Manila Terminal V CIR

9/4/2016
PHILIPPINEREPORTSANNOTATEDVOLUME091
[No.L4148.July16,1952]
MANILA TERMINAL COMPANY, INC., petitioner vs. THE
COURT OF INDUSTRIAL RELATIONS and MANILA
TERMINAL RELIEF AND MUTUAL AID ASSOCIATION,
respondents.
1. COURT OF INDUSTRIAL RELATIONS JURISDICTION TO
AWARD MONEY JUDGMENT.Under its power to settle
disputes between employer and employee, the Court of Industrial
Relationshasjurisdictiontoawardamoneyjudgmentcoveringpast
overtimecompensation.
2. EMPLOYER AND EMPLOYEE EIGHTHOUR LABOR LAW
OVERTIME COMPENSATION CONTRACT TO WORK FOR
MORE THAN EIGHT HOURS AT SPECIFIED DAILY WAGE
NOTSUFFICIENTTOCOVEROVERTIMECOMPENSATION.
Where the contract of employment requires work for more than
eighthoursatspecifiedwagesperday,withoutprovidingforafixed
hourlyrateorthatthedailywagesincludeovertimepay,saidwages
cannot
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1U.S.vs.Cuison,20Phil.,439.
626
626
PHILIPPINEREPORTSANNOTATED
ManilaTerminalCo.,Inc.vs.Ct.ofIndustrialRelations
be considered as including overtime compensation required under

theEightHourLaborLaw.
3. ID. ID. ID. OVERTIME COMPENSATION CANNOT BE
WAIVED.The right of employees and laborers to overtime
compensationcannotbewaivedexpresslyorimpliedly.
4. ID. ID. ID. ID. ESTOPPEL AND LACHES CANNOT BAR
RECOVERY OF OVERTIME COMPENSATION.Theprinciple
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of estoppel and laches cannot be invoked against the recovery of

overtimecompensation,becausethatwouldbecontrarytothespirit
oftheEightHourLaborLawandbecausetheemployeeorlaborer,
who cannot renounce his right to extra compensation, may be
compelledtoaccomplishthesamethingbymeresilenceorlapseof
time.
5. ID.ID.ID.NULLITY OR ILLEGALITY OF EMPLOYMENT
CONTRACT DOES NOT BAR RECOVERY OF OVERTIME
COMPENSATION.The fact that no permit has previously been
obtained from the proper authorities for the performance of
overtimework,orthattheemploymentcontractisillegalbecauseit
does not provide for overtime compensation, will not prevent
recoverybytheemployeeorlaborer,becausetheEightHourLabor
Law is intended for the benefit of laborers and employees, and
because the law makes only the employer criminally liable for any
violation.
6. ID.
ID.
BACK
OVERTIME
COMPENSATION
COLLECTIBLE.Assections3and5ofCommonwealthActNo.
444,theEightHourLaborLaw,expresslyprovidesforthepayment
of extra compensation in cases where overtime services are
required,theemployeesorlaborersareentitledtocollectsuchextra
compensation for past overtime work. To hold otherwise would
allow an employer to violate the law by simply failing to provide
forandpayovertimecompensation.
PETITION for review by certiorari of a decision of the Court of

IndustrialRelations.
ThefactsarestatedintheopinionoftheCourt.
Perkins,PonceEnrile&Contrerasforpetitioner.
AntonioV.Raquiza,HonestoRicobalandPerfectoE.Llacar
forrespondentAssociation.
Mariano R. Padilla for respondent Court of Industrial
Relations.
PARS,C.J.:
On September 1, 1945, the Manila Terminal Company, Inc.,
hereinaftertobereferredtoasthepetitioner,under
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VOL.91,JULY16,1962
627
tookthearrastreserviceinsomeofthepiersinManila'sPortAreaat
the request and under the control of the United States Army. The
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petitionerhiredsomethirtymenaswatchmenontwelvehourshifts
atacompensationofP3perdayforthedayshiftandP6perdayfor
the night shift. On February 1, 1946, the petitioner began the
postwaroperationofthearrastreserviceattherequestandunderthe
control of the Bureau of Customs, by virtue of a contract entered
into with the Philippine Government. The watchmen of the
petitioner continued in the service with a number of substitutions
andadditions,theirsalarieshavingbeenraisedduringthemonthof
February to P4 per day for the day shift and P6.25 per day for the
night shift. On March 28, 1947, Dominador Jimenez, a member of
theManilaTerminalReliefandMutualAidAssociation,sentaletter
to the Department of Labor, requesting that the matter of overtime
pay be investigated, but nothing was done by the Department. On
April 29, 1947, Victorino Magno Cruz and five other employees,
also members of the Manila Terminal Relief and Mutual Aid
Association,fileda5pointdemandwiththeDepartmentofLabor,
including overtime pay, but the Department again failed to do
anythingaboutthematter.OnMay24,1947,thepetitionerinstituted
thesystemofstricteighthourshifts.OnJune19,1947,theManila
PortTerminalPoliceAssociation,notregisteredinaccordancewith
theprovisionsofCommonwealthActNo.213,filedapetitionwith
the Court of Industrial Relations. On July 16, 1947, the Manila
TerminalReliefandMutualAidAssociationwasorganizedforthe
first time, having been granted certificate No. 375 by the
DepartmentofLabor.OnJuly28,1947,theManilaTerminalRelief
and Mutual Aid Association filed an amended petition with the
Court of Industrial Relations praying, among others, that the
petitionerbeorderedtopaytoitswatchmenorpoliceforceovertime
pay from the commencement of their employment. On May 9,
1949,byvirtueofCustomsAdminis
628
628
trativeOrderNo.81andExecutiveOrderNo.228ofthePresident
of the Philippines, the entire police force of the petitioner was
consolidated with the Manila Harbor Police of the Customs Patrol
Service, a Government agency under the exclusive control of the
CommissionerofCustomsandtheSecretaryofFinance.TheManila
Terminal Relief and Mutual Aid Association will hereafter be
referredtoastheAssociation.
JudgeV.JimenezYansonoftheCourtofIndustrialRelationsin
hisdecisionofApril1,1950,asamendedonApril18,1950,while
dismissingotherdemandsoftheAssociationforlackofjurisdiction,
orderedthepetitionertopaytoitspoliceforce
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(a) Regular or base pay corresponding to four hours' overtime

plus25percentthereofasadditionalovertimecompensationforthe
periodfromSeptember1,1945toMay24,1947
(b)Additionalcompensationof25percenttothosewhoworked
from6:00p.m.to6:00a.m.duringthesameperiod
(c) Additional compensation of 50 per cent for work performed
onSundaysandlegalholidaysduringthesameperiod
(d)Additionalcompensationof50percentforworkperformed
onSundaysandlegalholidaysfromMay24,1947toMay9,1949
and
(e)Additionalcompensationof25percentforworkperformedat
nightfromMay24,1947toMay9,1949.
With reference to the pay for overtime service after the
watchmenhadbeenintegratedintotheManilaHarborPolice,Judge
Yansonruledthatthecourthasnojurisdictionbecauseitaffectsthe
BureauofCustoms,aninstrumentalityoftheGovernmenthavingno
independent personality and which cannot be sued without the
consentoftheState.(Metranvs.Paredes,45Off.Gaz.,2835.)
The petitioner filed a motion for reconsideration. The
Associationalsofiledamotionforreconsiderationinso
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VOL.91,JULY16,1952
629
farasitsotherdemandsweredismissed.JudgeYanson,concurredin
by Judge Jose S. Bautista, promulgated on July 13, 1950, a
resolution denying both motions for reconsideration. Presiding
Judge Arsenio C. Roldan, in a separate opinion concurred in by
Judge Modesto Castillo, agreed with the decision of Judge Yanson
of April 1, 1950, 33 to the dismissal of other demands of the
Association,butdissentedtherefromastothegrantingofovertime
pay.Inaseparatedecisiveopinion,JudgeJuanS.Lantingconcurred
inthedismissalofotherdemandsoftheAssociation.Withrespectto
overtimecompensation,JudgeLantingruled:
1. The decision under review should be affirmed in so far as it
grantscompensationforovertimeonregulardays(notSundaysand
legalholidays)duringtheperiodfromthedateofentrancetodutyto
May 24, 1947, such compensation to consist of the amount
correspondingtothefourhours'overtimeattheregularrateandan
additionalamountof25percentthereof.
2. As to the compensation for work on Sundays and legal
holidays, the petitioner should pay to its watchmen the
compensationthatcorrespondstotheovertime(inexcessof8hours)
attheregularrateonly,thatis,withoutanyadditionalamount,thus
modifyingthedecisionunderreviewaccordingly.
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3.Thewatchmenarenotentitledtonightdifferentialpayforpast
services,andthereforethedecisionshouldbereversedwithrespect
thereto.
The petitioner has filed the present petition for certiorari. Its
various contentions may be briefly summed up in the following
propositions: (1) The Court of Industrial Relations has no
jurisdiction to render a money judgment involving obligations in
arrears. (2) The agreement under which its police force were paid
certain specific wages for twelvehour shifts, included overtime
compensation. (3) The Association is barred from recovery by
estoppelandlaches.(4)thenullityorinvalidityofthe
630
630
employmentcontractprecludesanyrecoverybytheAssociation.(5)
Commonwealth Act No. 4444 does not authorize recovery of back
overtimepay.
The contention that the Court of Industrial Relations has no
jurisdictiontoawardamoneyjudgementwasalreadyoverruledby
thisCourtinG.R.No.L4337,Detective&ProtectiveBureau,Inc.
vs. Court of Industrial Relations and United Employees Welfare
Association, 90 Phil., 665, in this wise: "It is also argued that the
respondentcourthasnojurisdictiontoawardovertimepay,whichis
amoneyjudgment.WebelievethatunderCommonwealthActNo.
103 the Court is empowered to make the order for the
purpose of
1
settlingdisputesbetweentheemployerandemployee .Asamatter
offactthisCourthasconfirmedanorderoftheCourtofIndustrial
RelationsrequiringtheElksClubtopaytoitsemployeesacertain
sumofmoneyasovertimebackwagesfromJune3,1939toMarch
13, 1941. This, in spite of the allegation of lack or excess of
jurisdictiononthepartofsaidcourt.(45Off.Gaz.,382980Phil.,
272)"
Theimportantpointstressedbythepetitioneristhatthecontract
between it and the Association upon the commencement of the
employmentofitswatchmenwastotheeffectthatthelatterwereto
worktwelvehoursadayatcertainratesofpay,includingovertime
compensation,namely,P3perdayforthedayshiftandP6perday
fornightshiftbeginningSeptember1,1945,andP4perdayforthe
dayshiftandP6.25perdayforthenightshiftsinceFebruary,1946.
The record does not bear out these allegations. The petitioner has
reliedmerelyonthefactsthatitswatchmenhadworkedontwelve
hour shifts at specific wages per day and that no complaint was
madeaboutthematteruntil,first,onMarch28,1947and,secondly,
onApril29,1947.
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_______________
1Cf.TheShellCo.vs.NationalLaborUnion,46Off.Gaz.Supp.1,p.9781Phil.,
315.
631
VOL.91,JULY16,1952
631
Intimesofacuteunemployment,thepeople,urgedbytheinstinctof
selfpreservation,gofromplacetoplaceandfromofficetoofficein
search for any employment, regardless of its terms and conditions,
theirmainconcerninthefirstplacebeingadmissiontosomework.
Speciallyforpositionsrequiringnospecialqualifications,applicants
wouldbegoodasrejectediftheyevertrytobeinquisitiveaboutthe
hours of work or the amount of salary, or ever attempt to dictate
their terms. The petitioner's watchmen must have railroaded
themselvesintotheiremployment,sotospeak,happyinthethought
thattheywouldthenhaveanincomeonwhichtosubsist.But,atthe
sametime,theyfoundthemselvesrequiredtoworkfortwelvehours
a day. True, there was an agreement to work, but can it fairly be
supposedthattheyhadthefreedomtobargaininanyway,muchless
toinsistintheobservanceoftheEightHourLaborLaw?
AswasaptlysaidinFloydvs.DuBoisSoapCo.,1942,317U.S.
596,63Sup.Ct.1596CCHLaborCases,Par.51,147,"Acontract
of employment, which provides for a weekly wage for a specified
number of hours, sufficient to cover both the statutory minimum
wage and overtime compensation, if computed on the basis of the
statutory minimum, and which makes no provision for a fixed
hourlyrateorthattheweeklywageincludesovertimecompensation,
doesnotmeettherequirementsoftheAct."
Moreover,wenotethatafterthepetitionerhadinstitutedthestrict
eighthour shifts, no reduction was made in the salaries which its
watchmen received under the twelvehour arrangement. Indeed, as
admitted by the petitioner, "when the members of the respondent
unionwereplacedonstricteighthourshifts,thelowestsalaryofall
themembersofrespondentunionwasP165amonth,orP5.50daily,
for both day and night shifts." Although it may be argued that the
salary for the night shift was somewhat lessened, the fact that the
ratefortheday
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shiftwasincreasedinasensetendstomilitateagainstthecontention
that the salaries given during the twelvehour shifts included
overtimecompensation.
Petitioner'sallegationthattheAssociationhadacquiescedinthe
twelvehourshiftsformorethan18months,isnotaccurate,because
thewatchmeninvolvedinthiscasedidnotentertheserviceofthe
petitioner, at one time, on September 1, 1945. As Judge Lanting
found,"onlyoneofthementeredtheserviceofthecompanyonsaid
date,veryfewduringtherestofsaidmonth,someduringtherestof
that year (1945) and in 1946, and very many in 1947, 1948 and
1949."
ThecaseatbarisquiteonallfourswiththecaseofDetective&
ProtectiveBureau,Inc.vs.CourtofIndustrialRelationsandUnited
Employees Welfare Association, supra, in which the facts were as
follows:"Therecorddisclosesthatuponpetitionproperlysubmitted,
saidcourtmadeaninvestigationandfoundthatthemembersofthe
United Employees Welfare Association (hereafter called the
Association) were in the employ of the petitioner Detective 1
ProtectiveBureau,Inc.(hereincalledtheBureau)whichisengaged
in the business of furnishing security guards to commercial and
industrial establishments, paying to said members monthly salaries
out of what it received from the establishments benefited by guard
service.Theemploymentcalledfordailytoursofdutyformorethan
eight hours, in addition to work on Sundays and holidays.
Nonetheless the members performed their labors without receiving
extracompensation."Theonlydifferenceisthat,whileinsaidcase
the employees concerned were paid monthly salaries, in the case
nowbeforeusthewageswerecomputeddaily.Inthecasecited,we
heldthefollowing:
"It appears that the Bureau had been granting the members of the
Association, every month, 'two days off' days in which they rendered no
service,althoughtheyreceivedsalaryforthewhole
633
VOL.91,JULY16,1952
688
month. Said Bureau contended below that the pay corresponding to said 2
day vacation corresponded to the wages for extra work. The court rejected
the contention, quite properly we believe, because in the contract there was
no agreement to that effect and such agreement, if any, would probably be
contrarytotheprovisionsoftheEightHourLaw(ActNo.444,sec.6)and
wouldbenullandvoidabinitio.
"It is argued here, in opposition to the payment, that until the
commencement of this litigation the members of the Association never
claimedforovertimepay.Thatmaybetrue.Neverthelessthelawgivesthem
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therighttoextracompensation.Andtheycouldnotbeheldtohaveimpliedly
waived such extra compensation, for the obvious reason that they could not
haveexpresslywaivedit."
The foregoing pronouncements are in point. The Ask sociation

cannot be said to have impliedly waived the right to overtime
compensation, for the obvious reason that they could not have
expresslywaivedit."
The principle of estoppel and laches cannot well be invoked
againsttheAssociation.Inthefirstplace,itwouldbecontrarytothe
spirit of the EightHour Labor Law, under which, as already seen,
the laborers cannot waive their right to extra compensation. In the
secondplace,thelawprincipallyobligatestheemployertoobserve
it, so much so that it punishes the employer for its violation and
leavestheemployeeorlaborerfreeandblameless,Inthethirdplace,
theemployeeorlaborerisinsuchadisadvantageouspositionasto
be naturally reluctant or even apprehensive in asserting any claim
which may cause the employer to devise a way for exercising his
righttoterminatetheemployment.
If the principle of estoppel and laches is to be applied, it may
bring about a situation, whereby the employee or laborer, who
cannot expressly renounce their right to extra compensation under
the EightHour Labor Law, may be compelled to accomplish the
samethingbymeresilenceorlapseoftime,therebyfrustratingthe
purposeofthelawbyindirection.
634
634
While counsel for the petitioner has cited authorities in support of

the doctrine invoked, there are also authorities pointed out in the
opinion of Judge Lanting to the contrary. Suffice it to say, in this
connection,thatweareinclinedtoruleadverselyagainstpetitioner
forthereasonsalreadystated.
The argument that the nullity or invalidity of the employment
contractprecludesrecoverybytheAssociationofanyovertimepay
is also untenable. The argument, based on the supposition that the
parties are in pari delicto, was in effect turned down in Gotamo
LumberCo.vs.CourtofIndustrialRelations,*47Off.Gaz.,3421,
wherein we ruled: "The petitioner maintains that as the overtime
workhadbeenperformedwithoutapermitfromtheDepartmentof
Labor, no extra compensation should be authorized. Several
decisionsofthiscourtareinvolved.Butthosedecisionswerebased
on the reasoning that as both the laborer and employer were duty
boundtosecurethepermitfromtheDepartmentofLabor,bothwere
inparidelicto.However,thepresentlawineffectimposedthatduty
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upon the employer (C. A. No. 444). Such employer may not
thereforebeheardtopleadhisownneglectasexemptionordefense.
"The employee in rendering extra service at the request of his
employerhasarighttoassumethatthelatterhascompliedwiththe
requirement of the law, and therefore has obtained the required
permissionfromtheDepartmentofLabor."
Moreover,theEightHourLaw,inprovidingthat"anyagreement
or contract between the employer and the laborer or employee
contrary to the provisions of this Act shall be null and void ab
initio," (Commonwealth Act No. 444, sec. 6), obviously intended
said provision for the benefit of the laborers or employees. The
employer cannot, therefore, invoke any violation of the Act to
exempthimfromliabilityforextracompensation.Thiscon*85Phil.
291.
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VOL.91,JULY16,1952
635
clusionisfurthersupportedbythefactthatthelawmakesonlythe
employercriminallyliableforanyviolation.Itcannotbepretended
that, for the employer to commit any violation of the EightHour
Labor Law, the participation or acquiesence of the employee or
laborerisindispensable,becausethelatter,inviewofhisneedand
desiretolive,cannotbeconsideredasbeingonthesamelevelwith
the employer when it comes to the question of applying for and
acceptinganemployment.
Petitioner also contends that Commonwealth Act No. 444 does
not provide for recovery of back overtime pay, and to support this
contentionitmakesreferencetotheFairLaborStandardsActofthe
United States which provides that "any employer who violates the
provisionsofsection206andsection207ofthistitleshallbeliable
totheemployeeoremployeesaffectedintheamountoftheirunpaid
minimumwagesortheirunpaidovertimecompensationasthecase
maybe,"aprovisionnotincorporatedinCommonwealthActNo.
444,ourEightHourLaborLaw.Wecannotagreetotheproposition,
because sections 3 and 5 of Commonwealth Act 444 expressly
provides for the payment of extra compensation in cases where
overtimeservicesarerequired,withtheresultthattheemployeesor
laborers are entitled to collect such extra compensation for past
overtimework.Toholdotherwisewouldbetoallowanemployerto
violatethelawbysimply,asinthiscase,failingtoprovideforand
payovertimecompensation.
The point is stressed that the payment of the claim of the
Associationforovertimepaycoveringaperiodofalmosttwoyears
mayleadtothefinancialruinofthepetitioner,tothedetrimentofits
employees themselves. It is significant, however, that not all the
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petitioner's watchmen would receive back overtime pay for the

whole period specified in the appealed decision, since the record
shows that the great majority of the watchmen were admitted in
1946and1947,andeven1948and1949.At
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636
ManilaTerminalReliefandMutualAidAssn.vs.ManilaTerminal
Co.Inc.,etal.
anyrate,weareconstrainedtosustaintheclaimoftheAssociation
asamatterofsimplejustice,consistentwiththespiritandpurpose
oftheEightHourLaborLaw.Thepetitioner,inthefirstplace,was
requiredtocomplywiththelawandshouldthereforebemadeliable
fortheconsequencesofitsviolation.
Itishightimethatallemployerswerewarnedthatthepublicis
interested in the strict enforcement of the EightHour Labor Law.
This was designed not only to safeguard the health and welfare of
thelaboreroremployee,butinawaytominimizeunemploymentby
forcing employers, in cases where more than 8hour operation is
necessary, to utilize different shifts of laborers or employees
workingonlyforeighthourseach.
Wherefore, the appealed decision, in the form voted by Judge
Lanting, is affirmed, it being understood that the petitioner's
watchmenwillbeentitledtoextracompensationonlyfromthedates
theyrespectivelyenteredtheserviceofthepetitioner,hereaftertobe
duly determined by the Court of Industrial Relations. So ordered,
withoutcosts.
Feria, Pablo, Bengzon, Padilla, Tuason, Bautista Angelo,
andLabrador,JJ.,concur.
Decisionaffirmed.
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Manila Terminal V CIR

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be considered as including overtime compensation required under

of estoppel and laches cannot be invoked against the recovery of

PETITION for review by certiorari of a decision of the Court of

(a) Regular or base pay corresponding to four hours' overtime

The foregoing pronouncements are in point. The Ask sociation

While counsel for the petitioner has cited authorities in support of

petitioner's watchmen would receive back overtime pay for the

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