Working Conditions

Article 82
HOURS OF WORK
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.
"Field personnel" shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable
certainty.
1.
Omnibus Rules: book III, Rule I, Sections 1-2
SECTION 1. General statement on coverage. The provisions of
this Rule shall apply to all employees in all establishments and
undertakings, whether operated for profit or not, except to those
specifically exempted under Section 2 hereof.cralaw
SECTION 2. Exemption. The provisions of this Rule shall not
apply to the following persons if they qualify for exemption
under the conditions set forth herein:
(a) Government employees whether employed by the National
Government or any of its political subdivision, including those
employed in government-owned and/or controlled corporations;
(b) Managerial employees, if they meet all of the following
conditions:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or
sub-division thereof.cralaw
(2) They customarily and regularly direct the work of two or
more employees therein.cralaw
(3) They have the authority to hire or fire employees of lower
rank; or their suggestions and recommendations as to hiring and
firing and as to the promotion or any other change of status of
other employees, are given particular weight.cralaw
(c) Officers or members of a managerial staff if they perform the
following duties and responsibilities:
(1) The primary duty consists of the performance of work directly
related to management policies of their employer;
(2) Customarily and regularly exercise discretion and
independent judgment; and
(3) (i) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of
the establishment in which he is employed or subdivision
thereof; or (ii) execute under general supervision work along
specialized or technical lines requiring special training,
experience, or knowledge; or (iii) execute, under general
supervision, special assignments and tasks; and

(4) Who do not devote more than 20 percent of their hours

worked in a work week to activities which are not directly and
closely related to the performance of the work described in
paragraphs (1), (2) and (3) above.cralaw
(d) Domestic servants and persons in the personal service of
another if they perform such services in the employer's home
which are usually necessary or desirable for the maintenance
and enjoyment thereof, or minister to the personal comfort,
convenience, or safety of the employer as well as the members
of his employer's household.cralaw
(e) Workers who are paid by results, including those who are
paid on piece-work, "takay," "pakiao" or task basis, and other
non-time work if their output rates are in accordance with the
standards prescribed under Section 8, Rule VII, Book Three of
these regulations, or where such rates have been fixed by the
Secretary of Labor and Employment in accordance with the
aforesaid Section.cralaw
(f) Non-agricultural field personnel if they regularly perform their
duties away from the principal or branch office or place of
business of the employer and whose actual hours of work in the
field cannot be determined with reasonable certainty.cralaw
National Sugar Refineries Corp v. NLRC
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. Batangas refinery was privatized
Private respondent union represents the former supervisors of
the NASUREFCO Batangas Sugar Refinery,etitioner implemented
a Job Evaluation (JE) Program affecting all employees, from rankand-file to department heads
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. 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 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
petitioner NASUREFCO recognized herein respondent union
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 members
filed a complainant with the executive labor arbiter for nonpayment of overtime, rest day and holiday pay , Executive Labor
Arbiter pay the individual members of complainant overtime
pay, rest day pay and holiday pay enjoyed by them instead of
the P100.00 special allowance
On appeal 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
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.

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.

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

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.

I: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.
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"
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
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.
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. operation of their
respective departmentsmembers of respondent union discharge
duties and responsibilities which ineluctably qualify them as
officers or members of the managerial st
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.
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." positional submission was
never refuted nor controverted by respondent union in any of its
pleadings
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-andfile. 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. with
the promotion of the union members, they are no longer entitled
to the benefits which attach and pertain exclusively to their
positions.

2. San Miguel Brewery v. Democratic Labor Organization

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 company filed
its answer asked for the dismissal of the complaint. the union
manifested its desire to confine its claim to its demands for
overtime, night-shift differential pay
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
Presiding Judge Jose
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 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 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.
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.
WON entitled sa benefits provided by eight hour labor law.
ight-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
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.

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

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.
salesman, P215; Mariano Ruedas, a truck driver, P155; Alberto
Alpaza and Alejandro Empleo, truck helpers, P125 each,record
shows that these employees during the period of their
employment were paid sales commission
pending 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.
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
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
modifiedextra work performed by those employed in the outside
or field sales force is set aside award for night salary
differentials, is affirmed
3. Apex Mining Company v. NLRC
rivate respondent Sinclita Candida was employed by petitioner
Apex Mining Company perform laundry services at its staff house
located at Masara, Maco, Davao del Norte. she was paid on a
4.
piece rate basis 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 As a result of the accident she was not
able to continue with her work. She was permitted to go on
leave for medication.
persuade her to quit her job, but she refused the offer and
preferred to return to work. Petitioner did not allow her to return
to work and dismissed her private respondent filed a request for
assistance with the Department of Labor and Employment.
judgment is hereby rendered ordering the respondent, Apex
Mining Company,5 5petitioner appealed to the public respondent
National Labor Relations Commission (NLRC), dismissing the
appeal for lack of merit and affirming the appealed decision
WON Is the househelper in the staff houses of an industrial
company a domestic helper or a regular employee of the said
firm?
The petition is devoid of merit.
Book 3 of the Labor Code, as amended, the terms "househelper"
or "domestic servant" are defined as follows:
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.
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.
criteria is the personal comfort and enjoyment of the family of
the employer in the home of said employe
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
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
Mercidar Fishing Corp v. NLRC
Private respondent alleged that he had been sick and thus
allowed to go on leave without pay for one month but that when
he reported to work at the end of such period with a health
clearance, he was told to come back another time as he could
not be reinstated immediately.
petitioner refused to give him work. For this reason, private
respondent asked for a certificate of employment from petitioner
when he came back for the certificate on September 10,
petitioner refused to issue the certificate unless he submitted his
resignation. Since private respondent refused to submit such
letter unless he was given separation pay, petitioner prevented
him from entering the premises.
etitioner, on the other hand, alleged that it was private
respondent who actually abandoned his work. It claimed that the
latter failed to report for work after his leave had expired and
was, in fact, absent without leave for three months Thereafter,
private respondent asked for a certificate of employment
6 on the pretext that he was applying to another fishing
company. On September 10, 1990, he refused to get the
certificate and resign unless he was given separation pay.
Labor Arbiter respondents are ordered to reinstate complainant

appealed to the NLRC dismissed petitioners claim that it cannot

be held liable for service incentive leave pay by fishermen in its
employ as the latter supposedly are field personnel and thus not
entitled to such pay under the Labor Code.
FISHING CREW MEMBERS, LIKE FERMIN AGAO, JR., CANNOT BE
CLASSIFIED AS FIELD PERSONNEL UNDER ARTICLE 82 OF THE
LABOR CODE.
petition has no merit.
ART. 82 Field personnel shall refer to non-agricultural employees
who regularly perform their duties away from the principal place
of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable
certainty.
Petitioner argues essentially that since the work of private
respondent is performed away from its principal place of
business, it has no way of verifying his actual hours of work on
the vessel. It contends that private respondent and other
fishermen in its employ should be classified as field personnel
who have no statutory right to service incentive leave pay.
reover, the requirement that actual hours of work in the field
cannot be determined with reasonable certainty must be read in
conjunction with Rule IV, Book III of the Implementing Rules
Contrary to the contention of the petitioner, the Court finds that
the aforementioned rule did not add another element to the
Labor Code definition of field personnel
Hence, in deciding whether or not an employees actual working
hours in the field can be determined with reasonable certainty,
query must be made as to whether or not such employees time
and performance is constantly supervised by the employer
The petitioner maintains that the period between 8:00 a.m. to
4:00 or 4:30 p.m. comprises the sales personnels working hours
which can be determined with reasonable certainty.
The Court does not agree. The law requires that the actual hours
of work in the field be reasonably ascertained. The company has
no way of determining whether or not these sales personnel,
even if they report to the office before 8:00 a.m. prior to field
work and come back at 4:30 p.m., really spend the hours in
between in actual field work.
In contrast, in the case at bar, during the entire course of their
fishing voyage, fishermen employed by petitioner have no
choice but to remain on board its vessel. Although they perform
non-agricultural work away from petitioners business offices, the
fact remains that throughout the duration of their work they are
under the effective control and supervision of petitioner through
the vessels patron or master as the NLRC correctly held
, there is no reason to apply the rule that reinstatement may not
be ordered if, as a result of the case between the parties, their
relation is strained.[13] Even at this late stage of this dispute,
petitioner continues to reiterate its offer to reinstate private
respondent.[
5. Labor Congress of the Philippines v. NLRC
99 persons named as petitioners in this proceeding were rankand-file employees of respondent Empire Food Products, which
hired them on various dates Petitioners filed against private
respondents a complaint for payment of money claim[s] and for
violation of labor standard also filed a petition for direct
certification of petitioner Labor Congress of the Philippines as
their bargaining representative petitioners represented by LCP
President Benigno B. Navarro, Sr. and private respondents
Gonzalo Kehyeng in behalf of Empire Food Products, Inc. entered
into a Memorandum of Agreement which provided, among
others, the following:

Mediator Arbiter Antonio Cortez approved the memorandum of

agreement and certified LCP as the sole and exclusive
bargaining agent among the rank-and-file employees of Empire
Food Products for purposes of collective bargaining with respect
to wages, hours of work and other terms and conditions of
employment
petitioners through LCP President Navarro submitted to private
respondents a proposal for collective bargaining petitioners filed
a complaint docketed as NLRC Case No. RAB-III-01-1964-91
against private respondents for:
Labor Arbiter Ariel C. Santos absolved private respondents of the
charges of unfair labor practice, union busting, violation of the
memorandum of agreement, underpayment of wages and
denied petitioners prayer for actual, moral and exemplary
damages. Labor Arbiter Santos, however, directed the
reinstatement of the individual complainant
Labor Arbiter is not oblivious to the fact that respondents have
violated a cardinal rule in every establishment that a payroll and
other papers evidencing hours of work, payments, etc. shall
always be maintained and subjected to inspection and visitation
by personnel of the Department of Labor and Employment
On appeal, the NLRC, in its Resolution dated 29 March 1995,[5]
affirmed in toto the decision of Labor Arbiter Santos. In so doing,
the NLRC sustained the Labor Arbiters findings that: (a) there
was a dearth of evidence to prove the existence of unfair labor
practice and union busting on the part of private respondents;
(b) the agreement of 23 October 1990 could not be made the
basis of an obligation within the ambit of the NLRCs jurisdiction,
as the provisions thereof, particularly Section 2, spoke of a
resolutory condition which could or could not happen; (c) the
claims for underpayment of wages were without basis as
complainants were admittedly pakiao workers and paid on the
basis of their output subject to the lone limitation that the
payment conformed to the minimum wage rate for an eight-hour
workday; and (d) petitioners were not underpaid.
WHETHER OR NOT PETITIONERS SHOULD BE REINSTATED FROM
THE DATE OF THEIR DISMISSAL UP TO THE TIME OF THEIR
REINSTATEMENT, WITH BACKWAGES, STATUTORY BENEFITS,
DAMAGES AND ATTORNEYS FEES.[
However, the OSG argued, this refusal to report for work for a
single day did not constitute abandonment, which pertains to a
clear, deliberate and unjustified refusal to resume employment,
and not mere absence.
We find for petitioners.
What cannot escape from our attention is that the Labor Arbiter
did not heed the observations and pronouncements of the NLRC
in its resolution
Our considered view the case should be remanded to the Labor
Arbiter of origin for further proceedings.
Our considered view that even assuming arguendo that the
respondents failed to maintain their payroll and other papers
evidencing hours of work, payment etc., such circumstance,
standing alone, does not warrant the directive to reinstate
complainants to their former positions. It is [a] well settled rule
that there must be a finding of illegal dismissal before
reinstatement be mandated.
the LABOR ARBITER is hereby directed to include in his
clarificatory decision, after receiving evidence, considering and
resolving the same, the requisite dispositive portion we find the
following observations of the OSG most persuasive:
In finding that petitioner employees abandoned their work, the
Labor Arbiter and the NLRC relied on the testimony of Security
Guard Rolando Cairo that on January 21, 1991, petitioners

refused to work. As a result of their failure to work, the cheese

curls ready for repacking on said date were spoiled.

midwives, attendants and all other hospital or clinic personnel.

chanroblesvirtuallawlibrary

The failure to work for one day, which resulted in the spoilage of
cheese curls does not amount to abandonment of work.

ART. 84. Hours worked. - Hours worked shall include (a) all time
during which an employee is required to be on duty or to be at a
prescribed workplace; and (b) all tie during which an employee is
suffered or permitted to work.

That petitioner employees are pakyao or piece workers does not

imply that they are not regular employees entitled to
reinstatement. Private respondent Empire Food Products, Inc. is
a food and fruit processing company. In Tabas v. California
Manufacturing Co., Inc. (169 SCRA 497), this Honorable Court
held that the work of merchandisers of processed food, who
coordinate with grocery stores and other outlets for the sale of
the processed food is necessary in the day-to-day operation[s] of
the company. With more reason, the work of processed food
repackers is necessary in the day-to-day operation[s] of
respondent Empire Food Products
Petitioners are therefore entitled to reinstatement with full back
wages pursuant to Article 279 of the Labor Code
Petitioners, as piece-rate workers having been paid by the piece,
[14] there is need to determine the varying degrees of
production and days worked by each worker. Clearly, this issue is
best left to the National Labor Relations Commission.
although piece-rate workers, were regular employees of private
respondents. First, as to the nature of petitioners tasks, their job
of repacking snack food was necessary or desirable in the usual
business of private respondents, who were engaged in the
manufacture and selling of such food products; second,
petitioners worked for private respondents throughout the year,
their employment not having been dependent on a specific
project or season; and third, the length of time[16] that
petitioners worked for private respondents. Thus, while
petitioners mode of compensation was on a per piece basis, the
status and nature of their employment was that of regular
employees.
The Rules Implementing the Labor Code exclude certain
employees from receiving benefits such as nighttime pay,
holiday pay, service incentive leave[17] and 13th month pay,
[18] inter alia, field personnel and other employees whose time
and performance is unsupervised by the employer, including
those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for
performing work irrespective of the time consumed in the
performance thereof. Plainly, petitioners as piece-rate workers
do not fall within this group. As mentioned earlier, not only did
petitioners labor under the control of private respondents as
their employer, likewise did petitioners toil throughout the year
with the fulfillment of their quota as supposed basis for
compensation. Further, in Section 8 (b), Rule IV, Book III which
we quote hereunder, piece workers are specifically mentioned as
being entitled to holiday pay.
IN VIEW WHEREOF, the instant petition is hereby GRANTED
Hours of Work
ART. 83. Normal hours of work. - The normal hours of work of any
employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of
at least one million (1,000,000) or in hospitals and clinics with a
bed capacity of at least one hundred (100) shall hold regular
office hours for eight (8) hours a day, for five (5) days a week,
exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or fortyeight (48) hours, in which case, they shall be entitled to an
additional compensation of at least thirty percent (30%) of their
regular wage for work on the sixth day. For purposes of this
Article, "health personnel" shall include resident physicians,
nurses, nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians, psychologists,

Rest periods of short duration during working hours shall be

counted as hours worked.
ART. 85. Meal periods. - Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60) minutes
time-off for their regular meals.
ART. 86. Night shift differential. - Every employee shall be paid a
night shift differential of not less than ten percent (10%) of his
regular wage for each hour of work performed between ten
oclock in the evening and six oclock in the morning.
ART. 87. Overtime work. - Work may be performed beyond eight
(8) hours a day provided that the employee is paid for the
overtime work, an additional compensation equivalent to his
regular wage plus at least twenty-five percent (25%) thereof.
Work performed beyond eight hours on a holiday or rest day
shall be paid an additional compensation equivalent to the rate
of the first eight hours on a holiday or rest day plus at least
thirty percent (30%) thereof.
ART. 88. Undertime not offset by overtime. - Undertime work on
any particular day shall not be offset by overtime work on any
other day. Permission given to the employee to go on leave on
some other day of the week shall not exempt the employer from
paying the additional compensation required in this Chapter.
ART. 89. Emergency overtime work. - Any employee may be
required by the employer to perform overtime work in any of the
following cases:chan robles virtual law library
(a) When the country is at war or when any other national or
local emergency has been declared by the National Assembly or
the Chief Executive;
(b) When it is necessary to prevent loss of life or property or in
case of imminent danger to public safety due to an actual or
impending emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic, or other
disaster or calamity;
(c) When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or
damage to the employer or some other cause of similar nature;
(d) When the work is necessary to prevent loss or damage to
perishable goods; an
(e) Where the completion or continuation of the work started
before the eighth hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the
employer.
Any emloyee required to render overtime work under this Article
shall be paid the additional compensation required in this
Chapter.
ART. 90. Computation of additional compensation. - For purposes
of computing overtime and other additional remuneration as
required by this Chapter, the "regular wage" of an employee
shall include the cash wage only, without deduction on account
of facilities provided by the employer.
ECTION 3. Hours worked. The following shall be considered as
compensable hours worked:

(a) All time during which an employee is required to be on duty

or to be at the employer's premises or to be at a prescribed work
place; and
(b) All time during which an employee is suffered or permitted to
work.cralaw
SECTION 4. Principles in determining hours worked. The
following general principles shall govern in determining whether
the time spent by an employee is considered hours worked for
purposes of this Rule:
(a) All hours are hours worked which the employee is required to
give his employer, regardless of whether or not such hours are
spent in productive labor or involve physical or mental
exertion.cralaw
(b) An employee need not leave the premises of the work place
in order that his rest period shall not be counted, it being enough
that he stops working, may rest completely and may leave his
work place, to go elsewhere, whether within or outside the
premises of his work place.cralaw
(c) If the work performed was necessary, or it benefited the
employer, or the employee could not abandon his work at the
end of his normal working hours because he had no
replacement, all time spent for such work shall be considered as
hours worked, if the work was with the knowledge of his
employer or immediate supervisor.cralaw
(d) The time during which an employee is inactive by reason of
interruptions in his work beyond his control shall be considered
working time either if the imminence of the resumption of work
requires the employee's presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the
employee's own interest.cralaw
SECTION 5. Waiting time. (a) Waiting time spent by an
employee shall be considered as working time if waiting is an
integral part of his work or the employee is required or engaged
by the employer to wait.cralaw
(b) An employee who is required to remain on call in the
employer's premises or so close thereto that he cannot use the
time effectively and gainfully for his own purpose shall be
considered as working while on call. An employee who is not
required to leave word at his home or with company officials
where he may be reached is not working while on call.cralaw
SECTION 6. Lectures, meetings, training programs.
Attendance at lectures, meetings, training programs, and other
similar activities shall not be counted as working time if all of the
following conditions are met:
(a) Attendance is outside of the employee's regular working
hours;
(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during
such attendance.cralaw
SECTION 7. Meal and Rest Periods. Every employer shall give
his employees, regardless of sex, not less than one (1) hour
time-off for regular meals, except in the following cases when a
meal period of not less than twenty (20) minutes may be given
by the employer provided that such shorter meal period is
credited as compensable hours worked of the employee:
(a) Where the work is non-manual work in nature or does not
involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than
sixteen (16) hours a day;

(c) In case of actual or impending emergencies or there is urgent

work to be performed on machineries, equipment or installations
to avoid serious loss which the employer would otherwise suffer;
and
(d) Where the work is necessary to prevent serious loss of
perishable goods.cralaw
Rest periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working
time.cralaw
SECTION 8. Overtime pay. Any employee covered by this Rule
who is permitted or required to work beyond eight (8) hours on
ordinary working days shall be paid an additional compensation
for the overtime work in the amount equivalent to his regular
wage plus at least twenty-five percent (25%) thereof.cralaw
SECTION 9. Premium and overtime pay for holiday and rest day
work. (a) Except employees referred to under Section 2 of this
Rule, an employee who is permitted or suffered to work on
special holidays or on his designated rest days not falling on
regular holidays, shall be paid with an additional compensation
as premium pay of not less than thirty percent (30%) of his
regular wage. For work performed in excess of eight (8) hours on
special holidays and rest days not falling on regular holidays, an
employee shall be paid an additional compensation for the
overtime work equivalent to his rate for the first eight hours on a
special holiday or rest day plus at least thirty percent (30%)
thereof.cralaw
(b) Employees of public utility enterprises as well as those
employed in non-profit institutions and organizations shall be
entitled to the premium and overtime pay provided herein,
unless they are specifically excluded from the coverage of this
Rule as provided in Section 2 hereof.cralaw
(c) The payment of additional compensation for work performed
on regular holidays shall be governed by Rule IV, Book Three, of
these Rules.cralaw
SECTION 10. Compulsory overtime work. In any of the
following cases, an employer may require any of his employees
to work beyond eight (8) hours a day, provided that the
employee required to render overtime work is paid the additional
compensation required by these regulations:
(a) When the country is at war or when any other national or
local emergency has been declared by Congress or the Chief
Executive;
(b) When overtime work is necessary to prevent loss of life or
property, or in case of imminent danger to public safety due to
actual or impending emergency in the locality caused by serious
accident, fire, floods, typhoons, earthquake, epidemic or other
disaster or calamities;
(c) When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or
damage to the employer or some other causes of similar nature;
(d) When the work is necessary to prevent loss or damage to
perishable goods;
(e) When the completion or continuation of work started before
the 8th hour is necessary to prevent serious obstruction or
prejudice to the business or operations of the employer; or
(f) When overtime work is necessary to avail of favorable
weather or environmental conditions where performance or
quality of work is dependent thereon.cralaw
In cases not falling within any of these enumerated in this
Section, no employee may be made to work beyond eight hours
a day against his will.

RULE I-A
Hours of Work of Hospital and Clinic Personnel
SECTION 1. General statement on coverage. This Rule shall
apply to:
(a) All hospitals and clinics, including those with a bed capacity
of less than one hundred (100) which are situated in cities or
municipalities with a population of one million or more; and
(b) All hospitals and clinics with a bed capacity of at least one
hundred (100), irrespective of the size of the population of the
city or municipality where they may be situated.cralaw
SECTION 2. Hospitals or clinics within the meaning of this Rule.
The terms "hospitals" and "clinics" as used in this Rule shall
mean a place devoted primarily to the maintenance and
operation of facilities for the diagnosis, treatment and care of
individuals suffering from illness, disease, injury, or deformity, or
in need of obstetrical or other medical and nursing care. Either
term shall also be construed as any institution, building, or place
where there are installed beds, or cribs, or bassinets for twentyfour (24) hours use or longer by patients in the treatment of
disease, injuries, deformities, or abnormal physical and mental
states, maternity cases or sanitorial care; or infirmaries,
nurseries, dispensaries, and such other similar names by which
they may be designated.cralaw
SECTION 3. Determination of bed capacity and population. (a)
For purposes of determining the applicability of this Rule, the
actual bed capacity of the hospital or clinic at the time of such
determination shall be considered, regardless of the actual or
bed occupancy. The bed capacity of hospital or clinic as
determined by the Bureau of Medical Services pursuant to
Republic Act No. 4226, otherwise known as the Hospital
Licensure Act, shall prima facie be considered as the actual bed
capacity of such hospital or clinic.cralaw
(b) The size of the population of the city or municipality shall be
determined from the latest official census issued by the Bureau
of the Census and Statistics.cralaw
SECTION 4. Personnel covered by this Rule. This Rule applies
to all persons employed by any private or public hospital or clinic
mentioned in Section 1 hereof, and shall include, but not limited
to, resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians paramedical
technicians, psychologists, midwives, and attendants.cralaw
SECTION 5. Regular working hours. The regular working hours
of any person covered by this Rule shall not be more than eight
(8) hours in any one day nor more than forty (40) hours in any
one week.cralaw
For purposes of this Rule a "day" shall mean a work day of
twenty-four (24) consecutive hours beginning at the same time
each calendar year. A "week" shall mean the work of 168
consecutive hours, or seven consecutive 24-hour work days,
beginning at the same hour and on the same calendar day each
calendar week.cralaw
SECTION 6. Regular working days. The regular working days of
covered employees shall not be more than five days in a work
week. The work week may begin at any hour and on any day,
including Saturday or Sunday, designated by the
employer.cralaw

five (5) days or forty (40) hours a week, provided that the
employee is paid for the overtime work an additional
compensation equivalent to his regular wage plus at least thirty
percent (30%) thereof, subject to the provisions of this Book on
the payment of additional compensation for work performed on
special and regular holidays and on rest days.cralaw
SECTION 8. Hours worked. In determining the compensable
hours of work of hospital and clinic personnel covered by this
Rule, the pertinent provisions of Rule 1 of this Book shall
apply.cralaw
SECTION 9. Additional compensation. Hospital and clinic
personnel covered by this Rule, with the exception of those
employed by the Government, shall be entitled to an additional
compensation for work performed on regular and special
holidays and rest days as provided in this Book. Such employees
shall also be entitled to overtime pay for services rendered in
excess of forty hours a week, or in excess of eight hours a day,
whichever will yield the higher additional compensation to the
employee in the work week.cralaw
SECTION 10. Relation to Rule I. All provisions of Rule I of this
Book which are not inconsistent with this Rule shall be deemed
applicable to hospital and clinic personnel.
RULE II
Night Shift Differential
SECTION 1. Coverage. This Rule shall apply to all employees
except:
(a) Those of the government and any of its political subdivisions,
including government-owned and/or controlled corporations;
(b) Those of retail and service establishments regularly
employing not more than five (5) workers;
(c) Domestic helpers and persons in the personal service of
another;
(d) Managerial employees as defined in Book Three of this Code;
(e) Field personnel and other employees whose time and
performance is unsupervised by the employer including those
who are engaged on task or contract basis, purely commission
basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance
thereof.cralaw
SECTION 2. Night shift differential. An employee shall be paid
night shift differential of no less than ten per cent (10%) of his
regular wage for each hour of work performed between ten
o'clock in the evening and six o'clock in the morning.cralaw
SECTION 3. Additional compensation. Where an employee is
permitted or suffered to work on the period covered after his
work schedule, he shall be entitled to his regular wage plus at
least twenty-five per cent (25%) and an additional amount of no
less than ten per cent (10%) of such overtime rate for each hour
or work performed between 10 p.m. to 6 a.m.cralaw

Employers are not precluded from changing the time at which

the work day or work week begins, provided that the change is
not intended to evade the requirements of this Rule.cralaw

SECTION 4. Additional compensation on scheduled rest

day/special holiday. An employee who is required or permitted
to work on the period covered during rest days and/or special
holidays not falling on regular holidays, shall be paid a
compensation equivalent to his regular wage plus at least thirty
(30%) per cent and an additional amount of not less than ten
(10%) per cent of such premium pay rate for each hour of work
performed.cralaw

SECTION 7. Overtime work. Where the exigencies of the

service so require as determined by the employer, any employee
covered by this Rule may be scheduled to work for more than

SECTION 5. Additional compensation on regular holidays. For

work on the period covered during regular holidays, an
employee shall be entitled to his regular wage during these days

plus an additional compensation of no less than ten (10%) per

cent of such premium rate for each hour of work
performed.cralaw
SECTION 6. Relation to agreements. Nothing in this Rule shall
justify an employer in withdrawing or reducing any benefits,
supplements or payments as provided in existing individual or
collective agreements or employer practice or policy.
Dole
. Compressed Workweek wherein the normal workweek is
reduced to less than six days but the total number of work hours
of 48 hours per week shall remain. The normal workday is
increased to more than eight hours but not to exceed 12 hours,
without corresponding overtime premium. The concept can be
adjusted accordingly depending on the normal workweek of the
company pursuant to the provisions of Department Advisory No.
02, series of 2004, dated 2 December 2004.
6.

National shipyards and steel corporation v. court of

industrial relations

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.bargeman 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 upon prior authority of their superior officers, they may
leave their barges when said barges are idle.
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
In the course of the proceeding, the parties entered into a
stipulation of facts wherein the NASSCO recognized and
admitted
The petitioners are paid by the respondent their regular salaries
and subsistence allowance, without additional compensation for
overtime work;
Industrial Court issued an order directing the court examiner to
compute the overtime compensation due the claimants.
examiner found that the petitioners ndered 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.
Dominador Malondras, on September 18, 1959, filed petitions in
the same case asking for the compensation and payment of his
overtime compensation
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. recommended the payment to
him of overtime compensation in the total sum of P2,790.90.he
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
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

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:
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
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
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, a
laborer need not leave the premises of the factory shop or boat
in order that his period of rest shall not be counted, it being
enough that he "cease to work", may rest completely and leave
or may leave at his will the spot where he actually stays while
working, to go somewhere else, whether within or outside the
premises of said factory, shop or boat. If these requisites are
complied with, the period of such rest shall not be counted
While Malondras' daily time sheets do not show his actual
working hours, nevertheless, petitioner has already admitted in
the Stipulation of Facts in this case that Malondras and his coclaimants did render service beyond eight (8) hours a day when
so required by the exigencies of the service; and in fact,
Malondras was credited and already paid for five (5) hours daily
overtime work during the period from May 1 to December 31,
1957, under the examiner's first report. Since Malondras has
been at the same job since 1954, it can be reasonably inferred
that the overtime service he put in whenever he was required to
be aboard his barge all day from 1954 to 1957 would be more or
less consistent. In truth, the other claimants who served with
Malondras under the same conditions and period have been
finally paid for an overtime of 5 hours a day, and no substantial
difference exists between their case and the present one, which
was not covered by the same award only because Malondras'
time records not found until later.

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.
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.
7.

Caltex Regular Employees at manila office v. caltext inc

petitioner Union and private respondent Caltex (Philippines), Inc.

("Caltex") entered into a Collective Bargaining Agreement
Sometime in August 1986, the Union called Caltex's attention to
alleged violations by Caltex of Annex "B" of the 1985 CBA, e.g.
non-payment of night-shift differential, non-payment of overtime
pay and non-payment at "first day-off rates" for work performed
on a Saturday.
Caltex's Industrial Relations manager immediately evaluated
petitioner's claims and accordingly informed petitioner Union
that differential payments would be timely implemented. In the
implementation of the re-computed claims, however, no
differential payment was made with respect to work performed
on the first 2 1/2 hours on a Saturday.
the Union instituted a complaint for unfair labor practice against
Caltex
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.
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
Labor Arbiter ruled in favor of petitioner Union
Caltex's employees had been given two (2) days (instead of one
[1] day) of rest
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
WON

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.
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
An annex expresses the idea of joining a smaller or subordinate
thing with another, larger or of higher importance. 8 An annex
has a subordinate role, without any independent significance
separate from that to which it is tacked on. Annex "B," in the
case at bar, is one such document. It is not a memorandum of
amendments or a codicil containing additional or new terms or
stipulations. Annex "B" cannot be construed as modifying or
altering the terms expressed in the body of the agreement
contained in the 1985 CBA. It did not confer any rights upon
employees represented by petitioner Union; neither did it
impose any obligations upon private respondent Caltex. In fact,
the contents of Annex "B" have no intelligible significance in and
of themselves when considered separately from the 1985 CBA.
Moreover, we are persuaded by private respondent's argument
that Annex "B" was intended to serve as a company wide guide
in computing compensation for work performed by all its
employees, including but not limited to the Manila Office
employees represented by petitioner Union. Private respondent
also points out that the mathematical formulae contained in
Annex "B" are not all applicable to all classes of employees,
there being some formulae applicable only to particular groups
or classes of employees. Thus, "First Day-off rates" and "Second
Day-off rates" are applicable only to employees stationed at the
refinery and associated facilities like depots and terminals which
must be in constant twenty-four (24) hours a day, seven (7) days
a week, operation, hence necessitating the continuous presence
of operations personnel. The work of such operations personnel
required them to be on duty for six (6) consecutive days. Upon
the other hand, "First Day-off rates" and "Second Day-off rates"
are not applicable to personnel of the Manila Office which
consisted of other groups or categories of employees (e.g., office
clerks, librarians, computer operators, secretaries, collectors,
etc.), 9 since the nature of their work did not require them to be
on duty for six (6) consecutive days.
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.
necessarily constitute overtime work compensable at premium
rates of pay, contrary to petitioner's assertion. These are normal
or regular work hours, compensable at regular rates of pay, as
provided in the 1985 CBA; under that CBA, Saturday is not a rest
day or a "day off". It is only when an employee has been
required on a Saturday to render work in excess of the forty (40)
hours which constitute the regular work week that such
employee may be considered as performing overtime work

EREFORE, 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.
8.

University of Pangasinan Faculty union v. University of

Pangasinan

petitioner filed the following complaints against the University of

Pangasinan abor Arbiter discussed the four complaints
individually. On the April 13, 1981 complaint, he ruled that
because at the time P.D. No. 1123 took effect on May 1, 1977,
the University had not increased its tuition fees, there was of
"nothing to integrate." 4 However, from June 16, 1979 when the
University increased its tuition fees, it was obligated to cause
the integration of the across-the-board increase of P60.00 in
emergency allowance into the basic pay as mandated by P.D.
Nos. 1123 and 1751.
On the alleged nonpayment of extra loads handled by the
employees
the petitioner's president, had no cause to complain because her
salary was fully paid and that, since there were "no
complainants for the alleged nonpayment of extra loads for two
days," the issue had become academic
With respect to the April 27, 1981 complaint, Tumang said that
since the salary paid to Consuelo Abad and other faculty
members for the April 1-15, 1981 period had been earned "as
part of their salary for the ten-month period," she was no longer
entitled to an emergency cost of living allowance. He added that
"payment of emergency cost of living allowance is based on
actual work performed except when they (employees) are on
leave with pay." Hence, because classes ended in March 1981,
the teachers who did not report for work could not be considered
on leave with pay and, therefore, they were not entitled to an
emergency cost of living allowance.
As regards the May 21, 1981 complaint alleging violation of
Wage Order No. 1, Tumang found that the University had actually
implemented the additional living allowance of P2.00 a day
required therein. On the alleged delay in the payment of salaries
of the employees, he rationalized that delays could not be
avoided but he reminded the University to pay its employees on
time.
The June 17, 1981 complaint was also resolved in favor of the
University. Stating that P.D. No. 451 which mandates salary
increases is dependent on enrollment and allowable deductions,
Tumang ruled that, again, Consuelo Abad had no cause to
complain as she had been paid out of the allowable 12.74% for
distribution which was a "substantial compliance with P.D. No.
451.
Respondent however, is required to integrate the allowance of
P60.00 under P.D. 1123 into the basic pay of the covered
employees if the same has not as yet been complied with.
Respondent is also reminded to pay the employees at intervals
not exceeding sixteen (16) days pursuant to Article 102 of the
Labor Code.
petitioner appealed the said decision to the NLRC.The NLRC
affirmed the decision of Executive Labor Article Tumang
WON
Petitioner further prays for safeguards and/or measures to insure
the correct computation of the amount of claims herein sought
due to each covered member of petitioner, and for such other
reliefs just and equitable in the premises

Petitioner's contention that the cases filed by Consuelo Abad as

its president should affect, not only herself, but all the other
union members similarly situated as she was, is well taken
The University's contention that petitioner had no legal
personality to institute and prosecute money claims must,
therefore, fail
]hat should be borne in mind is that the interest of the individual
worker can be better protected on the whole by a strong union
aware of its moral and legal obligations to represent the rank
and file faithfully and secure for them the best wages and
working terms and conditions
On the merits of the petition, the NLRC did not abuse its
discretion in resolving the appeal from the decision of Executive
Labor Arbiter Tumang except for the disallowance of the
emergency cost of living allowance to members of the petitioner
The "No work, no pay" principle does not apply in the instant
case. The petitioner's members received their regular salaries
during this period. It is clear from the . . . law that it
contemplates a "no work" situation where the employees
voluntarily absent themselves. Petitioners, in the case at bar,
certainly do not, ad voluntatem absent themselves during
semestral breaks. Rather, they are constrained to take
mandatory leave from work. For this, they cannot be faulted nor
can they be begrudged that which is due them under the law. To
a certain extent, the private respondent can specify dates when
no classes would be held. Surely, it was not the intention of the
framers of the law to allow employers to withhold employee
benefits by the simple expedient of unilaterally imposing "no
work" days and consequently avoiding compliance with the
mandate of the law for those days.
the law granting emergency cost of living allowances was
designed to augment the income of the employees to enable
them to cope with the rising cost of living and inflation. Clearly,
it was enacted in pursuance of the State's duty to protect labor
and to alleviate the plight of the workers. To uphold private
respondent's interpretation of the law would be running counter
to the intent of the law and the Constitution.
WHEREFORE, the petition for mandamus is hereby DISMISSED.
The decision of the NLRC is AFFIRMED subject to the
MODIFICATION that private respondent University of Pangasinan
shall pay its regular and fulltime teachers and employees
emergency cost of living allowance for the period April 1-15,
1981. Costs against private respondent.
9.

Sime Darby Pilipinas v. NLRC

ime Darby Pilipinas, Inc., petitioner, is engaged in the

manufacture of automotive tires, tubes and other rubber product
Sime Darby Salaried Employees Association (ALU-TUCP), private
respondent, is an association of monthly salaried employees of
petitioner at its Marikina factory. Prior to the present
controversy, all company factory workers in Marikina including
members of private respondent union worked from 7:45 a.m. to
3:45 p.m. with a 30 minute paid on call lunch break.
petitioner issued a memorandum to all factory-based employees
advising all its monthly salaried employees in its Marikina Tire
Plant, except those in the Warehouse and Quality Assurance
Department working on shifts, a change in work schedule
Excluded from the above schedule are the Warehouse and QA
employees who are on shifting. Their work and break time
schedules will be maintained as it is now
Since private respondent felt affected adversely by the change
in the work schedule and discontinuance of the 30-minute paid
on call lunch break, it filed on behalf of its members a complaint
with the Labor Arbiter for unfair labor practice,

10

However, the Labor Arbiter dismissed the complaint on the

ground that the change in the work schedule and the elimination
of the 30-minute paid lunch break of the factory workers
constituted a valid exercise of management prerogative and that
the new work schedule, break time and one-hour lunch break did
not have the effect of diminishing the benefits granted to factory
workers as the working time did not exceed eight (8) hours.
The Labor Arbiter further held if they continued to be paid during
their lunch break even if they were no longer on call or required
to work during the break.
NLRC, reversed its arlier decision NLRC considered the decision
of this Court in the Sime Darby case of 1990 as the law of the
case wherein petitioner was ordered to pay the money value of
these covered employees deprived of lunch and/or working time
breaks. The public respondent declared that the new work
schedule deprived the employees of the benefits of timehonored company practice of providing its employees a 30minute paid lunch break resulting in an unjust diminution of
company privileges prohibited by Art. 100 of the Labor Code
Is the act of management in revising the work schedule of its
employees and discarding their paid lunch break constitutive of
unfair labor practice?
Office of the Solicitor General petition be granted
the new work schedule was not discriminatory of the union
members nor did it constitute unfair labor practice on the part of
petitioner.
We agree, hence, we sustain petitioner. The right to fix the work
schedules of the employees rests principally on their employer.
In the instant case petitioner, as the employer, cites as reason
for the adjustment the efficient conduct of its business
operations and its improved production.[6] It rationalizes that
while the old work schedule included a 30-minute paid lunch
break, the employees could be called upon to do jobs during that
period as they were on call. Even if denominated as lunch break,
this period could very well be considered as working time
because the factory employees were required to work if
necessary and were paid accordingly for working. With the new
work schedule, the employees are now given a one-hour lunch
break without any interruption from their employer. For a full
one-hour undisturbed lunch break, the employees can freely and
effectively use this hour not only for eating but also for their rest
and comfort which are conducive to more efficiency and better
performance in their work. Since the employees are no longer
required to work during this one-hour lunch break, there is no
more need for them to be compensated for this period. We agree
with the Labor Arbiter that the new work schedule fully complies
with the daily work period of eight (8) hours without violating the
Labor Code.[7] Besides, the new schedule applies to all
employees in the factory similarly situated whether they are
union members or not.[8]
was grave abuse of discretion for public respondent to equate
the earlier Sime Darby case[9] with the facts obtaining in this
case. That ruling in the former case is not applicable here. The
issue in that case involved the matter of granting lunch breaks
to certain employees while depriving the other employees of
such breaks. This Court affirmed in that case the NLRCs finding
that such act of management was discriminatory and
constituted unfair labor practice.
The case before us does not pertain to any controversy involving
discrimination of employees but only the issue of whether the
change of work schedule, which management deems necessary
to increase production, constitutes unfair labor practice. As
shown by the records, the change effected by management with
regard to working time is made to apply to all factory employees
engaged in the same line of work whether or not they are
members of private respondent union. Hence, it cannot be said

that the new scheme adopted by management prejudices the

right of private respondent to self-organization.
management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay off of
workers and discipline, dismissal and recall of workers.[11]
Further, management retains the prerogative, whenever
exigencies of the service so require, to change the working hours
of its employees. So long as such prerogative is exercised in
good faith for the advancement of the employers 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 such exercise.
WHEREFORE, the Petition is GRANTED
10. National Semiconductors Distribution Ltd v. NLRC
Petitioner National Semiconductor (HK) Distribution, Ltd. (NSC
for brevity), a foreign corporation licensed to do business in the
Philippines, manufactures and assembles electronic parts for
export with principal office at the Mactan Export Processing
Zone, Mactan, Lapu-Lapu City. Private respondent Edgar Philip C.
Santos was employed by NSC as a technician in its Special
Products Group with a monthly salary of P5,501.00 assigned to
the graveyard shift starting at ten o clock in the evening until six
o clock in the morning.
Santos did not report for work on his shift. He resumed his duties
as night shift Technician Support only on 9 January 1993.
However, at the end of his shift the following morning, he made
two (2) entries in his daily time record (DTR) to make it appear
that he worked on both the 8th and 9th of January 1993.
His immediate supervisor, received the report that there was no
technician in the graveyard shift of 8 January 1993. But when he
checked Santos DTR again in the morning of 9 January 1993 he
found the entry made by Santos for the day before.
On 11 January 1993 Santos submitted his written explanation
alleging that he was ill on the day he was absent. As regards the
entry on 8 January, he alleged that it was merely due to
oversight or carelessness on his part.
Finding Santos' explanation unsatisfactory, NSC dismissed him
ground of falsification of his DTR, which act was inimical to the
company and constituted dishonesty and serious misconduct.[ ,
Santos filed a complaint for illegal dismissal Labor Arbiter
Dominador A. Almirante found that Santos was dismissed on
legal ground , NSC was ordered to indemnify him P1,000.00.
NLRC affirmed the Labor Arbiter holding that his conclusions
were sufficiently supported
WON complainant Edgar Philip Santos entitled to recover unpaid
salary, holiday pay, night shift differential, allowances,
separation pay, retirement benefits and moral damages?[
Private respondent has been in petitioners employ for five (5)
years - starting 13 January 1988 when he was hired to 14
January 1993 when his services were terminated - and petitioner
never denied that private respondent rendered night shift work.
In fact, it even presented some documents purporting to prove
that private respondent was assigned to work on the night shift.
By choosing not to fully and completely disclose information to
prove that it had paid all the night shift differentials due to
private respondent, petitioner failed to discharge the burden of
proof. Consequently, no grave abuse of discretion can be
ascribed to the NLRC for sustaining the Labor Arbiter when it
ruled thus -

11

It is not disputed that complainant was regularly assigned to a

night shift (10:00 P.M. to 7:00 A.M.). Under Section 2, Rule II,
Book Three of the Implementing Rules of the Labor Code,
complainant is entitled to an additional benefit of not less than
ten percent (10%) of his regular wage for each hour of work
performed. The record is bereft of evidence that respondent has
paid complainant this benefit. The best evidence for respondent
corporation would have been the payrolls, vouchers, daily time
records and the like which under Sections 6, 7, 8, 11 and 12,
Rule X, Book III of the Implementing Rules it is obliged to keep.
Its failure gives rise to the presumption that either it does not
have them or if it does, their presentation is prejudicial to its
cause.

12. Prangan v. NLRC

We rule therefore that complainant should be awarded a night

shift differential but limited to three (3) years considering the
prescriptive period of money claims

Private respondent, in its position paper,[2] rejected petitioners

claim alleging it merely acted as an agent of the latter in
securing his employment at the Cat House Bar and Restaurant
claims of the petitioner should be charged to Cat House Bar and
its owner Labor Arbiter respondents MASAGANA SECURITY
SERVICE CORPORATION and/or VICTOR C. PADILLA are hereby
ORDERED to pay

WHEREFORE, petition is DISMISSED. The NLRC Decision of 29

September 1995 is AFFIRMED subject to the modification that
the award of P1,000.00 as indemnity is DELETED in accordance
with the foregoing discussion.
11. National Development Co. v. CIR
a complaint was filed before the industrial court by Orencio A.
Seguritan alleging, among others, that on May 11, 1949 he was
hired as janitor-messenger by the Ajax International Corporation;
that his regular hours of duty were from 7:00 a.m. to 12:00 noon
and from 1:00 p.m. to 5:00 p.m.; that during the period covering
January 2, 1950 to March 31, 1956, aside from his duties as
janitor-messenger, he was ordered to guard the main office of
the corporation from 5:00 p.m. to 8:00 a.m. every day after
office hours and the whole day and night every Sunday and legal
holiday; that from October 12, 1956, he was assigned to the
newly established branch office of the corporation at Pasay City
where he worked as janitor, messenger and clerk, and after his
regular duty ending at 5:00 p.m., he was again made to guard
the said branch office daily from 5:00 p.m. to 8:00 a.m. and the
whole day and night during Sundays and legal holidays up to
August 31, 1957; that in spite of his repeated demands, the
corporation refused to pay such overtime services which
represent the aggregate amount of P15,454.50; and that he
ceased working with said corporation on May 9, 1958 when the
Ajax Adcom Labor Union, of which he is a member, struck and
the strike is still pending settlement before the industrial court.
whether or not the industrial court has jurisdiction to act on the
claim for overtime services rendered by respondent.
In Price Stabilization Corporation vs. Court of Industrial Relations
where the employer-employee relationship is still existing or is
sought to be reestablished because of its wrongful severance (as
where the employee seeks reinstatement), the Court of
Industrial Relations has jurisdiction over all claims
It would, therefore, appear that in order that the Court of
Industrial Relations may have jurisdiction to act on a claim for
overtime pay it is necessary that between petitioner and
respondent there still be an employer-employee relationship, or
that the former, if separated from the service, should ask for his
reinstatement. In the instant case, while respondent apparently
confined his claim to overtime pay, it does not mean that he is
not interested to his reinstatement it appearing that he ceased
working due merely to the strike staged by the union of which he
is a member and the strike is still pending settlement before the
industrial court (page 4, Complaint). Unless, therefore, that
strike is definitely decided, it cannot be said that the employeremployee relationship had terminated, for the outcome may still
be that the strike is legal and the strikers entitled to
reinstatement. This issue is directly interwoven with the claim of
respondent and as such comes under the jurisdiction of the
industrial court.

Private respondent, a corporation engaged in providing security

services to its client, hired petitioner on November 4, 1980 as
one of its security guards. Thereafter, he was assigned to the
Cat House Bar and Restaurant with a monthly salary of
P2,000.00 until its closure on August 31, 1993.
petitioner filed a complaint[1] against private respondent for
underpayment of wages, non-payment of salary from August 1631, 1993, overtime pay, premium pay for holiday, rest day, night
shift differential, uniform allowance, service incentive leave pay
and 13th month pay from the year 1990 to 1993.

petitioners victory was short-lived as the NLRC eventually

dismissed his appeal for lack of merit,[5] the dispositive portion
of the decision reads: Petitioner is now before us imputing grave
abuse of discretion on the part of respondent NLRC (a) declaring
that he rendered only four hours and not twelve hours of work
public respondent, through the Solicitor General petitioner
indeed worked for only four hours and not twelve hours a day.
As proof of petitioners actual hours of work, private respondent
submitted the daily time records allegedly signed by the
petitioner himself showing that he only worked four hours daily.
petitioner argues that these daily time records were falsified for
the simple reason that he was not required to submit one. He
further stressed that, assuming such documents exist, its
authenticity and due execution are questionable and of doubtful
source.
We find merit in the petition.
In the instant case, there is no dispute that matters concerning
an employees actual hours of work are within the ambit of
management prerogative. However, when an employer alleges
that his employee works less than the normal hours of
employment as provided for in the law,[11] he bears the burden
of proving his allegation with clear and satisfactory evidence.
In the instant petition, the NLRC, in declaring that petitioner only
worked for four hours, relied solely on the supposed daily time
records of the petitioner submitted by the private respondent.
[12] We, however, are of the opinion that these documents
cannot be considered substantial evidence as to conclude that
petitioner only worked for four hours. It is worth mentioning that
petitioner, in his Sur-Rejoinder to Respondents Rejoinder,[13]
unequivocably stated that:
Complainant (petitioner herein) never made nor submitted any
daily time record with respondent company considering the fact
that he was assigned to a single post and that the daily time
records he allegedly submitted with respondent company are all
falsified and his signature appearing therein forged.
In said alleged daily time record, it showed that petitioner
started work at 10:00 p.m. and would invariably leave his post at
exactly 2:00 a.m. Obviously, such unvarying recording of a daily
time record is improbable and contrary to human experience. It
is impossible for an employee to arrive at the workplace and
leave at exactly the same time, day in day out. The very
uniformity and regularity of the entries are badges of
untruthfulness and as such indices of dubiety
Another consideration which militates against private
respondents claim is the fact that in the personnel data sheet of

12

the petitioner,[15] duly signed by the formers operation

manager, it shows on its face that the latters hours of work are
from 7:00 p.m. to 7:00 a.m. or twelve hours a day. Hence,
private respondent is estopped from assailing the contents of its
own documents.
All told, private respondent has not adequately proved that
petitioners actual hours of work is only four hours. Its
unexplained silence contravening the personnel data sheet and
the attendance sheets of Cat House Bar and Restaurant
presented by the petitioner showing he worked for twelve hours,
has assumed the character of an admission. No reason was
proffered for this silence despite private respondent, being the
employer, could have easily done so.
WHEREFORE, in view of the foregoing, the instant petition is
hereby GRANTED. Accordingly, the decision of the NLRC dated
July 31, 1996 is hereby VACATED. Whatever money claims due to
the petitioner shall be computed on the basis of a twelve-hour
daily work schedule. For this purpose, the case is hereby
REMANDED to the Labor Arbiter for immediate recomputation
13. Lagatic v. NLRC
Petitioner Romeo Lagatic was employed in May 1986 by
Cityland, first as a probationary sales agent, and later on as a
marketing specialist. He was tasked with soliciting sales for the
company, with the corresponding duties of accepting call-ins,
referrals, and making client calls and cold calls. Cold calls refer
to the practice of prospecting for clients through the telephone
directory. Cityland, believing that the same is an effective and
cost-efficient method of finding clients, requires all its marketing
specialists to make cold calls. The number of cold calls depends
on the sales generated by each: more sales mean less cold calls.
Likewise, in order to assess cold calls made by the sales staff, as
well as to determine the results thereof, Cityland requires the
submission of daily progress reports on the same.
Cityland issued a written reprimand to petitioner for his failure to
submit cold call reports petitioner again failed to submit cold call
reports Petitioner was required to explain his inaction 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 Notwithstanding the aforesaid suspension and
warning, petitioner again failed to submit cold call reports
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.
he sent a letter-reply alleging that his failure to submit cold call
reports should not be deemed as gross insubordination. He
denied any knowledge of the damaging statement, TO HELL
WITH COLD CALLS!
inding petitioner guilty of gross insubordination, Cityland served
a notice of dismissal upon him on petitioner filed a complaint
against Cityland for illegal dismissal, Petitioner raises the
following issues:
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
ATTORNEYS FEES
The petition lacks merit.
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
titioners 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.
we find petitioner guilty of willful disobedience Petitioners failure
to comply with Citylands 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.
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 attorneys fees and costs.
lessening his commissions, the fact remains that petitioner still
receives his basic salary without deductions. Petitioners
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
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. Nondiminution 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 petitioners 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?
. 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, petitioners workweek was never
compressed. Instead, he claims payment for work over and
above his normal 5 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

13

regular workdays. To allow Cityland to do so would be to

circumvent the law on payment of premiums for rest day and
holiday work.
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 benefi

is a basic rule in evidence that each party must prove his

affirmative allegations.[16] This petitioner failed to do
Lastly, with the finding that petitioners dismissal was for a just
and valid cause
WHEREFORE, premises considered, the assailed Resolution is
AFFIRMED

14