fail.
WHEREFORE, premises considered, the assailed Resolution is AFFIRMED and this petition is hereby DISMISSED
for lack of merit. Costs against petitioner.
SO ORDERED.