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

OFFICE HOURS)
A.M. No. 02-2-10-SC. December 14, 2005.
FACTS:
Muslim employees sent a letter to Judge Salazar of the RTC of Iligan City requesting
himto grant them said privileges: 1) to hold office hours from 7:30 a.m. to 3:30 p.m.
without lunchbreak or coffee breaks during the month of Ramadan; 2) to be excused
from work from 10:00a.m. to 2:00 p.m. every Friday (Muslim Prayer Day) during the
entire calendar year. JudgeSalazar favored the first request but not the second. He
then forwarded the letter to the Office of the Court Administrator (COA). Muslim
employees invoke sec. 2 of P.D. 322 which excusesthem from reporting to office
during recognized Muslim holidays. Section 3 of the same decreesubstantially
provides that during Ramadan, Muslim employees shall observe office hours
from7:30 a.m. to 3:30 p.m. without breaks. Civil Service Commmission (CSC) then
promulgated aresolution granting the two privileges mentioned above and even
clarified that Fridays referredherein pertain to the calendar year. However, CSC
prescribed a flexible working schedule toaccommodate Muslims' Friday prayer day
and so as not to violate E.O. 292 requiring civilservants to work not less then 40
hours a week. The Court Administrator favored the saidresolutions.
ISSUE:
Whether or not Muslim employees be granted of their two requests above
mentioned
HELD:
No. Only the first request can be granted and not the second one. Said requests
aregrounded on Section 5, Article 3 of the Constitution, particularly the free exercise
clause to

one's religion. The court said that this clause is of two-fold, freedom to believe
which is absoluteand freedom to act on one's beliefs as subject to regulation since it
involves matters affectingpublic welfare.The Court recognizes that the observance
of

Ramadan
and the Friday Muslim Prayer Day isintegral to the Islamic faith. However, only the
first request finds support in Section 3 (a) of P.D.No. 291, as amended by P.D. No.
322, there is no basis for the second request. In fact, allowingthe second request

would mean diminution of 12 hours from the prescribed government workinghours.

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

PEPSI-COLA PRODUCTS PHILIPPINES, INC., petitioner,

vs.
THE COURT OF APPEALS, and PEPSI-COLA PRODUCTS PHILIPPINES, INC. EMPLOYEES &
WORKERS UNION (UOEF No. 70) represented by its incumbent president, ISIDRO
REALISTA, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in CAG.R SP No. 50690, setting aside the decision of the National Labor Relations Commission (NLRC) in
NLRC RABX Case No. RO-7-0234-86 and the reinstatement of the decision of the Executive Labor
Arbiter in the said case.
The facts, as culled from the records of the case, are as follows:
Pepsi-Cola Products Philippines, Inc. Employees and Workers Union (PCEWU) is a duly- registered
labor union of the employees of the Pepsi-Cola Distributors of the Philippines (PCDP). 2 On July 14,
1986, PCEWU, through its local union president, Arisedes T. Bombeo, filed a Complaint against
PCDP with the Regional Arbitration Branch No. X of the Department of Labor and Employment
(DOLE), Cagayan de Oro City, for payment of overtime services rendered by fifty-three (53) of its
members, who were employed as salesmen, warehousemen, truck helpers, route salesmen, route
sales workers, distributors, conductors and forklift operators, on the eight (8) days duly- designated
as Muslim holidays for calendar year 1985, in their respective places of assignment, namely: Iligan
City, Tubod, Lanao del Norte and Dipolog City.3 The complaint was docketed as NLRC RABX Case
No. RO-7-0234-86.
The PCEWU alleged, inter alia, that in previous years, they had been paid overtime pay for services
rendered during the eight (8) Muslim holidays in their places of assignment, including Dipolog City.
To support its claims, the PCEWU appended to its position paper the following: a photocopy of the
applicable provisions of Presidential Decree (P.D.) No. 1083; a certification dated March 26, 1986
from the Regional Autonomous Government of Region 12-A, Marawi City, attesting to the eight (8)
Muslim holidays observed in the said region in calendar year 1985; and the individual computation of
the overtime claim of each of the workers concerned. 4
In its position paper, the PCDP maintained that there were only five (5) legal Muslim holidays under
the Muslim Code. It asserted that under the law, the cities of Cagayan de Oro and Dipolog were not
included in the areas that officially observed the Muslim holidays, and that the said holidays were
only applicable to Muslims. It also argued that even assuming that the employees were entitled to
such overtime pay, only the rank-and-file employees and not the managerial employees should be
given such benefit.
On May 26, 1987, the Executive Labor Arbiter (ELA) 5 rendered a Decision in favor of PCEWU,
ordering PCDP to pay the claims of its workers. The decretal portion of the decision reads:
WHEREFORE, finding merit in complainants claim, the respondent is hereby ordered to pay
the complaining workers their claims for overtime services rendered in calendar year 1985
on duly-designated Muslim holidays corresponding to the following dates: May 20, 1985;
June 17, 1985; June 19, 1985; August 26, 1985; September 4, 1985; September 24, 1985;

November 25, 1985 and December 19, 1985, for workers involved with places of
assignments at Iligan City and Tubod, Lanao del Norte and June 17, 1985; June 19, 1985;
August 26, 1985; September 24, 1985 and November 25, 1985, for workers involved in the
instant case whose place of assignment is at Dipolog City. Thus:
Further respondent is hereby ordered to pay Complainant an amount equivalent to ten (10)
percent of the aggregate award as attorneys fee.
SO ORDERED.6
The ELA ruled that, although P.D. No. 1083 does not specifically mention Dipolog City as one of the
places where Muslim holidays are observed, it is nevertheless a part of Zamboanga del Norte and
the autonomous region in Mindanao where such Muslim holidays are observed. He also ruled that
while there were only five (5) Muslim holidays under P.D. No. 1083, and the Regional Legislative
Assembly for Region 12 had passed legislation providing for three (3) more Muslim holidays per the
Manifestation of the employees, the latter failed to prove that a similar legislation had been approved
by the Regional Legislative Assembly for Region 9. The ELA concluded that those employees
assigned in Region 12 were entitled to overtime pay for eight (8) Muslim holidays, but those
assigned in Region 9 were not so entitled.
The respondent appealed the decision to the NLRC where it reiterated its contention that, P.D. No.
1083 (Code of Muslim Personal Laws of the Philippines,) enumerates only five (5) legal Muslim
holidays. It assailed the finding of the ELA that there were three (3) additional Muslim legal holidays
in Region 12 based on the certification made by the Chief of the Administrative Division of the Office
of Muslim Affairs, considering that the actual existence of any proclamation issued in relation thereto
was not even verified. It argued that only Muslims were covered by the legal Muslim holidays
benefits, and not all persons found in the places enumerated in P.D. No. 1083. The respondent
averred that since the employees failed to specify whether they were Muslims or non-Muslims, they
were not entitled to the overtime pay awarded by the ELA. It further claimed that Dipolog City is a
distinct political subdivision from the province of Zamboanga del Norte, and is not one of those areas
enumerated under P.D. No. 1083.7
On March 21, 1991, the NLRC rendered judgment 8 affirming the decision of the ELA with
modification:
WHEREFORE, the decision appealed from is Modified consistent with the foregoing
resolution. For purposes of recomputing the money claims of complainants, the Labor Arbiter
is directed to conduct further proceedings affording both parties reasonable opportunity to be
heard. The monetary award, as decreed in the decision of May 31, 1987, is hereby Vacated.
No findings as to costs.
SO ORDERED.9
The NLRC ruled that, since the respondent had been giving overtime pay during Muslim holidays to
its employees, such proclamation had ripened into a company policy; hence, the respondent is
estopped from denying the claims for overtime services rendered by its rank-and-file employees
during the said Muslim holidays.10 The NLRC also declared that the other three (3) holidays

considered by the ELA, aside from the five (5) Muslim holidays provided under P.D. No. 1083, were
not customarily observed by Filipino Muslims. As such, these should not be included in the
computation of overtime pay. It also ruled that since the complainants failed to present their daily
time records, there can be no basis for the computation and determination for the claims of overtime
pay. There was thus a need to present appropriate company records to determine the proper
computation of the claims for overtime pay during the post arbitration stage. 11
The NLRC also held that the managerial employees were not entitled to receive overtime pay
because they were paid on a monthly basis. Furthermore, such overtime pay did not appear to be
included in their monthly salaries, and that they were allowed "day-off" privileges or to offset any
absences they may have incurred in case they had already exhausted their respective vacation or
sick leave credits. The NLRC also declared that the matter of whether the complainants were
managerial employees or not should be threshed out during the post arbitration proceedings. 12
The PCDP filed its motion for partial reconsideration of the NLRC decision. The employees also filed
a motion for reconsideration of the decision on April 17, 1991. Pending resolution of the said
motions, ownership of various Pepsi-Cola bottling plants was transferred to petitioner Pepsi-Cola
Products Philippines, Inc. (PCPPI). The NLRC directed the parties to file their respective pleadings
concerning the respondents existence as a corporate entity. The PCDP alleged that it had ceased to
exist as a corporation on July 24, 1989 and that it has winded up its corporate affairs in accordance
with law. It also averred that it was now owned by PCPPI. 13
On February 11, 1992, the NLRC issued a Resolution14 dismissing the complaint of the PCEWU for
the reason that, with the cessation and dissolution of the corporate existence of the PCDP, rendering
any judgment against it is incapable of execution and satisfaction:
WHEREFORE, premises considered, judgment is hereby rendered dismissing the aboveentitled case on account of a lawful supervening event, that is the dissolution and cessation
of the corporate and juridical personality of respondent company thereby rendering any
judgment against it incapable of execution and satisfaction. This is without prejudice to the
rights of complainants from pursuing their money claims with the proper forum. This order
supersedes the previous orders of this Commission in so far as the enforcement of the
money claims of complainants are concerned with this labor tribunal. No findings as to costs.
SO ORDERED.15
The NLRC ruled that it was not competent for it to proceed against the PCDP because it had ceased
to exist as a juridical entity. Thus, it no longer resolved the respondents motion for partial
reconsideration, as well as the motion for reconsideration of the employees.
The PCEWU filed a motion for reconsideration of the February 11, 1992 Resolution of the NLRC, but
the latter issued a Resolution on June 4, 199216 denying the said motion for lack of merit.
The petitioner filed a petition for the nullification of the February 11, 1992 Resolution of the NLRC. In
a Resolution dated November 23, 1998, the Court referred the case to the Court of Appeals (CA) for
proper disposition.17 In its petition, the petitioner raised the following issues:

1. WHETHER OR NOT PEPSI-COLA PRODUCTS PHILIPPINES, INC., AS SUCCESSORIN-INTEREST OF THE DISSOLVED PEPSI-COLA DISTRIBUTORS OF THE PHILIPPINES,
[IS] LIABLE OVER [THE] UNPAID OBLIGATION OF THE DISSOLVED CORPORATION
TOWARDS ITS EMPLOYEES;
2. WHETHER OR NOT A DISSOLVED CORPORATION IS EXEMPT FROM THE PAYMENT
OF ITS OBLIGATION;
3. WHETHER OR NOT THE NLRC HAS JURISDICTION OVER PEPSI-COLA
DISTRIBUTORS OF THE PHILIPPINES.18
For its part, the respondent averred that notwithstanding the dissolution of the PCDP while the
complaint was pending resolution by the NLRC, the latter continued existing as a corporation for a
period of three years from the time when it would have been dissolved, conformably to Section 122
of the Corporation Code. It prayed that judgment be rendered in its favor, thus:
WHEREFORE, premises considered, petitioner prays that this Honorable Court issue
judgment:
1. Declaring the National Labor Relations Commission to have committed grave abuse of
discretion in rendering the assailed resolutions.
2. Reversing the decision of the NLRC in the above-entitled case.
3. Reinstating the decision of the executive labor arbiter on May 4, 1987, ordering
respondent to pay the complaining workers their claims for overtime services.
4. Granting petitioner such other reliefs and remedies equitable under the circumstances. 19
In its comment on the petition, the Office of the Solicitor General (OSG) recommended that the
petition be granted and that the NLRC be ordered to resolve the motions for reconsideration of the
petitioner and respondent therein as follows:
Indeed, respondent NLRC acted without lawful justification when it dismissed the complaint
of petitioner union.
PRAYER
WHEREFORE, it is respectfully prayed of this Honorable Court that respondent NLRCs
Resolution dated February 11, 1992, dismissing the complaint of petitioner union, and
Resolution dated June 4, 1992, denying petitioner unions motion for reconsideration, be
annulled and set aside; and that respondent NLRC be ordered to decide on the merits [of]
petitioner unions motion for reconsideration of April 17, 1991 only insofar as the actual
number of Muslim holidays in 1985 is concerned.

It is further respectfully prayed that, in as much as the instant Comment is adverse to respondent
NLRC, the latter be given an opportunity to submit its own Comment, if it so desires. 20
The CA found the petition meritorious, and on April 28, 1998, rendered judgment annulling the
February 11, 1992 Resolution of the NLRC. It ruled that the NLRC committed grave abuse of its
discretion when it dismissed the complaint, citing the ruling of this Court in Pepsi-Cola Bottling Co.,
et al. vs. NLRC.21 The CA declared that the PCDP was still in existence when the complaint was
filed, and that the supervening dissolution of the corporation did not warrant the dismissal of the
complaint against it.22 After all, the appellate court ratiocinated, every corporation is given three (3)
years to wind up its affairs. Hence, in case any litigation is filed by or against the corporation within
the three (3)-year period which could not be terminated within the expiration of the same, such
period must necessarily be prolonged until the final determination of the case, for if the rule were
otherwise, corporations in liquidation would lose what should justly belong to them or would be
exempt from the payment of just obligations through mere technicality, something that courts should
not countenance.23 However, instead of remanding the case to the NLRC for the resolution of the
respondents motion for partial reconsideration and the petitioners motion for reconsideration of the
decision of the NLRC, the CA set aside the decision of the NLRC and reinstated the decision of the
ELA, thus:
WHEREFORE, premises considered, the instant petition is GIVEN DUE COURSE and
GRANTED. The questioned resolutions of the NLRC in the above-entitled case are
REVERSED and SET ASIDE. The decision of the Executive Labor Arbiter on May 4, 1987,
ordering the respondent Pepsi Cola Distributors Philippines and its successor-in-interest
Pepsi Cola Products Philippines, Inc., to pay the complaining workers their claims for
overtime services, is hereby REINSTATED.24
The petitioners motion for reconsideration of the CA decision was denied by the appellate court on
September 15, 2000.25
Petitioner PCPPI, as the successor-in-interest of PCDP, filed the instant petition for review on
certiorari with this Court, assailing the decision and resolution of the CA on the following issues:
I WHETHER OR NOT THE DECISION OF THE COURT OF APPEALS IS NULL AND VOID
INSOFAR AS IT REINSTATED THE DECISION OF THE LABOR ARBITER IN FULL
WITHOUT EXPRESSING THEREIN THE FACTS AND LAW ON WHICH IT IS BASED.
II. WHETHER OR NOT NON-MUSLIMS LIVING AND WORKING IN PRIVATE COMPANIES
LOCATED IN MUSLIM AREAS ARE ENTITLED TO THE MUSLIM HOLIDAY PROVISIONS
OF P.D. 1083.
III. WHAT IS THE SPIRIT BEHIND THE DECLARATION AND CELEBRATION OF MUSLIM
HOLIDAYS? IS IT TO ENABLE MUSLIMS TO OBSERVE, ENJOY, AND CELEBRATE THEIR
RELIGION, OR IS IT TO ALLOW MUSLIM AND NON-MUSLIM ALIKE TO ENJOY
ADDITIONAL HOLIDAYS OVER AND ABOVE THE REGULAR AND NATIONWIDE SPECIAL
DAYS ALREADY OBSERVED IN THE COUNTRY.

IV. WHETHER OR NOT ALLOWING EVEN NON-MUSLIMS WORKING IN PRIVATE

COMPANIES LOCATED IN MUSLIM AREAS, TO BE ENTITLED TO MUSLIM HOLIDAY
PAY, IF THEY RENDER WORK DURING MUSLIM HOLIDAYS, WILL PROVE TO BE TOO
ONEROUS AND UNFAIR TO THE EMPLOYER IN VIOLATION OF THE LATTERS RIGHT
TO EQUAL PROTECTION OF THE LAW.
V. WHETHER OR NOT THE MUSLIM HOLIDAY PROVISIONS OF P.D. 1083 COVER THE
CITY OF DIPOLOG.
VI. WHETHER OR NOT MANAGERIAL EMPLOYEES ARE ENTITLED TO OVERTIME PAY.
VII. WHETHER THERE ARE FIVE (5) OR EIGHT (8) MUSLIM HOLIDAYS TO BE
OBSERVED IN THE AREAS AT ISSUE.26
The petitioner avers that the decision of the CA, setting aside the decision of the NLRC and
reinstating the decision of the ELA, is null and void because it failed to delve into the factual and
legal issues on the merits, such as the number of Muslim legal holidays, and whether non-Muslims,
who were assigned in the Muslim areas, were entitled to overtime pay. Despite such failure, it set
aside the decision of the NLRC and reinstated that of the ELA. The petitioner avers that this violated
Section 14, Article VIII of the Constitution, which reads:
Sec. 14. No decision shall be rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based.
No petition for review or motion for reconsideration of a decision of the court shall be refused due
course or denied without stating the legal basis therefor.
For its part, the respondent avers that the decision of the CA is in accord with law and the facts. The
OSG opted not to file any comment on the petition.
We agree with the ruling of the CA that the NLRC committed a grave abuse of its discretion
amounting to lack of jurisdiction in dismissing the case. The NLRC clearly erred in perceiving that,
upon the petitioners acquisition of the PCDP, the latter lost its corporate personality. The appellate
court delved into and resolved the issue with sufficient fullness, and supported the same with
statutory provisions and applicable case law. Under Section 122 of the Corporation Code, a
corporation whose corporate existence is terminated in any manner continues to be a body
corporate for three (3) years after its dissolution for purposes of prosecuting and defending suits by
and against it and to enable it to settle and close its affairs, culminating in the disposition and
distribution of its remaining assets. It may, during the three-year term, appoint a trustee or a receiver
who may act beyond that period. The provision which reads in full:
SEC. 122. Corporate Liquidation. Every corporation whose charter expires by its own
limitation or is annulled by forfeiture or otherwise, or whose corporate existence for other
purposes is terminated in any other manner, shall nevertheless be continued as a body
corporate for three (3) years after the time when it would have been so dissolved, for the
purpose of prosecuting and defending suits by or against it and enabling it to settle and close

its affairs, to dispose of and convey its property and to distribute its assets, but not for the
purpose of continuing the business for which it was established.
At any time during the said three (3) years, the corporation is authorized and empowered to
convey all of its properties to trustees for the benefit of stockholders, members, creditors,
and other persons in interest. From and after any such conveyance by the corporation of its
properties in trust for the benefit of its stockholders, members, creditors and others in
interest, all interest which the corporation had in the properties terminates the legal interest
vests in the trustees, and the beneficial interest in the stockholders, members, creditors or
other persons in interest.
Upon the winding up of the corporate affairs, any asset distributable to any creditor or
stockholder or member, who is unknown or cannot be found, shall be escheated to the city or
municipality where such assets are located.
Except by decrease of capital stock and as otherwise allowed by this Code, no corporation
shall distribute any of its assets or property except upon lawful dissolution and after payment
of all its debts and liabilities.
The termination of the life of a corporate entity does not by itself cause the extinction or diminution of
the rights and liabilities of such entity.27 If the three-year extended life has expired without a trustee or
receiver having been expressly designated by the corporation, within that period, the board of
directors (or trustees) itself, may be permitted to so continue as "trustees" by legal implication to
complete the corporate liquidation.28
However, we agree with the petitioners contention that the decision of the CA setting aside the
decision of the NLRC and reinstating the decision of the ELA is null and void for lack of jurisdiction.
It bears stressing that the Court of Appeals had no appellate jurisdiction over the issue of whether
the decision of the NLRC is correct or not. This is so because the only issue in the CA was whether
or not the NLRC committed a grave abuse of its discretion in dismissing the complaint simply and
merely because PCDP was acquired by herein petitioner while the complaint of the respondent was
pending.
The issue of the correctness of the NLRC decision was not raised in the Court of Appeals by the
petitioner therein (now the respondent). And the reason for this is obvious: the petitioner and the
respondent therein which are the complainant-appellee and respondent-appellee in the NLRC had
filed their respective motions for reconsideration of the decision of the NLRC, and the latter had yet
to resolve such motions when it dismissed the case; thus, rendering moot and academic any
resolutions on said motions. By dismissing the case, the NLRC thereby set aside, not only the
decision of the ELA, but also its own. The only relief the petitioner in the Court of Appeals was
entitled to was the nullification of the assailed Resolution of the NLRC and the reinstatement of the
case before it. The petitioner was not entitled to a reversal of the decision of the NLRC on the merits
of the appeal and the reinstatement of the decision of the ELA appealed from.

In sum, then, the decision of the CA setting aside the decision of the NLRC and reinstating the
decision of the ELA is null and void. As we ruled in People v. Court of Appeals: 29
If a court is authorized by statute to entertain jurisdiction in a particular case only, and
undertakes to exercise the jurisdiction conferred in a case to which the statute has no
application, the judgment rendered is void. The lack of statutory authority to make a
particular judgment is akin to lack of subject-matter jurisdiction. In this case, the CA is
authorized to entertain and resolve only errors of jurisdiction and not errors of judgment.
A void judgment has no legal and binding effect, force or efficacy for any purpose. In contemplation
of law, it is non-existent.
It behooved the CA, after nullifying the February 11, 1992 Resolution of the NLRC, to order the latter
to reinstate the case, inclusive of its decision, and resolve, with reasonable dispatch, the pending
motions for reconsideration of the parties. After the NLRC shall have resolved the pending motions,
the aggrieved party may then file a petition on certiorari under Rule 65 of the Rules of Court from the
decision of the NLRC and its resolution of the said motions.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The assailed Decision
of the Court of Appeals, nullifying the February 11, 1992 Decision of the NLRC, is AFFIRMED WITH
MODIFICATION. The NLRC is DIRECTED to resolve, with reasonable dispatch, the motions for
reconsideration of the parties of its decision. No costs.
SO ORDERED.

SAN

MIGUEL CORPORATION, petitioner, vs. THE HONORABLE

COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON.
UNDERSECRETARY JOSE M. ESPAOL, JR., Hon. CRESENCIANO
B. TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M.
MACARAYA, respondents.

DECISION
KAPUNAN, J.:

Assailed in the petition before us are the decision, promulgated on 08 May

2000, and the resolution, promulgated on 18 October 2000, of the Court of
Appeals in CA G.R. SP-53269.
The facts of the case are as follows:
On 17 October 1992, the Department of Labor and Employment (DOLE),
Iligan District Office, conducted a routine inspection in the premises of San
Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the
inspection, it was discovered that there was underpayment by SMC of regular
Muslim holiday pay to its employees. DOLE sent a copy of the inspection
result to SMC and it was received by and explained to its personnel officer
Elena dela Puerta. SMC contested the findings and DOLE conducted
summary hearings on 19 November 1992, 28 May 1993 and 4 and 5 October
1993. Still, SMC failed to submit proof that it was paying regular Muslim
holiday pay to its employees. Hence, Alan M. Macaraya, Director IV of DOLE
Iligan District Office issued a compliance order, dated 17 December 1993,
directing SMC to consider Muslim holidays as regular holidays and to pay
both its Muslim and non-Muslim employees holiday pay within thirty (30) days
from the receipt of the order.
[1]

SMC appealed to the DOLE main office in Manila but its appeal was
dismissed for having been filed late. The dismissal of the appeal for late filing
was later on reconsidered in the order of 17 July 1998 after it was found that
the appeal was filed within the reglementary period. However, the appeal was
still dismissed for lack of merit and the order of Director Macaraya was
affirmed.
SMC went to this Court for relief via a petition for certiorari, which this
Court referred to the Court of Appeals pursuant to St. Martin Funeral Homes
vs. NLRC.
[2]

The appellate court, in the now questioned decision, promulgated on 08

May 2000, ruled, as follows:
WHEREFORE, the Order dated December 17, 1993 of Director Macaraya and Order
dated July 17, 1998 of Undersecretary Espaol, Jr. is hereby MODIFIED with regards
the payment of Muslim holiday pay from 200% to 150% of the employee's basic
salary. Let this case be remanded to the Regional Director for the proper computation
of the said holiday pay.
SO ORDERED.[3]
Its motion for reconsideration having been denied for lack of merit, SMC
filed a petition for certiorari before this Court, alleging that:
PUBLIC RESPONDENTS SERIOUSLY ERRED AND COMMITTED GRAVE
ABUSE OF DISCRETION WHEN THEY GRANTED MUSLIM HOLIDAY PAY TO
NON-MUSLIM EMPLOYEES OF SMC-ILICOCO AND ORDERING SMC TO PAY
THE SAME RETROACTIVE FOR ONE (1) YEAR FROM THE DATE OF THE
PROMULGATION OF THE COMPLIANCE ORDER ISSUED ON DECEMBER 17,
1993, IT BEING CONTRARY TO THE PROVISIONS, INTENT AND PURPOSE
OF P.D. 1083 AND PREVAILING JURISPRUDENCE.
THE ISSUANCE OF THE COMPLIANCE ORDER WAS TAINTED WITH GRAVE
ABUSE OF DISCRETION IN THAT SAN MIGUEL CORPORATION WAS NOT
ACCORDED DUE PROCESS OF LAW; HENCE, THE ASSAILED COMPLIANCE
ORDER AND ALL SUBSEQUENT ORDERS, DECISION AND RESOLUTION OF
PUBLIC RESPONDENTS WERE ALL ISSUED WITH GRAVE ABUSE OF
DISCRETION AND ARE VOID AB INITIO.
THE HON. COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT DECLARED THAT REGIONAL DIRECTOR
MACARAYA, UNDERSECRETARY TRAJANO AND UNDERSECRETARY
ESPAOL, JR., WHO ALL LIKEWISE ACTED WITH GRAVE ABUSE OF
DISCRETION AND WITHOUT OR IN EXCESS OF THEIR JURISDICTION,
HAVE JURISDICTION IN ISSUING THE ASSAILED COMPLIANCE ORDER
AND SUBSEQUENT ORDERS, WHEN IN FACT THEY HAVE NO

JURISDICTION OR HAS LOST JURISDICTION OVER THE HEREIN LABOR

STANDARD CASE.[4]
At the outset, petitioner came to this Court via a petition for certiorari under
Rule 65 instead of an appeal under Rule 45 of the 1997 Rules of Civil
Procedure. In National Irrigation Administration vs. Court of Appeals, the
Court declared:
[5]

x x x (S)ince the Court of Appeals had jurisdiction over the petition under Rule 65,
any alleged errors committed by it in the exercise of its jurisdiction would be errors of
judgment which are reviewable by timely appeal and not by a special civil action
of certiorari. If the aggrieved party fails to do so within the reglementary period, and
the decision accordingly becomes final and executory, he cannot avail himself of the
writ of certiorari, his predicament being the effect of his deliberate inaction.
The appeal from a final disposition of the Court of Appeals is a petition for review
under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now
Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is
clear that decisions, final orders or resolutions of the Court of Appeals in any
case, i.e., regardless of the nature of the action or proceeding involved, may be
appealed to this Court by filing a petition for review, which would be but a
continuation of the appellate process over the original case. Under Rule 45 the
reglementary period to appeal is fifteen (15) days from notice of judgment or denial of
motion for reconsideration.
xxx
For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner
must show that he has no plain, speedy and adequate remedy in the ordinary course of
law against its perceived grievance. A remedy is considered "plain, speedy and
adequate" if it will promptly relieve the petitioner from the injurious effects of the
judgment and the acts of the lower court or agency. In this case, appeal was not only
available but also a speedy and adequate remedy.[6]
Well-settled is the rule that certiorari cannot be availed of as a substitute
for a lost appeal. For failure of petitioner to file a timely appeal, the
[7]

questioned decision of the Court of Appeals had already become final and
executory.
In any event, the Court finds no reason to reverse the decision of the
Court of Appeals.
Muslim holidays are provided under Articles 169 and 170, Title I, Book V,
of Presidential Decree No. 1083, otherwise known as the Code of Muslim
Personal Laws, which states:
[8]

Art. 169. Official Muslim holidays. - The following are hereby recognized as legal
Muslim holidays:
(a) Amun Jadd (New Year), which falls on the first day of the first lunar month
of Muharram;
(b) Maulid-un-Nab (Birthday of the Prophet Muhammad), which falls on the twelfth day
of the third lunar month of Rabi-ul-Awwal;
(c) Lailatul Isr Wal Mirj (Nocturnal Journey and Ascension of the Prophet
Muhammad), which falls on the twenty-seventh day of the seventh lunar month
of Rajab;
(d) d-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month
of Shawwal, commemorating the end of the fasting season; and
(e) d-l-Adh (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month
of Dhl-Hijja.

Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall
be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur,
Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such
other Muslim provinces and cities as may hereafter be created;
(2) Upon proclamation by the President of the Philippines, Muslim holidays may also
be officially observed in other provinces and cities.
The foregoing provisions should be read in conjunction with Article 94 of
the Labor Code, which provides:
Art. 94. Right to holiday pay. -

(a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but
such employee shall be paid a compensation equivalent to twice
his regular rate; x x x.
Petitioner asserts that Article 3(3) of Presidential Decree No. 1083
provides that (t)he provisions of this Code shall be applicable only to Muslims
x x x. However, there should be no distinction between Muslims and nonMuslims as regards payment of benefits for Muslim holidays. The Court of
Appeals did not err in sustaining Undersecretary Espaol who stated:
Assuming arguendo that the respondents position is correct, then by the same token,
Muslims throughout the Philippines are also not entitled to holiday pays on Christian
holidays declared by law as regular holidays. We must remind the respondentappellant that wages and other emoluments granted by law to the working man are
determined on the basis of the criteria laid down by laws and certainly not on the basis
of the workers faith or religion.
At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that x x
x nothing herein shall be construed to operate to the prejudice of a nonMuslim.
In addition, the 1999 Handbook on Workers Statutory Benefits, approved
by then DOLE Secretary Bienvenido E. Laguesma on 14 December
1999 categorically stated:
Considering that all private corporations, offices, agencies, and entities or
establishments operating within the designated Muslim provinces and cities are
required to observe Muslim holidays, both Muslim and Christians working within
the Muslim areas may not report for work on the days designated by law as
Muslim holidays.[9]

On the question regarding the jurisdiction of the Regional Director Allan M.

Macaraya, Article 128, Section B of the Labor Code, as amended by Republic
Act No. 7730, provides:
Article 128. Visitorial and enforcement power. xxx
(b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary,
and in cases where the relationship of employer-employee still exists, the Secretary
of Labor and Employment or his duly authorized representatives shall have the
power to issue compliance orders to give effect to the labor standards provisions of
this Code and other labor legislation based on the findings of labor employment and
enforcement officers or industrial safety engineers made in the course of the
inspection. The Secretary or his duly authorized representative shall issue writs of
execution to the appropriate authority for the enforcement of their orders, except in
cases where the employer contests the findings of the labor employment and
enforcement officer and raises issues supported by documentary proofs which were
not considered in the course of inspection.

xxx
In the case before us, Regional Director Macaraya acted as the duly
authorized representative of the Secretary of Labor and Employment and it
was within his power to issue the compliance order to SMC. In addition, the
Court agrees with the Solicitor General that the petitioner did not deny that it
was not paying Muslim holiday pay to its non-Muslim employees. Indeed,
petitioner merely contends that its non-Muslim employees are not entitled to
Muslim holiday pay. Hence, the issue could be resolved even without
documentary proofs. In any case, there was no indication that Regional
Director Macaraya failed to consider any documentary proof presented by
SMC in the course of the inspection.
Anent the allegation that petitioner was not accorded due process, we
sustain the Court of Appeals in finding that SMC was furnished a copy of the
inspection order and it was received by and explained to its Personnel
Officer. Further, a series of summary hearings were conducted by DOLE
on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Thus, SMC
could not claim that it was not given an opportunity to defend itself.

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

We also deny the claims for Muslim holiday pay for lack of factual and legal
basis. Muslim holidays are legally observed within the area of jurisdiction of the
present Autonomous Region for Muslim Mindanao (ARMM), particularly in the
provinces of Maguindanao, Lanao del Sur, Sulu and Tawi-Tawi. It is only upon
Presidential Proclamation that Muslim holidays may be officially observed outside the
Autonomous Region and generally extends to Muslims to enable them the observe
said holidays.[11]
The decision has no consequence to issues before us, and as aptly
declared by Undersecretary Espaol, it can never be a benchmark nor a
guideline to the present case x x x.
[12]

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

SO ORDERED.
Davide, Jr.,
JJ., concur.

C.J.,

(Chairman),

Puno,

Pardo, and Ynares-Santiago,

Presidential Proclamation No. 1198 (26 October 1973) provides:

All private corporations, offices, agencies and entities or
establishments operating within the provinces and cities
enumerated herein shall observe the legal holidays as proclaimed,
provided, however, that all Muslim employees working outside of
the Muslim provinces and cities shall be excused from work during
the observance of the Muslim holidays as recognized by law
without diminution or loss of wages during the said period xxx.
Considering that all private corporations, offices, agencies, and
entities or establishments operating within the designated Muslim
provinces and cities are required to observe Muslim holidays, both
Muslims and Christians working within the Muslim areas may not
report for work on the days designated by law as Muslim holidays.