Labor Law 1
PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY
V NLRC
213 SCRA 621
GUTIERREZ JR; September 4, 1992
NATURE
PETITION to review the resolutions of the National Labor
Relations Commission
FACTS
- Petitioner, PFDA is a GOCC created by PD977.
- November 1, 1984, Wage Order No. 6 was already in effect.
After bidding, Odin Security Agency (Odin) and PFDA entered
into a Security Services Contract for the Iloilo Fishing Port
Complex on November 11, 1985. The compensation to be paid
for the security guards would supposedly include, among
others, the minimum wage based on Wage Order No. 5 (NOTE:
not based on the latest Wage Order, which was already in effect
1 yr before the contract was entered into).
- On October 24, 1987, during the effectivity of the said Security
Agreement, Odin requested PFDA to adjust the contract rate in
accordance with Wage Order No. 6. Among the important
provisions in the said Order was that the increases in the
minimum wage and allowance rates shall be borne by the
principal/client and the contracts shall be deemed amended
accordingly (Sec9). The Security Services Contract provided for
an automatic escalation of the rate per guard in case of wage
increase. The request for adjustment was made further on two
more occasions but were ignored by PFDA. So, Odin filed a
complaint for unpaid amound of re-adjustment rate under Wage
Order No. 6 together with wage salary differentials from the
integration of the COLA under Wage Order No. 1, 2, 3, and 5
pursuant to EO 178 plus P25k as atty’s fees and cost of
litigation. PFDA filed a Motion to Dismiss (no jurisdiction,
security guards no legal personality, if ever they have, action
involves interpretation of contract – Labor Arbiter has no
authority)
- LA: dismissed complaint: PFDA under scope and jurisdiction of
the Civil Service Commission – Odin appealed to the NLRC
- NLRC: set aside order, entered decision in favor of Odin – MFR
filed by PFDA (due process violation, resolution granting relief
without legal basis; if with legal basis for the award, stipulation
allowing an increase of wage rate void ab initio) – MFR denied
Petitioner’s contention
(1) The National Labor Relations Commission failed to ob serve
due process
(2) Granting the award of the National Labor Relations
Commission is valid, reliefs granted are not legal
(3) Assuming the award complies with the requirements of due
process, the National Labor Relations Commission erred when it
failed to declare the contract for security services void.
ISSUES
1. WON NLRC had jurisdiction over the case
2. WON due process was observed
3. WON the contract for security services void
4. WON PFDA should carry the burden of the wage increase
HELD
1. YES
Ratio Notwithstanding that the petitioner is a government
agency, its liabilities, which are joint and solidary with that of
the contractor, are provided in Articles 106, 107 and 109 of the
Labor Code. This places the petitioner's liabilities under the
scope of the NLRC. Moreover, Book Three, Title 11 on Wages
specifically provides that the term "employer" includes any
person acting directly or indirectly in the interest of an
employer in relation to an employee and shall include the
Government and all its branches, subdivisions and
instrumentalities, all government-owned or controlled
corporations and institutions as well as non-profit private
institutions, or organizations (Art. 97 [b], Labor Code..)
Reasoning
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- Generally, since petitioner is a GOCC with a special charter, it
is under the scope of the civil service. However, the guards are
not employees of PFDA. Since no EER, can’t invoke jurisdiction
of Civil Service Commission. The contract entered was merely
job contracting, PFDA being an indirect employer. Therefore,
under NLRC.
2. YES
Ratio A decision on the merits is proper where the issues raised
by the parties did not involve intricate questions of law.
Reasoning
- The Wage Orders are statutory and mandatory and can not be
waived. The petitioner can not escape liability since the law
provides the joint and solidary liability of the principal and the
contractor for the protection of the laborers. There can be no
question that the security guards are entitled to wage
adjustments. The computation of the amount due to each
individual guard can be made during the execution of the
decision where hearings can be held. (See Section 3, Rule VIII of
the New Rules of Procedure of the NLRC)
3. ESTOPPED FROM QUESTIONING VALIDITY
Reasoning
- Cannot question validity on the ground that it did not comply
with the bidding requirements set by law. Undeniably, services
were rendered already and the petitioner benefitted from said
contract for two (2) years now.
4. YES. But Odin would pay first, subject to reimbursement of ½
from PFDA.
Ratio In job contracting, the petitioner as principal is jointly and
severally liable with the contractor for the payment of unpaid
wages. The Statutory basis for the joint and several liability is
set forth in Articles 107, and 109 in relation to Article 106 of the
Labor Code.
- Eagle Security vs. NLRC (explained interpretation of
wage order): If explicitly say that payment of the increase are
“to be borne” by the principal or client, doesn’t mean that
principal would DIRECTLY pay the security guards the wage and
allowance because NO PRIVITY of CONTRACT between them.
Security guards’ contractual relationship is with their immediate
employer (Security Agency). Security agency tasked as an
employer with the payment of the wages. In order for the
security agency to comply with the new wage order and
allowance rates, amendment of the contract between security
agency and the principal as to the consideration to cover the
service contractor the payment of the increases mandated
should be done. In the end, therefore, ultimate liability for
the payment of the increases rests with the principal."
Reasoning
- As was held in the stated case, the security guard’s direct
recourse is from their direct employer – Odin. Also Odin is
equally guilty when it entered into the contract with PFDA
without considering Wage Order No. 6, which was already in
effect on the date when they entered into the bidding for the
security contract.
- on the fixing of contract rate of security agencies by
the Philippine Association of Detective and Protective
Agency Operators: no moment. Their memo was not
necessary to make Wage Order No. 6 effective upon Odin; it
was merely an internal agreement among the operators to set
the ceiling of the contract rates. This was aimed to curb the
practice of security agencies which were in cutthroat
competition to request for wage adjustments after proposals
were accepted in good faith to the prejudice of the parties.
-The private respondent is the employer of the security guards
and as the employer, it is charged with knowledge of labor laws
and the adequacy of the compensation that it demands for
contractual services is its principal concern and not any other's.
By filing the complaint in its own behalf and in behalf of the
security guards, the private respondent wishes to exculpate
itself from liability on the strength of the ruling in the Eagle
case that the ultimate liability rests with the principal.
Disposition the questioned resolutions of the National Labor
Relations Commission are hereby AFFIRMED with the
modification that both the petitioner and the private respondent
are ORDERED to pay jointly and severally the unpaid wage
Labor Law 1
differentials under Wage O rder No. 6 without prejudice to the
right of reimbursement for one-half of the amount which either
the petitioner or the private respondent may have to pay to the
security guards
CHAVEZ V NLRC
[PAGE 59]
MAYON HOTEL AND RESTAURANTS V ADANA
458 SCRA 609
PUNO; May 16, 2005
NATURE
This is a petition for certiorari to reverse and set aside the
Decision issued by the Court of Appeals and the Resolution
denying petitioners’ motion for reconsideration.
FACTS
- Petitioner Mayon Hotel & Restaurant is a single proprietor
business registered in the name of petitioner Pacita O. Po,
whose mother, petitioner Josefa Po Lam, manages the
establishment. The hotel and restaurant employed about
sixteen employees.
- Due to the expiration and non-renewal of the lease contract
for the rented space occupied by the said hotel and restaurant
at Rizal Street, the hotel operations of the business were
suspended. The operation of the restaurant was continued in its
new location at Elizondo Street, Legazpi City, while waiting for
the construction of a new Mayon Hotel & Restaurant. Only nine
of the sixteen employees continued working at its new site.
- On various dates, the 16 employees filed complaints for
underpayment of wages and other money claims against
petitioners.
- Executive Labor Arbiter rendered a Joint Decision in favor of
the employees.
- On appeal to the NLRC, the decision of the Labor Arbiter was
reversed, and all the complaints were dismissed.
- Respondents filed a motion for reconsideration with the NLRC
and when this was denied, they filed a petition for certiorari
with the CA which rendered the now assailed decision.
ISSUE
WON the cost of the food and snacks provided to respondents
as facilities should have been included in reckoning the
payment of respondents’ wages
HELD
NO
- While petitioners submitted Facility Evaluation Orders issued
by the DOLE Regional Office whereby the cost of meals given by
[petitioners] to [respondents] were specified for purposes of
considering the same as part of their wages, We cannot
consider the cost of meals in the Orders as applicable to
[respondents]. [Respondents] were not interviewed by the
DOLE as to the quality and quantity of food appearing in the
applications of [petitioners] for facility evaluation prior to its
approval to determine whether or not [respondents] were
indeed given such kind and quantity of food. Also, there was no
evidence that the quality and quantity of food in the Orders
were voluntarily accepted by [respondents]. On the contrary;
while some [of the respondents] admitted that they were given
meals and merienda, the quality of food serve[d] to them were
not what were provided for in the Orders and that it was only
when they filed these cases that they came to know about said
Facility Evaluation Orders. [Petitioner] Josefa herself, who
applied for evaluation of the facility (food) given to
[respondents], testified that she did not inform [respondents]
concerning said Facility Evaluation Orders.
- Even granting that meals and snacks were provided and
indeed constituted facilities, such facilities could not be
deducted without compliance with certain legal requirements.
The employer simply cannot deduct the value from the
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employee's wages without satisfying the following: (a) proof
that such facilities are customarily furnished by the trade; (b)
the provision of deductible facilities is voluntarily accepted in
writing by the employee; and (c) the facilities are charged at
fair and reasonable value. The records are clear that
petitioners failed to comply with these requirements. There
was no proof of respondents’ written authorization. Indeed, the
Labor Arbiter found that while the respondents admitted that
they were given meals and merienda, the quality of food served
to them was not what was provided for in the Facility Evaluation
Orders and it was only when they filed the cases that they came
to know of this supposed Facility Evaluation Orders. Petitioner
Josefa Po Lam herself admitted that she did not inform the
respondents of the facilities she had applied for.
- More important, we note the uncontroverted testimony of
respondents on record that they were required to eat in the
hotel and restaurant so that they will not go home and there is
no interruption in the services of Mayon Hotel. Food or snacks
or other convenience provided by the employers are deemed as
supplements if they are granted for the convenience of the
employer. The criterion in making a distinction between a
supplement and a facility does not so much lie in the kind (food,
lodging) but the purpose. Considering, therefore, that hotel
workers are required to work different shifts and are expected
to be available at various odd hours, their ready availability is a
necessary matter in the operations of a small hotel, such as
petitioners’ business.
Disposition petition is hereby DENIED. The Decision of
January 17, 2003 of the Court of Appeals in CA-G.R. SP No.
68642 upholding the Joint Decision of July 14, 2000 of the Labor
Arbiter in RAB V Case Nos. 04-00079-97 and 04-00080-97 is
AFFIRMED, with the following MODIFICATIONS:
(1) Granting separation pay of one-half (1/2) month
for every year of service to respondents Loveres,
Macandog and Llarena;
(2) Granting retirement pay for respondents Guades,
Nicerio, and Alamares;
(3) Removing the deductions for food facility from the
amounts due to all respondents;
(4) Awarding moral damages of P20,000.00 each for
respondents Loveres, Macandog, Llarena, Guades,
Nicerio, Atractivo, and Broñola;
(5) Deleting the award of exemplary damages of
P10,000.00 from all respondents except Loveres,
Macandog, Llarena, Guades, Nicerio, Atractivo, and
Broñola; and
(6) Granting attorney’s fees of P10,000.00 each to all
respondents.
The case is REMANDED to the Labor Arbiter for the
RECOMPUTATION of the total monetary benefits awarded and
due to the employees concerned in accordance with the
decision. The Labor Arbiter is ORDERED to submit his
compliance thereon within thirty (30) days from notice of this
decision, with copies furnished to the parties.
AKLAN ELECTRIC V NLRC
[PAGE 144]
INTERNATIONAL SCHOOL ALLIANCE V QUISUMBING
[PAGE 32]
PHILEX GOLD VS PHILEX BULAWAN SUPERVISORS
468 SCRA 111
AZCUNA; August 25, 2005
NATURE
Petition for certiorari to review CA decision
Labor Law 1
FACTS
- Philex Gold operates a gold mining concession in Sipalay,
Negros Occidental where the sole and exclusive bargaining
representative of all supervisors is the Philex Bulawan
Supervisors Union. On July 1, 1997, Philex Gold made the
employees of its Benguet operations supervisory employees in
its Sipalay operations.
- As it turned out, the salaries of the Padcal employees were
higher than those locally hired in Bulawan despite the fact that
they were of similar rank and classification doing parallel duties
and functions.
- The union filed a complaint against Philex for discriminatory
wage policy which Article 248 (e)1 of the Labor Code prohibits
and defines as Unfair Labor practice.
- The Voluntary Arbitrator initially found for the Union but on
motion for reconsideration reversed its original order and
instead ordered an P800 across the board increase. In its order,
the Voluntary Arbitrator also decreed that the principal officers
of Philex be solidarily liable for the payment of the increase.
- On appeal to the CA, the original ruling of the arbitrator was
reinstated. Hence this appeal to the SC
ISSUES
1. WON the notice sent through petitioner’s Liaison office can
be considered as notice to counsel
2. WON the petitioners-corporate officer are solidarily liable
3. WON the doctrine of equal pay for equal work should not
remove management prerogative to institute difference in
salary on the basis of seniority, skill, experience, and dislocation
factor in the same class of supervisory workers doing the same
kind of work
HELD
1. NO
- Section 4, Rule III of the NCMB Procedural Guidelines in the
Conduct of Voluntary Arbitration Proceedings states that “where
a party is represented by counsel or authorized representative,
service shall be made on the latter”. As the notice was sent to a
place other than that of the counsel, the receipt of the notice by
the counsel shall be the reckoning date for the 10-day
reglementary period to file a motion for reconsideration.
2. NO
- The corporation is a juridical entity with legal personality
separate and distinct from those acting for and in its behalf, and
in general, from the people comprising it. The rule is that
obligations incurred by the corporation, acting through its
directors, officers and employees, are its sole liabilities. There
are circumstances where the director, trustee or officer of the
corporation may be held solidarily liable with the corporation.
These include acts by these individuals which are in bad faith or
with gross negligence.
3. NO
- In this case, the petitioner failed to differentiate the basic
salary from any kind of salary increase or additional benefit
which may have been given to the Padcal supervisors due to
their seniority, experience and other factors. The records only
show that an ex-Padcal supervisor is paid a higher salary than a
locally hired supervisor of he same rank. The company’s
prerogative must be exercised in good faith and with due
regard to the rights of labor. A priori, they are not absolute
prerogatives but are subject to legal limits, collective bargaining
agreements, and the general principles of fair play and justice.
Disposition Petition is denied
BANKARD EMPLOYEES UNION V NLRC (BANKARD
INC)
423 SCRA 148
CARPIO-MORALES; February 17, 2004
1
Art 248 (e) – to discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership in any
labor organization …
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FACTS
- Bankard, Inc. (Bankard) classifies its employees by levels. On
May 28, 1993, its Board of Directors approved a "New Salary
Scale" for the purpose of making its hiring rate competitive in
the industry’s labor market. The "New Salary Scale" increased
the hiring rates of new employees. Accordingly, the salaries of
employees who fell below the new minimum rates were also
adjusted to reach such rates under their levels.
- Bankard’s move drew the Bankard Employees Union-WATU
(petitioner), the duly certified exclusive bargaining agent of the
regular rank and file employees of Bankard, to press for the
increase in the salary of its old, regular employees. Bankard
took the position, however, that there was no obligation on the
part of the management to grant to all its employees the same
increase in an across-the-board manner.
- Petitioners filed Notices of Strike on the ground of
discrimination and other acts of Unfair Labor Practice. The
strike was averted, however, when the dispute was certified by
the Secretary of Labor and Employment for compulsory
arbitration.
- NLRC, finding no wage distortion, dismissed the case for lack
of merit. MFR was denied. Hence, this petition for certiorari.
ISSUE
WON the unilateral adoption by an employer of an upgraded
salary scale that increased the hiring rates of new employees
without increasing the salary rates of old employees amounts to
discrimination
HELD
NO
Ratio Absent any indication that the voluntary increase of
salary rates by an employer was done arbitrarily and illegally
for the purpose of circumventing the laws or was devoid of any
legitimate purpose other than to discriminate against the
regular employees, this Court will not step in to interfere with
this management prerogative.
Reasoning
- Petitioner cannot make a contrary classification of private
respondent’s employees without encroaching upon recognized
management prerogative of formulating a wage structure, in
this case, one based on level.
- While seniority may be a factor in determining the wages of
employees, it cannot be made the sole basis in cases where the
nature of their work differs. Moreover, for purposes of
determining the existence of wage distortion, employees cannot
create their own independent classification and use it as a basis
to demand an across-the-board increase in salary.
- Apart from the findings of fact of the NLRC and the Court of
Appeals that some of the elements of wage distortion are
absent, petitioner cannot legally obligate Bankard to correct the
alleged "wage distortion" as the increase in the wages and
salaries of the newly-hired was not due to a prescribed law or
wage order. The wordings of Article 124 are clear. If it was the
intention of the legislators to cover all kinds of wage
adjustments, then the language of the law should have been
broad, not restrictive as it is currently phrased.
- Moreover, Bankard’s right to increase its hiring rate, to
establish minimum salaries for specific jobs, and to adjust the
rates of employees affected thereby is embodied under Section
2, Article V (Salary and Cost of Living Allowance) of the parties’
Collective Bargaining Agreement (CBA).
Disposition present petition is hereby DENIED.
F. MINIMUM WAGES
9.19 WAGES AND THE
CONSTITUTION
MINIMUM WAGES
Labor Law 1
ATOK BIG WEDGE MINING CO INC V ATOK BIG
WEDGE MUTUAL BENEFIT ASSOCIATION
92 PHIL 755
LABRADOR; March 3, 1953
NATURE
PETITION for review by certiorari of a decision of the Court of
Industrial Relations
FACTS
- On September 4, 1950, a demand was submitted to petitioner
by respondent union through its officers for various
concessions, among which were (a) an increase of P0.50 in
wages, (b) commutation of sick and vacation leave if not
enjoyed during the year, (c) various privileges, such as free
medical care, medicine, and hospitalization, (d) right to a closed
shop, check off, etc., (e) no dismissal without prior just cause
and with a prior investigation, etc.
- Some of the demands, were granted by the petitioner, and the
others were rejected. Hearings were held in the respondent
court (CIR)
- After the hearings the respondent court rendered a decision
fixing the minimum wage for the laborers at P3.20, declaring
that additional compensation representing efficiency bonus
should not be included as part of the wage, and making the
award effective from September 4, 1950 (the date of the
presentation of the original demand, instead of from April 5,
1951, the date of the amended demand).
ISSUES
1. WON the Court of Industrial Relations erred in fixing the
minimum wage at P3.20
2. WON the Court of Industrial Relations erred in declaring that
the additional compensation representing the efficiency bonus
should not be included as part of the wage
3. WON the Court of Industrial Relations erred in making the
award effective from September 4, 1950
HELD
1. NO
- Petitioner contends that the laborer and his family need only
the amount of P2.58 for food so this should be the basis for the
determination of his wage, not what he actually spends.
Furthermore, that it is not justifiable to fix a wage higher than
that provided by Republic Act No. 602 and that respondent
union made the demand in accordance with a pernicious
practice of claiming more after an original demand is granted.
- The respondent court found that P2.58 is the minimum
amount actually needed by the laborer and his family. But this
does not mean that it is his actual expense. A person's needs
increase as his means increase. This is true not only as to food
but as to everything else-education, clothing, entertainment,
etc. The law guarantees the laborer a fair and just wage.
The minimum must be fair and just. The "minimum
wage" can by no means imply only the actual minimum.
Some margin or leeway must be provided, over and
above the minimum, to take care of contingencies, such
as increase of prices of commodities and increase in
wants, and to provide means for a desirable
improvement in his mode of living. That the P3 minimum
wage fixed in the law is still far below what is considered a fair
and just minimum is shown by the fact that this amount is only
for the year after the law takes effect, as thereafter the law
fixes it at P4. Neither may it be correctly contended that the
demand for increase is due to an alleged pernicious practice.
Frequent demands for increase are indicative of a healthy spirit
of wakefulness to the demands of a progressing and an
increasingly more expensive world.
2. NO
- Petitioner contends that the efficiency bonus paid the laborer
should have been included in his minimum wage, in the same
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manner as the value of living quarters. Whether or not bonus
forms part of wages depends upon the circumstances or
conditions for its payment. If it is an additional
compensation which the employer promised and agreed
to give without any conditions imposed for its payment,
such as success of business or greater production or
output, then it is part of the wage. But if it is paid only if
profits are realized or a certain amount of productivity
achieved, it can not be considered part of the wages. In
the case at bar, it is not payable to all but to laborers only. It is
also paid on the basis of actual production or actual work
accomplished. If the desired goal of production is not obtained,
or the amount of actual work accomplished, the bonus does not
accrue. It is evident that under the circumstances it is paid only
when the labor becomes more efficient or more productive. It is
only an inducement for efficiency, a prize therefore, not a part
of the wage.
3. NO
- Both parties agreed that any award should be retroactive to
the date of the presentation of the demands, which is
September 4, 1950. The terms of the stipulation are clearly
against petitioner's contention. There being no question as to
its agreement, the same must be given force and effect.
Disposition Dismissed with costs
BENEFICIARIES
PEOPLE V GATCHALIAN
104 PHIL 664
BAUTISTA ANGELO; September 30, 1958
FACTS
- Alfonso Gatchalian owner or manager of the New Life Drug
Store was charged with a violation of Section 3 of Republic Act
No. 602 for paying Expedito Fernandez, a monthly salary of P60
to P90 on or about August 4, 1951, up to and including
December 31, 1953 which is less than that provided for by law,
thereby leaving a difference of an unpaid salary to the latter in
the total amount of P1,016.64 for the period above-mentioned.
- He filed a written motion to dismiss based on two grounds
which in substance merely consist in that the violation charged
does not constitute a criminal offense but carries only a civil
liability, and even if it does, the section of the law alleged to
have been violated does not carry any penalty penalizing it.
- The city Attorney of Zamboanga filed his answer to the motion
to dismiss contending that the law which was violated by the
accused carries with it both civil and criminal liability, the latter
being covered by Section 15 which provides for the penalty for
all willful violations of any of the provisions of the Minimum
Wage Law.
- The Court issued an order dismissing the informations with
costs de oficio and cancelling the bail bond filed by the accused.
The court in the same order directed the Regional
Representative of the Department of Labor to immediately
institute a civil action against the erring employer for the
collection of the alleged underpayment of wages due the
employees.
- A motion for reconsideration having been denied, the
Government took the present appeal.
ISSUE
WON law which violated by the accused carries with it both civil
and criminal liability
HELD
YES
- It is clear from the provisions of Republic Act 602 that while
Section 3 explicitly requires every owner of an establishment
located outside of Manila or its environs to pay each of its
employees P3.00 a day on the effective date of the Act, and one
year thereafter P4.00 a day, Section 15 imposes both a criminal
penalty for a wilful violation of any of the above provisions and
Labor Law 1
a civil liability for any underpayment of wages due an
employee.
- The intention of the law is clear: to slap not only a criminal
liability upon an erring employer for any willful violation of the
acts sought to be enjoined but to attach concurrently a civil
liability for any underpayment he may commit as a result
thereof.
- The law speaks of a willful violation of 11 any of the provisions
of this Act", which is all-embracing, and the same must include
what is enjoined in Section 3 thereof which embodies the very
fundamental purpose for which the law has been adopted.
- The Minimum Wage Law (Republic Act 602) was patterned
after the U. S. Fair Labor Standards Act of 1938.
- While in substance they are similar, they however contain
some differences in their phraseology and in the apportionment
of their provisions. Thus, while Section 15 (a), paragraph 2, of
the Fair Labor Standards Act makes it unlawful for an employer
not to pay the minimum wage prescribed therein, our Minimum
Wage Law does not contain a similar provision. Again, the Fair
Labor Standards Act enumerates in one single section all those
acts which are declared unlawful and are not spread out in
different sections as done in our law.
- It should also be noted that while Section 16 of the Fair Labor
Standards Act which provides for the penalties to be imposed
for any willful violation of the provisions of the Act specifically
states that those penalties refer to acts declared unlawful under
Section 15 of the same Act, our law does not contain such
specification.
- This distinction is very revealing. It clearly indicates that while
the Fair Labor Standards Act intends to subject to criminal
action only acts that are declared unlawful, our law by
legislative fiat intends to punish not only those expressly
declared unlawful but even those not so declared but are
clearly enjoined to be observed to carry out the fundamental
purpose of the law. One such provision is undoubtedly that
which refers to the payment of the minimum wage embodied in
Section 3.
- Indeed, the main objective of the law is to provide for a rock-
bottom wage to be observed and followed by all employers of
all agricultural and industrial establishment. This objective
would be defeated were we to adopt a restrictive interpretation
of the above penal clause, for all employer who knows that he
cannot be amenable to a criminal action would be prone to
subvert the law because if he is detected it would be easy for
him to pay the underpayment and the corresponding interest as
would be the case were he to assume merely a civil liability.
- This would be a mockery and a decision of the law not
contemplated by our lawmaker which would certainly render it
nugatory and abortive. If the law is to survive, it must be real,
militant and effective.
- "The establishment of the maximum wage benefits directly the
low-paid employees, who now receive inadequate wages on
which to support themselves and their families. It benefits all
wage earners indirectly by setting a floor below which their
remuneration cannot fail. It raises the standards of competition
among employers, since it would protect the fair-minded
employer who voluntarily pays a wage that supports the wage
earner from the competition of the employer who operates at
lower cost by reasons of paying his workers a wage below
subsistence. If, in fact, the employer cannot pay a subsistence
wage then he should riot continue his operation unless he
improves his methods and equipment so as to make the
payment of the minimum wage feasible for him otherwise the
ernployer is wasting the toil of the worker and the material
resources used in the employment. Second methods of
operation, progressive and fair-minded Management, and an
adequate minimum wage go hand in hand."
- Counsel for appellee however entertains a different
interpretation. He contends that if Section 15 (a) should be
interpreted in a manner that would embrace a wilful violation of
any of the provisions of the law we would have a situation
where even the officials entrusted with its enforcement may be
held criminally liable which is not contemplated in the law.
A2010 - 177 - Disini
- These provisions are substantive in nature and had been
adopted for common observance by the persons affected. They
cannot be eluded nor subverted lest the erring employer runs
into the sanction of the law. On the other hand, the provisions
adverted to by counsel are merely administrative in character
which had been adopted to set the machinery by which the law
is to be enforced. They are provisions established for
observance by the officials entrusted with its enforcement.
Failure to comply with them would therefore subject them
merely to administrative sanction. They do not come under the
penal clause embodied ed in Section 15(a).
- It is true that Section 3 under which appellee was charged
does not state that it shall be unlawfull for an employer to pay
his employees wages below the minimum wage but merely
requires that the employer shall pay wages not below the
minimum wage. But failure of such declaration does not make
the non-observance of the provisions less unlawful than
otherwise, for such provision embodies precisely the raison
d'etre of the law itself. Indeed, Section is the very provision on
which all the other provisions of the law are built.
Disposition The order appealed from was set aside. It was
ordered that the cases be remanded to the court a quo for
further proceedings, with costs against appellee.
SEPARATE OPINION
REYES JBL [concur]
- The act complained of, therefore, is an offense penalized
tinder the Act. Our duty being to interpret the Act in
consonance with its primary purpose to benefit the laborer, we
should consider that the only sanction for not paying the
minimum wage were to be the payment of interest on the
unpaid salary, the situation of the wage earner would have
been in no way advanced and the Minimum Wage Act would be
practically nullified, for a laborer is in no position to, engage in
protracted litigation with his employer. As pointed in the opinion
of Justice Bautista Angelo the criminal liability is the only
effective sanction under the circumstances.
BENGZON [dissent]
- Sec.. 15, subsections (a) and (e) should be read together
substantially as follows:
Any person who violates any provision of this Act shall be
punished with fines, etc. * * * cxcept that where the
violation consist in paying, the employee less than the
minimum wage the employer shall be punished by
requiring him to satisfy the difference, plus attorney's fees.
- Subsection (e) punishes the particular "violation" of paying
less than the minimum wage. It is a special provision, which
under well-known rules of construction, should prevail over the
general provision in subsection (a). In other words, although the
Act does not expressly say so, subsection (e) is an exception1
to subsection (a).
- It is a mistake to suppose that this interpretation fails to
punish the employer who disregards the Act; because the
liability imposed by subsection (e) is unquestionably a sanction,
penal in nature, which except for the the law, would not be
demandable.
Additional liability, is their prevailing idea. And yet, why should
the law impose on the employer (who pays in accordance with a
contract freely entered into), additional burdens not imposed on
the other employers willfully violating other fundamental
provisions of the Act.
- It may be argued that subsection (e) is not really a sanction
independent of subsection (a), or additional thereto, because it
merely repeats the well-known principle that "every person
criminally liable is also civily liable."
- The answer is twofold: first, attorney's fees are not usually
included in such principle-a robber is not required to pay
attorney's fees; second, the employee is not really the injured
party because he accepted the employment under a contract
"Scienti et volenti nulla fit injuria." There is no violation of any
right of the employee for which reparation is due. There is only
Labor Law 1 A2010 - 178 - Disini
a breach of the statute, for which the Government can choose, and severe, specially at the. beginning of the operation of the
and did choose the proper sanction, namely, payment of the law, upon which Senator Tañada, withdrew his amendment,
salary differential under subsection (e). The Congress did not with the understanding that in a year or so after the
choose more than that; contrary to what it did in analogous promulgation of the law, it will be amended.
situations. - The majority of this Tribunal on its own initiative would make
the Minimum Wage Law militant and effective by a blanket and
indiscriminate application of Section 15(a) to all violators of its
MONTEMAYOR [dissent]
provisions, whether or not such violation is expressly or
- Under the interpretation given by the majority, any employer
specifically declared unlawful by the law itself. Stated
who underpays his employees in violation of the Minimum Wage
otherwise, this Tribunal steps in, nay, rushes in to put teeth in a
Law (Section 3) would be subject to criminal prosecution. The
legislation which it considers toothless and would make
net result would be the unjust punishment of innocent
effective and militant what it regards would otherwise be
government officials and the discouragement and destruction of
ineffectual and inadequate. This Tribunal would, like one
infant and small industries.
unlicensed to practice medicine, prescribe a cure for a
- From the explanatory note of Senate Bill No. 202, we may
supposed legislational malady. That is not and has never been
have an idea of the attitude of the Legislature on this particular
the province, much less,
point:
the prerogative of the Judiciary. Otherwise, the courts would be
"One thing to be remembered is that the country has not yet
indulging in judicial legislation.
attained that degree of industrialization where wages can be
- If the Minimum Wage Law is found to be inadequate and
set at fully satisfactory levels from the viewpoints of human
ineffective, let the Legislature make the necessary changes and
values. Compromises must still be made until this full industrial
amendments. In fact, that was the legislative plan from the
status is attained. Another thing is that hasty and unjudicioas
beginning-observe the operation and working of the law and
action in passing minimum wage laws may be deterrent to
then make changes, if deemed necessary. But evidently, the
private capital which, on the contrary needs to be encouraged
Legislature is satisfied with the operation and mode of
to invest in local industries if the industrialization of our country
application of the law, because although approved on April 6,
must someday be a fact." -- As the majority opinion correctly
1951, and made effective 120 days thereafter, in other words,
observes, our Minimum Wage Law is patterned after that of the
after a seven-year operation, it (Legislature) has not seen fit to
United States Fair Labor Standards Act (F. L. S. A.) of 1938, as
introduce any major changes4 specially in the application of the
amended. The establishment of this minimum wage in this
penalty.
country being a sort of experiment, it being the first time that it
- Anyway, after all is said and done, the least that could be said
was being tried out, and not knowing whether or not it would be
about the applicability of Section 15(a) of the Minimum Wage
a success, it is to be presumed that the Legislature acted
law to violations of Section 3 is doubtful. Even brushing aside
cautiously and warily, and even while adopting as a pattern the
and not considering the grave doubts entertained by the
United States F.L.S.A., it did not wish or Intend to make our law
undersigned as to the applicability of said Section 15(a) to
more stern and strict in its enforcement and application,
violations of Section 3, we have in evidence the opinion of the
particularly as regards its penalties. But the majority opinion
Court of First Instance of Zamboanga and according to it, the
would make our law more rigorous and severe, more
opinion of the major sector of the Zamboanga bar, sustaining
comprehensive and more devastating in the application of its
the view that Section 15(a) is not applicable to violations of
penal provisions.
Sections 3 of the Minimum Wage Law. We have the well settled
- What the Legislature intended to penalize with fine and prison
principle in the interpretation of penal laws that in case of
sentence were only those acts which it enumerated and
doubt, the interpretation favorable to the accused should be
declared unlawful, not the mere failure to follow and comply
adopted.
with the obligations imposed upon an employer, such as, the
nonpayment of the minimum wage.
- It will be noticed that our law expressly provides that any REYES A [dissent]
employer underpaying an employee in violation of the Act shall - It is doubtful if the penal sanction prescribed in section 15(a)
be liable to said employee in the amount of the underpayment, of that Act-presumably for the acts and practices therein
with legal interest, plus a reasonable amount for attorney's declared unlawful-could be rightfully applied to the act of
fees. This amount may be recovered not only by the employee underpaying an employee, since paragraph (e) of that same
himself, but by the Secretary of Labor on his behalf. In my section already provides a specific remedy therefor.
opinion, this civil responsibility to be enforced with the aid of Considering that penal statutes are strictly construed against
the Department of Labor, was regarded as sufficient the state and in case of doubt courts must adopt the
punishment and deterrent on the employer. Being a civil action, construction favorable to the accused, the courts should not
the employee only needs preponderance of evidence to win his presume to legislate by putting into the law more teeth than the
suit. The Legislature may have been of the belief that
application of the penal sanction in the form of fine and prison
sentence would be too radical a measure, would scare and
discourage new and infant industries, besides inducing violators
to resort to underhanded but effective measures to hide and
conceal infringement of the law, to say nothing of the added
difficulty in securing conviction, which requires not only EFFECT INABILITY TO PAY
preponderance of evidence, but proof of guilt beyond
reasonable doubt.
- To show that the Legislature did not intend to be too severe PHIL. APPAREL WORKERS UNION V NLRC (PHIL
and stern in the application of this new law which was merely APPAREL INC)
being tried out, while House Bill No, 1732 was being discussed 106 SCRA 444
in the Senate, Senator Tañada believing that the bill was too MAKASIAR; July 31, 1981
lenient for those who violated its provisions by providing for a
fine of only not more than P1,000.00 or imprisonment of not
more than six months, he proposed that the fine be increased NATURE
to not more than P10,000.00-half the amount of the fine Petition for review on certiorari of the NLRC decision
provided in Section 16(a) of the U.S. Fair Labor Standards Act;
but the committee sponsoring the bill, through Senator Torres, FACTS
objected to the proposed amendment as being too excessive - Phil. Apparel, Inc. (a corporation engaged in the garments
industry) had a 1973-1976 CBA with the Phil. Apparel Workers
Labor Law 1
Union (representing its approximately 2000 employees). Prior to
said CBA’s expiry (31 July 1976), the union submitted to the
company proposals for its renewal. Negotiations were held
thereafter.
- 2 April 1977: the company and the union agreed, partially,
that the employees would be given an across-the-board
increase in regular wages of P0.80 per day retroactive to April
1st. A memorandum of undertaking was signed to this effect.
Because there were other unresolved issues, the new CBA was
not signed until 3 September 1977.
- In the meantime, PD 1123 was issued by the President on 21
April 1977 to take effect 1 May 1977. Section 4 of said decree
provided that employees then receiving P50/month as ECOLA
should be given an increase in the sum of P60/month, but
“distressed employers may be exempted while in such
condition.”
- The Secretary of Labor subsequently promulgated the IRR,
Section 1(k) of which also exempts employers “that have
granted, in addition to the allowance under PD 525, at least P60
monthly wage increase on or after 1 January 1977, provided
that those who paid less than this amount shall pay the
difference.”
- 1 May 1977: the company gave its employees the P60 ECOLA
provided in PD1123.
- 13 May 1977: the company wrote to DOLE asking if the wage
increase of P0.80/day agreed upon between the company and
the union could be credited against the ECOLA provided in
PD1123. The reply of 15 July 1977 was in the affirmative “if
management and labor had agreed to grant said amount.”
- After the new CBA was signed in 3 Sept 1977, the union raised
the question of creditability of the April 1 increase of P0.80/day
to the May 1 ECOLA. The matter was taken up in grievance
procedure but no agreement was reached. The union thereafter
filed a complaint with the DOLE against the company for ULP.
- 30 May 1978: Labor Arbiter dismissed the union’s complaint
saying that the issue should be resolved through further
proceedings under the grievance machinery established in the
CBA. NLRC set aside LA’s decision, and dismissed the complaint
upon its merits. Hence, this petition for review.
ISSUE
WON the company’s application of the negotiated wage
increase as partial compliance with PD 1123 is proper
HELD
NO
- The company cannot fall within the exceptions provided for in
par. (k) of the Rules implementing PD 1123 on the grant of
ECOLA because when said decree took effect on May 1, 1977
there was neither a perfected CBA (signed 3 Sept 1977) nor an
actual payment of the negotiated wage increase made
retroactive to April 1, 1977.
- The letter of Undersecretary Inciong dated 13 May 1977 that
there was an agreement between the parties on the wage
increase was based on a wrong premise because there were
still other unresolved bargaining items and it was only on 3
September 1977 that the parties reached an agreement
thereon.
- There being no actual agreement yet and actual payment of
the agreed P0.80 wage increase, there could have been no
“grant” of wage increases by the employer w/in the
contemplation of par. k, Sec. 1 of the implementing rules of PD
1123 to exempt the employer.
- In this case, the company is guilty of bad faith when it signed
the CBA on 3 September 1977 without letting the union know
that it was going to apply part of the allowances being paid
under PD 1123 to the wage increases provided for in the CBA.
- The stability of the economy does not depend on the employer
alone, but on government economic policies concerning
productivity in all areas. It is the living wage of the workers
which is the basis of a stable economy. If a company cannot
pay a living wage, it has no business operating at the
expense of the lives of its workers from the very start.
A2010 - 179 - Disini
The preservation of the lives of citizens is a basic duty of the
State, more vital than the preservation of corporate profits.
- Par. (k), Sec. 1 of the Rules Implementing Pd 1123 is null and
void as the Secretary of Labor exceeded his authority in
enacting it.
Disposition Certiorari granted. NLRC decision set aside.
Company directed to pay, in addition to the increased
allowance provided for in PD 1123, the negotiated wage
increase of P0.80 daily, as well as other wage increases
embodied in the CBA. Costs against company.
SEPARATE OPINION
TEEHANKEE [concur]
- The memorandum of agreement signed by the parties clearly
shows that the negotiated staggered wage increases were
intended to be exclusive of any statutory increase in the
minimum wage and the ECOLA is in effect another increase in
the minimum wage.
- There is basis for the majority holding that the questioned
portion of the rules implementing PD1123 is void, but I do not
deem it necessary to concur in such a ruling given that the
issue of validity is not the lis mota of the case.
MELENCIO-HERRERA [dissent]
- It is inequitable that an employer, who has granted increases
in pay on a given day, is further ordered to give additional
increases a few days thereafter.
- Section 1(k) of the Implementing rules of PD1123 is part of the
law and binding on the courts. Great weight should be given to
the interpretation of a given statute by the government agency
called upon to implement it.
9.20 AGENCIES FOR WAGE
FIXING MACHINERY
A. NATIONAL WAGES AND PRODUCTIVITY
COMMISSION
B. REGIONAL TRIPARTITE WAGES AND
PRODUCTIVITY BOARD
FUNCTIONS
NASIPIT LUMBER CO V NLRC (NWPC)
289 SCRA 339 (03)
SANDOVAL-GUTIERREZ; September 8, 2003
NATURE
A petition for certiorari with prayer for issuance of a temporary
restraining order and/or writ of preliminary injunction.
FACTS
- November 19, 1993: the Regional Tripartite Wages and
Productivity Board (RTWPB) of Region X, Northern Mindanao,
Cagayan de Oro City, issued a Wage Order mandating a P7.00
increase in the minimum daily wage of all workers and
employees in the private sector in Region X receiving a daily
wage of not more than P130.00 per day and, an additional
P10.00 allowance per day.
- Nasipit Lumber Company et al. filed their separate application
for exemption from compliance, claiming they are distressed
establishments whose paid-up capital has been impaired by at
least 25%.
- After finding that the petitioners indeed sustained financial
losses which impaired their respective paid-up capital, the
RTWPB granted petitioners a full exemption from compliance
Labor Law 1
with the said Wage Order for a period of one (1) year or from
December 8, 1993 to December 7, 1994.
- Petitioners, citing the continuous business decline in the wood
processing industry, filed a consolidated petition for extension
of their full exemption from compliance for another year.
RTWPB denied the application, relying on Section 7 of the NWPC
Revised Guidelines No. 1: “Establishments shall be granted full
exemption of one (1) year from effectivity of the Order for all
categories of exemption.”
- National Wages and Productivity Commission denied the
appeal interposed by the petitioners, stating that the rationale
behind the policy is to afford protection to workers who may be
unfairly affected by the deleterious effect of a prolonged
exemption which is not in accord with the very purpose of the
issuance of a Wage Order.
ISSUE
WON NWPC exceeded its jurisdiction
HELD
NO, NWPC did not exceed its jurisdiction.
Reasoning
- ART. 121. Powers and Functions of the Commission. –
The Commission shall have the following powers and functions:
“x x x
(c) To prescribe rules and guidelines for the determination of
appropriate minimum wage and productivity measures at
the regional, provincial or industry levels;
(d) To review regional wage levels set by the Regional
Tripartite Wages and Productivity Boards to determine if
these are in accordance with prescribed guidelines and
national development plans;
- JUSTICE PANGANIBAN: “The foregoing clearly grants the
NWPC, x x x, the power to ‘prescribe the rules and guidelines’
for the determination of minimum wage and productivity
measures. x x x, the NWPC has the power not only to prescribe
guidelines to govern wage orders, but also to issue exemptions
therefrom, x x x. In short, the NWPC lays down the guidelines
which the RTWPB implements.”
- In affirming the RTWPB’s Resolution denying petitioners’
application for extension for another year of their full exemption
from compliance with Wage Order No. RX-03, the NWPC did not
act with grave abuse of discretion. On the contrary, it merely
applied its own Guideline No. 01, Series of 1992 limiting the
duration of exemption to only one (1) year.
Disposition Petition is dismissed. Decision of the NWPC is
affirmed.
9.21 AREA MINIMUM WAGES
AND CRITERIA
9.22 WAGE ORDER
METHODS OF FIXING
EMPLOYERS CONFEDERATION OF THE PHIL V
NATIONAL WAGES AND PRODUCTIVITY
COMMISSION
[PAGE]
REQUIREMENTS VAILIDITY
CAGAYAN SUGAR MILLING CO V SECRETARY
284 SCRA 150
PUNO; January 15, 1998
A2010 - 180 - Disini
NATURE
Petition for certiorari impugning the Decision of the Secretary of
Labor upholding the Order of the Regional Director finding
petitioner guilty of violating Regional Wage Order No. RO2-02
FACTS
- Regional Wage Order No. RO2-02 was issued by the Regional
Tripartite Wage and Productivity Board of the DOLE. It provided
that the statutory minimum wage rates applicable to workers
and employees in the private sector in Region II shall be
increased by P14.00 per day in Cagayan. Labor inspectors from
DOLE found that petitioner violated the wage order as it did not
implement an across the board increase in the salary of its
employees. At the hearing at the DOLE Regional Office for the
alleged violation, petitioner maintained that it complied with the
wage order as it paid the mandated increase in the minimum
wage. Regional Director Martinez ruled that petitioner violated
RO2-02. He ordered petitioner to pay the deficiency in the
salary of its employees in the total amount of P555,133.41.
- Petitioner appealed to public respondent Labor Secretary
Quisumbing. On the same date, the Regional Wage Board
issued Wage Order No. RO2-02-A amending the earlier wage
order in providing that the workers and employees in the
private sector shall receive an across the board wage increase
of P14.00 in Cagayan, retroacting to the date of effectivity of
RO2-02. Private respondent CARSUMCO EMPLOYEES UNION
moved for execution of the order. Regional Director Martinez
granted the motion and issued the writ of execution. Petitioner
moved for reconsideration. The DOLE regional sheriff served on
petitioner a notice of garnishment of its account with the Far
East Bank and Trust Company. The sheriff also seized
petitioner's dump truck and scheduled its public sale. Hence,
this petition, with a prayer for the issuance of a TRO.
ISSUE
WON RO2-02-A violates petitioner’s right to due process
HELD
YES
Ratio RO2-02-A is invalid for lack of public consultations and
hearings and non-publication in a newspaper of general
circulation, in violation of the Labor Code.
Reasoning
- Article 123 of the Labor Code provides that in the performance
of their wage-determining functions, the Regional Board shall
conduct public hearings and consultations, giving notices to
interested parties. Moreover, it mandates that the Wage Order
shall take effect only after publication in a newspaper of general
circulation in the region. In passing RO2-02-A without going
through the process of public consultation and hearings, the
Regional Board deprived petitioner and other employers of due
process as they were not given the opportunity to ventilate
their positions regarding the proposed wage increase. The
contention that, despite the wording of RO2-02 providing for a
statutory increase in minimum wage, the real intention of the
Regional Board was to provide for an across the board increase
is absurd. There was no ambiguity in the provision of RO2-02 as
it provided in clear and categorical terms for an increase in
statutory minimum wage of workers in the region. The
subsequent passage of RO2-02-A changed the essence of the
original Order.
Disposition petition is GRANTED.
PIECE WORKER
LAMBO V NLRC
317 SCRA 420
MENDOZA; October 26, 1999
NATURE
Petition for certiorari
Labor Law 1
FACTS
- Petitioners Avelino Lambo and Vicente Belocura were
employed as tailors by private respondents J.C. Tailor Shop
and/or Johnny Co on September 10, 1985 and March 3, 1985,
respectively. Petitioners were paid on a piece-work basis,
according to the style of suits they made. Regardless of the
number of pieces they finished in a day, they were each given a
daily pay of at least P64.00
- On January 17, 1989, petitioners filed a complaint against
private respondents for illegal dismissal and sought recovery of
overtime pay, holiday pay, premium pay on holiday and rest
day, service incentive leave pay, separation pay, 13th month
pay, and attorney’s fees. The Labor Arbiter ruled in their favor.
- The NLRC reversed the decision of the labor arbiter. It found
that the petitioners were not dismissed but merely threatened
with a closure of a business if they insisted on their demand for
a “straight payment of their minimum wage,” after petitioners,
on January 17, 1989, walked out of a meeting with private
respondents and other employees. In that meeting, the
employees voted to maintain the company policy of paying
them according to the volume of their work. Only the
petitioners insisted that they be paid the minimum wage and
other benefits. The NLRC held petitioners guilty of
abandonment of work.
- Petitioners deny that they abandoned their work. They allege
that they were dismissed as they were about to file a petitione
with DOLE for payment of benefits.
ISSUES
1. WON the petitioners are regular employees
2. WON the petitioners abandoned their work
HELD
1. There are two categories of employees paid by results: (1)
those whose time and performance are supervised by the
employer. (Here, there is an element of control and supervision
over the manner as to how the work is to be performed. A
piece-rate worker belongs to this category especially if he
performs his work in the company premises.); and (2) those
whose time and performance are unsupervised. (Here, the
employer’s control is over the result of the work. Workers on
pakyao and takay basis belong to this group.). Petitioners
belong to the 1st group.
- The relationship at bar passes the four-fold test. The mere fact
that they were employed on a per piece basis does not negate
their status as regular employees. Payment by the piece is just
a method of compensation and does not define the essence of
the relations. Nor does the fact that petitioners are not covered
by the SSS affect the employer-employee relationship
2. To justify a finding of abandonment of work, there must be
proof of a deliberate and unjustified refusal on the part of an
employee to resume his employment. Private respondents
failed to discharge this burden. Other than the self-serving
declarations in the affidavits of their two employees, private
respondents did not adduce proof of overt acts of petitioners
showing their intention to abandon their work. On the contrary,
the evidence shows that petitioners lost no time in filing the
case for illegal dismissal against private respondent. This fact
negates any intention on their part to sever their employment
relationship
Disposition Petition granted
PULP AND PAPER INC V NLRC (ANTONIO)
279 SCRA 408
PANGANIBAN; September 24, 1997
NATURE
Instant petition for certiorari
FACTS
- A case of illegal dismissal and underpayment of wages was
filed by MS. EPIFANIA ANTONIO [private respondent herein]
A2010 - 181 - Disini
against PULP AND PAPER DISTRIBUTORS INC., [petitioner
herein] She alleges that she was a regular employee of the
corporation having served thereat as Wrapper sometime in
September 1975. On November 29, 1991, for unknown reasons,
she was advised verbally of her termination and was given a
prepared form of Quitclaim and Release which she refused to
sign. Instead she brought the present complaint for illegal
dismissal. In charging the company of underpayment of wages,
complainant in the same position paper alleges that, rarely
during her employment with the respondent she received her
salary, a salary which was in accordance with the minimum
wage law. She was not paid overtime pay, holiday pay and five-
day service incentive leave pay, hence she is claiming for
payments thereof by instituting the present case.
- Company denied having terminated the services of the
complainant and alleges inter alia that starting 1989 the orders
from customers became fewer and dwindled to the point that it
is no longer practical to maintain the present number of
packer/wrappers. Maintaining the same number of
packers/wrappers would mean less pay because the work
allocation is no longer the same as it was. Such being the case,
the respondent has to reduce temporarily the number of
packers/wrappers. Complainant was among those who were
temporarily laid-off from work. Complainant last worked with
the company on June 29, 1991.
- As regards complainant's allegation that on November 29,
1991, she was forced to sign a quitclaim and release by the
respondent, the latter clarified that considering that five months
from the time the complainant last worked with the company,
the management decided to release the complainant and give
her a chance to look for another job in the meantime that no job
is available for her with the company. In other words,
complainant was given the option and considering that she did
not sign the documents referred to as the Quitclaim and
Release, the respondent did not insist, and did not terminate
the services of the complainant. It was just surprise [sic] to
receive the present complaint. In fact, respondent added that
the reason why the complainant was called on November 29,
1991 was not to work but to receive her 13th month pay of
P636.70 as shown by the voucher she signed.
- As regards the claim of the complainant for underpayment,
respondent did not actually denied the same but give the
reservation that should the same be determined by this Office it
is willing to settle the same considering the fact that
complainant herein being paid by results, it is not in a proper
position to determine whether the complainant was underpaid
or not.
ISSUES
1. WON the computation should apply the minimum wage and
not the wage rate of workers
2. WON the private respondent's separation pay should not
have been computed at one month's pay for every year of
service because private respondent should be considered
retrenched, the separation pay should be "one month's pay or
at least one/half (1/2) month pay for every year of service,
whichever is higher, and not one (1) month's pay for every year
of service as public respondent had ruled."
3. WON petitioner's challenge to the computation of salary
differential must be dismissed as "the work of the private
respondent is seasonal, being dependent upon the availability
of job-orders" and not "twenty-six (26) days a month because
as a piece worker whose work was seasonal."
HELD
1. Minimum wage is applicable.
- In the absence of wage rates based on time and motion
studies determined by the labor secretary or submitted by the
employer to the labor secretary for his approval, wage rates
of piece-rate workers must be based on the applicable
daily minimum wage determined by the Regional
Tripartite Wages and Productivity Commission. To ensure
the payment of fair and reasonable wage rates, Article 101 of
the Labor Code provides that "the Secretary of Labor shall
Labor Law 1
regulate the payment of wages by results, including
pakyao, piecework and other nontime work." The same
statutory provision also states that the wage rates should be
based, preferably, on time and motion studies, or those arrived
at in consultation with representatives of workers' and
employers' organizations. In the absence of such prescribed
wage rates for piece-rate workers, the ordinary
minimum wage rates prescribed by the Regional
Tripartite Wages and Productivity Boards should apply.
This is in compliance with Section 8 of the Rules Implementing
Wage Order Nos. NCR-02 and NCR-02-A the prevailing wage
order at the time of dismissal of private respondent, viz:
Sec. 8. Workers Paid by Results. a) All workers paid by
results including those who are paid on piece work, takay,
pakyaw, or task basis, shall receive not less than the
applicable minimum wage rates prescribed under the Order
for the normal working hours which shall not exceed eight (8)
hours work a day, or a proportion thereof for work of less than
the normal working hours.
- The adjusted minimum wage rates for workers paid by results
shall be computed in accordance with the following steps:
1) Amount of increase in AMW x 100 = % increase Previous
AMW
2) Existing rate/piece x % increase = increase in rate/piece;
3) Existing rate/piece + increase in rate/piece = adjusted
rate/piece.
b) The wage rates of workers who are paid by results shall
continue to be established in accordance with Art. 101 of the
Labor Code, as amended and its implementing regulations.
- On November 29, 1991, private respondent was orally
informed of the termination of her employment. Wage Order
No. NCR-02, in effect at the time, set the minimum daily wage
for non-agricultural workers like private respondent at P118.00.
This was the rate used by the labor arbiter in computing the
separation pay of private respondent. We cannot find any abuse
of discretion, let alone grave abuse, in the order of the labor
arbiter which was later affirmed by the NLRC.
- Moreover, since petitioner employed piece-rate workers, it
should have inquired from the secretary of labor about their
prescribed specific wage rates. In any event, there being no
such prescribed rates, petitioner, after consultation with its
workers, should have submitted for the labor secretary's
approval time and motion studies as basis for the wage rates of
its employees. This responsibility of the employer is clear under
Section 8, Rule VII, Book III of the Omnibus Rules Implementing
the Labor Code:
Sec. 8. Payment by result.
(a) On petition of any interested party, or upon its initiative,
the Department of Labor shall use all available devices,
including the use of time and motion studies and
consultations with representatives of employers' and workers'
organizations, to determine whether the employees in any
industry or enterprise are being compensated in accordance
with the minimum wage requirements of this Rule.
(b) The basis for the establishment of rates for piece, output
or contract work shall be the performance of an ordinary
worker of minimum skill or ability.
(c) An ordinary worker of minimum skill or ability is the
average worker of the lowest producing group representing
50% of the total number of employees engaged in similar
employment in a particular establishment, excluding learners,
apprentices and handicapped workers employed therein.
(d) Where the output rates established by the employer do
not conform with the standards prescribed herein, or with the
rates prescribed by the Department of Labor in an
appropriate order, the employees shall be entitled to the
difference between the amount to which they are entitled to
receive under such prescribed standards or rates and that
actually paid them by employer.
- In the present case, petitioner as the employer
unquestionably failed to discharge the foregoing
responsibility. Petitioner did not submit to the secretary
of labor a proposed wage rate based on time and
motion studies and reached after consultation with the
A2010 - 182 - Disini
representatives from both workers' and employers'
organization which would have applied to its piece-rate
workers. Without those submissions, the labor arbiter
had the duty to use the daily minimum wage rate for
non-agricultural workers prevailing at the time of
private respondent's dismissal, as prescribed by the
Regional Tripartite Wages and Productivity Boards. Put
differently, petitioner did not take the initiative of proposing an
appropriate wage rate for its piece-rate workers. In the absence
of such wage rate, the labor arbiter cannot be faulted for
applying the prescribed minimum wage rate in the computation
of private respondent's separation pay. In fact, it acted and
ruled correctly and legally in the premises.
- It is clear, therefore, that the applicable minimum wage for an
eight-hour working day is the basis for the computation of the
separation pay of piece-rate workers like private respondent.
The computed daily wage should not be reduced on the basis of
unsubstantiated claims that her daily working hours were less
than eight. Aside from its bare assertion, petitioner presented
no clear proof that private respondent's regular working day
was less than eight hours. Thus, the labor arbiter correctly used
the full amount of P118.00 per day in computing private
respondent's separation pay. We agree with the following
computation:
- Considering therefore that complainant had been laid-off for
more than six (6) months now, we strongly feel that it is already
reasonable for the respondent to pay the complainant her
separation pay of one month for every year of service, a
fraction of six (6) months to be considered as one whole year.
Separation pay should be computed based on her minimum
salary as will be determined hereunder.
Separation pay 1 month = 16 yearsP118.00 x 26 x 16 years =
P49,088.00
The amount "P118.00" represents the applicable daily minimum
wage per Wage Order Nos. NCR-02 and NCR-02-A; "26", the
number of working days in a month after excluding the four
Sundays which are deemed rest days; "16", the total number of
years spent by private respondent in the employ of petitioner.
2. NO
- Petitioner misapprehended the ground relied upon by public
respondent for awarding separation pay. In this case, public
respondent held that private respondent was constructively
dismissed, pursuant to Article 286 of the Labor Code which
reads:
- Art. 286. When employment not deemed terminated. The
bonafide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months, or the
fulfillment by the employee of a military or civic duty shall not
terminate employment. In all such cases, the employer shall
reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not
later that one (1) month from his resumption of operations of
his employer or from his relief from the military or civic duty.
- Petitioner failed to discern that public respondent, in finding
that the services of private respondent were terminated, merely
adopted by analogy the rule on constructive dismissal. Since
private respondent was not reemployed within six (6) months
from the "suspension" of her employment, she is deemed to
have been constructively dismissed. Otherwise, private
respondent will remain in a perpetual "floating status." Because
petitioner had not shown by competent evidence any just cause
for the dismissal of private respondent, she is entitled to
reinstatement or, if this is not feasible, to separation pay
equivalent to one (1) month salary for every year of service.
Private respondent, however, neither asked for reinstatement
nor appealed from the labor arbiter's finding that she was not
illegally dismissed; she merely prayed for the grant of her
monetary claims. Thus, it is sustained that the award of
separation pay made by public respondent, for employees
constructively dismissed are entitled to separation pay.
Because she did not ask for more, we cannot give her more. We
repeat: she appealed neither the decision of the labor arbiter
Labor Law 1
nor that of the NLRC. Hence, she is not entitled to any
affirmative relief.
- Furthermore, we cannot sustain petitioner's claim that private
respondent was retrenched. For retrenchment to be considered
a ground for termination, the employer must serve a written
notice on the workers and the Department of Labor and
Employment at least one month before the intended date
thereof. Petitioner did not comply with this requirement.
3. YES
- it should be dismissed. As earlier observed, private respondent
is entitled to the minimum wage prevailing at the time of the
termination of her employment. The same rate of minimum
wage, P118.00, should be used in computing her salary
differential resulting from petitioner's underpayment of her
wages. Thus, the labor arbiter correctly deducted private
respondent's actually received wage of P60 a day from the
prescribed daily minimum wage of P118.00, and multiplied the
difference by 26 working days, and subsequently by 16 years,
equivalent to her length of service with petitioner. Thus, the
amount of P31,149.56 as salary differential.
- Contrary to the assertion of petitioner, neither the assailed
Decision nor the pleadings of private respondent show that
private respondent's work was seasonal. More important,
petitioner utterly failed to substantiate its allegation that
private respondent's work was seasonal. We observe that the
labor arbiter based the computation of the salary differential on
a 26-day month on the presumption that private respondent's
work was continuous. In view of the failure of petitioner to
support its claim, we must sustain the correctness of this
computation.
Disposition petition is DISMISSED and the assailed Decision is
AFFIRMED.
WAGE DISTORTION
NATIONAL FEDERATION OF LABOR V NLRC
(FRANKLIN BAKER COMPANY OF THE PHILIPPINES)
234 SCRA 311
FELICIANO; July 21, 1994
NATURE
Petition for Review on Certiorari
FACTS
- Wage Orders Nos. 3, 4, 5 and 6 were promulgated by the then
Pres. Marcos. Before the effectivity of Wage Order No. 3, the
wage rates of regular employees and of casual (or non-regular
employees of private respondent Franklin Baker Company of
the Philippines (Davao Plant) ("Company") were such that there
was a positive differential of P4.56 between the 2. The effect of
the implementation of the successive Wage Orders upon the
daily wage rates of these two (2) groups of employees was
summarized by petitioner in the following table:
- Upon the effectivity of Wage Order No. 5, grievance meetings
were held by petitioner National Federation of Labor ("NFL") and
private respondent Company sometime in June 1984,
addressing the impact which implementation of the various
Wage Orders had on the wage structure of the Company. The
wage rates of bith casual and regular employees were the same
at P34. Then all the casual or non-regular employees of private
respondent Company (at least in its Davao Plant) were
"regularized," or converted into regular employees, pursuant to
the request of petitioner NFL.
- On 1 July 1984, the effectivity date of the 1984 CBA between
NFL and the Company, all regular employees of the Company
received an increase of P1.84 in their daily wage; the regular
daily wage of the regular employees thus became P35.84 as
against P34.00 per day for non-regular employees.
- Through Wage Order No. 6, casual employees received an
increase of their daily wage from P34 to 36. At the same time,
Company unilaterally granted an across-the-board increase of
P2 in the daily rate of all regular employees, increasing their
A2010 - 183 - Disini
daily wage from P35.84 to P37.84. Further, on 1 July 1985, all
regular employees who were members of the collective
bargaining unit got a raise of P1.76 in their basic daily wage,
which pushed that daily wage from P37.84 to P39.60, as against
the non-regular's basic wage of P36/day. And, by Nov ‘87, the
lowest paid regular employee had a basic daily rate of P64.64,
P10.64 more than the statutory minimum wage paid to a non-
regular employee.
- Petitioner’s principal contention: A wage distortion in the wage
structure of private respondent Company continued to exist
although a gap of P1.84 between the daily wage rate of regular
employees and that of casual employees had been re-
established upon the effectivity of the CBA increase on 1 July
1984.
ISSUE
WON NLRC committed a grave abuse of discretion amounting to
lack or excess of jurisdiction, when it concluded that the wage
distortion had ceased to exist, after 1 July 1984
HELD
NO
- The re-establishment of a significant gap or differential
between regular employees and casual employees by operation
of the CBA was more than substantial compliance with the
requirements of the several Wage Orders (and of Article 124 of
the Labor Code2)
In this case the Court summarized the principles regarding
wage distortion:
[a] The concept of wage distortion assumes an existing
grouping or classification of employees which establishes
distinctions among such employees on some relevant or
legitimate basis. This classification is reflected in a differing
wage rate for each of the existing classes of employees.
[b] Wage distortions have often been the result of government-
decreed increases in minimum wages. There are however, other
causes of wage distortions, like merger of 2 companies (with
differing classifications of employees and different wage rates)
where the surviving company absorbs all the employees of the
dissolved corporation.
[c] Should a wage distortion exist, there is no legal requirement
that, in the rectification of that distortion by readjustment of the
age rates of the differing classes of employees, the gap which
had previously or historically existed or restored in precisely the
same amount. In other words correction of a wage distortion
may be done by reestablishing a substantial or significant gap
(as distinguished from the historical gap) between the wage
rates of the differing classes of employees.
[d] The reestablishment of a significant difference in wage
rates may be the result of resort to grievance procedures or
collecting bargaining negotiations.
The Court also emphasized that: Whether or not a new
additional scheme of classification of employees for
compensation purposes should be established by the Company
(and the legitimacy or viability of the bases of distinction there
embodied) is properly a matter for management judgment and
discretion, and ultimately, perhaps, a subject matter for
bargaining negotiations between employer and employees
Disposition Petition DISMISSED for lack of merit,
PRUBANKERS ASSOCIATION V PRUDENTIAL BANK
& TRUST COMPANY
302 SCRA 74
PANGANIBAN; January 25, 1999
2
Article 124. Standards/Criteria for Minimum Wage Fixing. - . . .
xxx xxx xxx
As used herein, a wage distortion shall mean a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinctions embodied in
such wage structure based on skills, length of service, or other logical bases of
differentiation.
Labor Law 1
FACTS
- On November 18, 1993, the Regional Tripartite Wages and
Productivity Board of Region V issued Wage Order No. RB 05-03
which provided for a Cost of Living Allowance (COLA) to workers
in the private sector who had rendered service for at least three
months before its effectivity, and for the same period
thereafter. The amount of COLA depended on the region where
it was implemented
- On November 23, 1993, the Regional Tripartite Wages and
Productivity Board of Region, VII issued Wage Order No. RB VII-
03, which directed the integration of the COLA mandated
pursuant to Wage Order No. RO VII-02-A into the basic pay of all
workers. It also established an increase in the minimum wage
rates for all workers and employees in the private sector. Again
amount differed depending on the region
- The petitioner then granted a COLA of P17.50 to its employees
at its Naga Branch, the only branch covered by Wage Order No.
RB 5-03, and integrated the P150.00 per month COLA into the
basic pay of its rank-and-file employees at its Cebu, Mabolo and
P. del Rosario branches, the branches covered by Wage Order
No. RB VII-03
- Prubankers association told Prudential Bank to extend the
application of the wage orders to its employees outside Regions
V and VII, claiming that the regional implementation of the said
orders created a wage distortion in the wage rates of the bank’s
employees nationwide
- they decided to submit the dispute for voluntary arbitration.
Issue being won the enforcement of the wage orders created a
wage distortion. (there was no mention of the decision so I think
the ruled that it created a wage distortion)
- CA ruled that there was no distortion saying that the RA
justified it. It noted, I that the underlying considerations in
issuing the wage orders are diverse, based on the distinctive
situations and needs existing in each region
ISSUE
WON a wage distortion resulted from respondent's
implementation of the aforecited Wage Orders
HELD
NO
- The statutory definition of' wage distortion I'S found Article
124 of the Labor Code, as amended by Republic Act No. 6727:
“As used herein, a wage distortion shall mean a situation
where an increase in prescribed wage results in the
elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among
employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases of
differentiation”
- Wage distortion involves four elements:
1. An existing hierarchy of positions with corresponding salary
rates 2. A significant change in the salary rate of a lower pay
class without a concomitant increase in the salary rate of a
higher one 3. The elimination of the distinction between the
two levels
4. The existence of the distortion in the same region of the
country
- no wage distortion resulted when respondent implemented the
subject Wage Orders ill the covered branches-. In the said
branches, there was an increase in the salary rates of all pay
classes. Furthermore, the hierarchy of positions based on skills,
length of service and other logical bases of differentiation was
preserved
- petitioner maintains that, as a result of the two Wage Orders,
the employees in the affected regions have higher
compensation than their counterparts of the same level in other
regions
- The Court is not persuaded. A wage parity between employees
in different rungs is not at issue here, but a zeage disparity
between employees in the same rung but located in different
regions of the country
A2010 - 184 - Disini
- a wage distortion arises when a wage order engenders wage
parity, between employees in different rungs of the
organizational ladder of the same establishment. It bears
emphasis that wage distortion involves a parity in the salary
rates of different pay classes which, as a result, eliminates the
distinction between the different ranks in the same region
- Petitioner's claim of wage distortion must also be denied for
one other reason. The difference in wages between employees
in the same pay scale in different regions is not the mischief
sought to be banished by the law. In fact it recognizes the
disparity.
- It must be understood that varying in each region of the
country are controlling factors such as the cost of living; supply
and demand of basic goods, services and necessities; and the
purchasing power of the peso.
ASSOCIATED LABOR UNIONS-TUCP V NLRC
(MAGBANUA. DEL MONTE PHILIPPINES INC)
235 SCRA 395
MENDOZA; August 16, 1994
NATURE
Special civil action of certiorari to set aside the decision and
resolution dated June 22, 1992 and September 14, 1992
respectively of the National Labor Relations Commission
FACTS
- On July 1, 1989, Republic Act No. 6727, otherwise known as
the Wage Rationalization Act, took effect, granting a P25.00/day
increase in the statutory minimum wage of all workers and
employees in the private sector, subject to certain conditions.
- In implementation of the law, private respondent Del Monte
Philippines, Inc. gave a P25.00/day increase to the P54.00/day
wages of its temporary employees or "broilers." Because the
regular employees, members of petitioner union, who were then
receiving P100.80 a day were not granted a similar increase,
they complained to the management of private respondent.
- On February 14, 1990, the parties executed a Memorandum
Agreement wherein private respondent, "in positive response to
the union's representations and notwithstanding that it has no
legal or contractual obligation," granted the members of
petitioner union a P10.00/day wage increase effective January
1, 1990, subject to the latter's right to claim P15.00/day as
balance, through compulsory arbitration.
- On June 5, 1990, petitioners filed a complaint against private
respondent in the National Labor Relations Commission (NLRC).
They alleged that a wage distortion had been created. On
appeal the NLRC affirmed the Labor Arbiter's findings and
denied petitioner's motion for reconsideration.
ISSUE
WON the wage increases mandated by the parties’ Collective
Bargaining Agreement should be considered (should take
effect)
HELD
YES
- Art. 124 of the Labor Code, as amended by Republic Act No.
6727,
expressly provides that where the application of any
prescribed wage increase by virtue of a law or wage order
issued by any Regional Board results in distortions of the
wage structure within an establishment, the employer and
the union shall negotiate to correct the distortions. The law
recognizes, therefore, the validity of negotiated wage
increases to correct wage distortions. The legislative
intent is to encourage the parties to seek solution to
the problem of wage distortions through voluntary
negotiation or arbitration, rather than strikes,
lockouts, or other concerted activities of the
employees or management. Recognition and validation of
wage increases given by employers either unilaterally or as a
Labor Law 1 A2010 - 185 - Disini
result of collective bargaining negotiations for the purpose of create their own independent classification and use it as a basis
correcting wage distortions are in keeping with the public to demand an across-the-board increase in salary.
policy of encouraging employers to grant wage and allowance - Apart from the findings of fact of the NLRC and the Court of
increases to their employees which are higher than the Appeals that some of the elements of wage distortion are
minimum rates of increases prescribed by statute or absent, petitioner cannot legally obligate Bankard to correct the
administrative regulation. alleged "wage distortion" as the increase in the wages and
- Apex Mining, Inc. v. NLRC salaries of the newly-hired was not due to a prescribed law
To compel employers simply to add on legislated increases in or wage order. The wordings of Article 124 are clear. If it was
salary or allowances without regard to what is already paid, the intention of the legislators to cover all kinds of wage
would be to penalize employers who grant their workers more adjustments, then the language of the law should have been
than the statutorily prescribed minimum rates of increases. broad, not restrictive as it is currently phrased.
Clearly, this would be counterproductive so far as securing - Moreover, Bankard’s right to increase its hiring rate, to
the interest of labor is concerned. establish minimum salaries for specific jobs, and to adjust the
- Cardona v. NLRC rates of employees affected thereby is embodied under Section
There was no wage distortion where the employer made 2, Article V (Salary and Cost of Living Allowance) of the parties’
salary adjustments in terms of restructuring of benefits and Collective Bargaining Agreement (CBA).
allowances and re was an increase pursuant to the CBA. Disposition the present petition is hereby DENIED.
- Finally, whether or not a wage distortion exists by reason of
the grant of a wage increase to certain employees is essentially
a question of fact. In this case, the findings of the Labor Arbiter,
affirmed by the NLRC, that no wage distortion exists being
9.23 EFFECT OF BENEFITS
based on substantial evidence, are entitled to respect and
finality.
PRUBANKERS ASSN V PRUDENTIAL BANK AND CO
Disposition Petition dismissed
[PAGE 181]
BANKARD EMPLOYEES UNION V NLRC (BANKARD
INC) SECTION 10: WOMEN WORKERS
423 SCRA 148
CARPIO-MORALES; February 17, 2004
10.01 WOMEN AND THE
FACTS
- Bankard, Inc. (Bankard) classifies its employees by levels. On
CONSTITUTION
May 28, 1993, its Board of Directors approved a "New Salary
Scale" for the purpose of making its hiring rate competitive in
the industry’s labor market. The "New Salary Scale" increased WOMEN WORKERS
the hiring rates of new employees. Accordingly, the salaries of
employees who fell below the new minimum rates were also PHIL TELEGRAPH AND TELEPHONE CO V NLRC
adjusted to reach such rates under their levels.
- Bankard’s move drew the Bankard Employees Union-WATU
[PAGE 26]
(petitioner), the duly certified exclusive bargaining agent of the
regular rank and file employees of Bankard, to press for the
increase in the salary of its old, regular employees. Bankard
10.02 COVERAGE
took the position, however, that there was no obligation on the
part of the management to grant to all its employees the same
increase in an across-the-board manner. 10.03 PROHIBITED ACTS
- Petitioners filed Notices of Strike on the ground of
discrimination and other acts of Unfair Labor Practice. The
strike was averted, however, when the dispute was certified by 1) NIGHT WORK AND EXCEPTION
the Secretary of Labor and Employment for compulsory 2) DISCRIMINATION
arbitration.
3) MARRIAGE
- NLRC, finding no wage distortion, dismissed the case for lack
of merit. MFR was denied. Hence, this petition for certiorari. 4) GENERAL

ISSUE 10.04 FACILITIES

WON the unilateral adoption by an employer of an upgraded
salary scale that increased the hiring rates of new employees
without increasing the salary rates of old employees resulted in
wage distortion within the contemplation of Article 124 of the 10.05 SPECIAL CLASSIFICATION
Labor Code SPECIAL WOMEN WORKERS
HELD
NO
Ratio Petitioner cannot make a contrary classification of private 10.06 MATERNITY LEAVE
respondent’s employees without encroaching upon recognized
management prerogative of formulating a wage structure, in
this case, one based on level.
Reasoning
10.07 SEXUAL HARRASSMENT
- While seniority may be a factor in determining the wages of
employees, it cannot be made the sole basis in cases where the WORK RELATED ENVIRONMENT
nature of their work differs. Moreover, for purposes of
determining the existence of wage distortion, employees cannot
EDUCATION OR TRAINING0RELATED
ENVIRONMENT
Labor Law 1 A2010 - 186 - Disini
DUTY EMPLOYER complied with
LIABILITY EMPLOYER HELD
REMEDIES 1. NO
Reasoning
- Republic Act No. 7877 was not yet in effect at the time of the
LIBRES V NLRC (NATIONAL STEEL CORPORATION, occurrence of the act complained of. It was still being
ET AL) deliberated upon in Congress when petitioner's case was
307 SCRA 675 decided by the Labor Arbiter. As a rule, laws shall have no
BELLOSILLO; May 28, 1999 retroactive effect unless otherwise provided, or except in a
criminal case when their application will favor the accused.
Hence, the Labor Arbiter have to rely on the MEC report and the
NATURE
common connotation of sexual harassment as it is generally as
Petition for certiorari seeking to annul the decision of public
understood by the public. Faced with the same predicament,
respondent NLRC sustaining the Labor Arbiter’s finding that
the NLRC had to agree with the Labor Arbiter. In so doing, the
petitioner was validly suspended by private respondents, as
NLRC did not commit any abuse of discretion in affirming the
well as the NLRC resolution denying petitioner’s motion to
decision of the Labor Arbiter.
reconsider its decision
2. NO
Reasoning
FACTS
- it could be expected since Libres was Capiral's immediate
- Petitioner Libres was an Assistant Manager at National Steel
superior. Fear of retaliation and backlash, not to forget the
Corp.
social humiliation and embarrassment that victims of this
- In August, 1993, he received a Notice of investigation
human frailty usually suffer, are all realities that Capiral had to
requesting him to submit a written explanation regarding the
contend with. Moreover, the delay did not detract from the truth
charge of sexual harassment made by Capiral, Hynson’s (his
derived from the facts. Petitioner Libres never questioned the
boss) secretary, and warned him that failure to file this would
veracity of Capiral's allegations. In fact his narration even
be construed as a waiver of his right to be heard.
corroborated the latter's assertion in several material points. He
- He submitted his explanation, denying the accusation, offering
only raised issue on the complaint's protracted filing.
to submit himself for clarificatory interrogation
3. YES
- Hynson conducted an internal investigation, letting Libres and
Reasoning
Capiral provide their sides of the issue
- Due process as a constitutional precept does not always
- Hynson Jr. submitted his report to the Management Evaluation
require a trial type proceeding. It is satisfied when a person is
Committee (MEC). The MEC concluded that the charges against
notified of the charge against him and given an opportunity to
petitioner constituted a violation of the Plant's Rules and
explain or defend himself. The essence is simply to be heard, an
Regulations. It opined that "touching a female subordinate's
opportunity to seek a reconsideration of the action complained
hand and shoulder, caressing her nape and telling other people
of. Petitioner was given a Notice of Investigation, he was asked
that Capiral was the one who hugged and kissed or that she
to submit a a written explanation to his superior, he was
responded to the sexual advances are unauthorized acts that
allowed to air his grievance in a private session, and upon the
damaged her honor". Referring to the Manual of the Philippine
release of the suspension order made by the MEC he was
Daily Inquirer in defining sexual harassment, the MEC finally
requested its reconsideration (but he was denied)
concluded that petitioner's acts clearly constituted sexual
- The personal confrontation with the MEC officers, which he
harassment as charged and recommended petitioner's
requested, was not necessary, for they had already
suspension for thirty (30) days without pay.
exhaustively presented their claims and defenses in different
- Libres filed a complaint for illegal suspension and unjust
fora. Litigants may be heard through pleadings, written
discrimination against respondent NSC and its officers, private
explanations, position papers, memoranda or oral arguments
respondents herein, before the Labor Arbiter. Citing the failure
(Howevers Savings and Loan Association v NLRC).
of the MEC to grant him audience despite his offer to answer
Disposition petition is DISMISSED, no grave abuse of
clarificatory questions, petitioner claimed denial of due process.
discretion having been committed by public respondent
- Petitioner primarily disputes the failure of the NLRC to apply
National Labor Relations Commission in upholding the
RA No. 7877, "An Act Declaring Sexual Harassment Unlawful in
suspension of petitioner Carlos G. Libres as justified and in
the Employment, Education or Training Environment and for
accordance with due process. Consequently, its decision of 28
Other Purposes," in determining whether he actually committed
August 1995 as well as its resolution of 31 October 1995 is
sexual harassment. He asserts that his acts did not fall within
AFFIRMED.
the definition and criteria of sexual harassment as laid down in
Sec. 3 of the law. 5 Specifically, he cites public respondent's
failure to show that his acts of fondling the hand and massaging PHIL AEOLUS AUTOMOTIVE UNITED CO V NLRC
the shoulders of Capiral "discriminated against her continued (CORTEZ)
employment," "impaired her rights and privileges under the 331 SCRA 237 / 382 PHIL 250
Labor Code," or "created a hostile, intimidating or offensive
environment." BELLOSILLO; April 28, 2000
- Petitioner questioned the set off since there was no call or
notice for the payment of the unpaid subscription, and that the NATURE
alleged obligation is not enforceable. This petition seeks to set aside the Decision and the Resolution
- The NLRC held that a stockholder who fails to pay his unpaid of NLRC which modified the decision of the Labor Arbiter finding
subscription on call becomes a debtor of the corporation and petitioners not guilty of illegal dismissal.
that the set-off of said obligation against the wages and other
due to petitioner is not contrary to law, morals, public policy FACTS
- Petitioner Philippine Aeolus Automotive United Corporation
ISSUE (PAAUC) is a corporation duly organized and existing under
1. WON RA 7877 is applicable in this case (to determine Philippine laws, petitioner Francis Chua is its President while
whether he actually committed sexual harassment.) private respondent Rosalinda C. Cortez was a company nurseof
2. WON the delay in instituting the complaint shows that it was petitioner corporation until her termination on 7 November
only an afterthought 1994.
3. WON the requirements of due process were sufficiently
Labor Law 1
- On 5 October 1994 a memorandum was issued by Ms. Myrna
Palomares, Personnel Manager of petitioner corporation,
addressed to private respondent Rosalinda C. Cortez requiring
her to explain within forty-eight (48) hours why no disciplinary
action should be taken against her (a) for throwing a stapler at
Plant Manager William Chua, her superior, and uttering
invectives against him on 2 August 1994; (b) for losing the
amount of P1,488.00 entrusted to her by Plant Manager Chua to
be given to Mr. Fang of the CLMC Department on 23 August
1994; and, (c) for asking a co-employee to punch-in her time
card thus making it appear that she was in the office in the
morning of 6 September 1994 when in fact she was not. The
memorandum however was refused by private respondent
although it was read to her and discussed with her by a co-
employee. She did not also submit the required explanation, so
that while her case was pending investigation the company
placed her under preventive suspension for thirty (30) days
effective 9 October 1994 to 7 November 1994.
- On 20 October 1994, while Cortez was still under preventive
suspension, another memorandum was issued by petitioner
corporation giving her seventy-two (72) hours to explain why no
disciplinary action should be taken against her for allegedly
failing to process the ATM applications of her nine (9) co-
employees with the Allied Banking Corporation. On 21 October
1994 private respondent also refused to receive the second
memorandum although it was read to her by a co-employee. A
copy of the memorandum was also sent by the Personnel
Manager to private respondent at her last known address by
registered mail.
- Meanwhile, private respondent submitted a written
explanation with respect to the loss of the P1,488.00 and the
punching-in of her time card by a co-employee.
- On 3 November 1994 a third memorandum was issued to
private respondent, this time informing her of her termination
from the service effective 7 November 1994 on grounds of
gross and habitual neglect of duties, serious misconduct and
fraud or willful breach of trust.
- On 6 December 1994 private respondent filed with the Labor
Arbiter a complaint for illegal dismissal, non-payment of annual
service incentive leave pay, 13th month pay and damages
against PAAUC and its president Francis Chua.
- LA rendered a decision holding the termination of Cortez as
valid and legal, at the same time dismissing her claim for
damages for lack of merit.
- NLRC reversed the decision of the LA and found petitioner
corporation guilty of illegal dismissal of private respondent
Cortez.
ISSUES
1. WON the NLRC gravely abused its discretion in holding as
illegal the dismissal of private respondent
2. WON she is entitled to damages in the event that the
illegality of her dismissal is sustained
HELD
1. NO
- Cortez claims that as early as her first year of employment her
Plant Manager, William Chua, already manifested a special
liking for her, so much so that she was receiving special
treatment from him who would oftentimes invite her "for a
date," which she would as often refuse. On many occasions, he
would make sexual advances - touching her hands, putting his
arms around her shoulders, running his fingers on her arms and
telling her she looked beautiful. The special treatment and
sexual advances continued during her employment for four (4)
years but she never reciprocated his flirtations, until finally, she
noticed that his attitude towards her changed. He made her
understand that if she would not give in to his sexual advances
he would cause her termination from the service; and he made
good his threat when he started harassing her. She just found
out one day that her table which was equipped with telephone
and intercom units and containing her personal belongings was
transferred without her knowledge to a place with neither
telephone nor intercom, for which reason, an argument ensued
A2010 - 187 - Disini
when she confronted William Chua resulting in her being
charged with gross disrespect.
- The Supreme Court, in a litany of decisions on serious
misconduct warranting dismissal of an employee, has ruled that
for misconduct or improper behavior to be a just cause for
dismissal (a) it must be serious; (b) must relate to the
performance of the employee’s duties; and, (c) must show that
the employee has become unfit to continue working for the
employer. The act of private respondent in throwing a stapler
and uttering abusive language upon the person of the plant
manager may be considered, from a lay man's perspective, as a
serious misconduct. However, in order to consider it a serious
misconduct that would justify dismissal under the law, it must
have been done in relation to the performance of her duties as
would show her to be unfit to continue working for her
employer. The acts complained of, under the circumstances
they were done, did not in any way pertain to her duties as a
nurse. Her employment identification card discloses the nature
of her employment as a nurse and no other. Also, the
memorandum informing her that she was being preventively
suspended pending investigation of her case was addressed to
her as a nurse.
2. YES
- The gravamen of the offense in sexual harassment is not the
violation of the employee's sexuality but the abuse of power by
the employer. Any employee, male or female, may rightfully cry
"foul" provided the claim is well substantiated. Strictly
speaking, there is no time period within which he or she is
expected to complain through the proper channels. The time to
do so may vary depending upon the needs, circumstances, and
more importantly, the emotional threshold of the employee.
- Private respondent admittedly allowed four (4) years to pass
before finally coming out with her employer's sexual
impositions. Not many women, especially in this country, are
made of the stuff that can endure the agony and trauma of a
public, even corporate, scandal. If petitioner corporation had
not issued the third memorandum that terminated the services
of private respondent, we could only speculate how much
longer she would keep her silence. Moreover, few persons are
privileged indeed to transfer from one employer to another. The
dearth of quality employment has become a daily "monster"
roaming the streets that one may not be expected to give up
one's employment easily but to hang on to it, so to speak, by all
tolerable means. Perhaps, to private respondent's mind, for as
long as she could outwit her employer's ploys she would
continue on her job and consider them as mere occupational
hazards. This uneasiness in her place of work thrived in an
atmosphere of tolerance for four (4) years, and one could only
imagine the prevailing anxiety and resentment, if not
bitterness, that beset her all that time. But William Chua faced
reality soon enough. Since he had no place in private
respondent's heart, so must she have no place in his office. So,
he provoked her, harassed her, and finally dislodged her; and
for finally venting her pent-up anger for years, he "found" the
perfect reason to terminate her.
- In determining entitlement to moral and exemplary damages,
we restate the bases therefor. In moral damages, it suffices to
prove that the claimant has suffered anxiety, sleepless nights,
besmirched reputation and social humiliation by reason of the
act complained of.22 [Art. 2217, New Civil Code of the
Philippines.] Exemplary damages, on the other hand, are
granted in addition to, inter alia, moral damages "by way of
example or correction for the public good"23 [Art. 2229, id.] if
the employer "acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner."24 [Art. 2232, id.]
- Anxiety was gradual in private respondent's five (5)-year
employment. It began when her plant manager showed an
obvious partiality for her which went out of hand when he
started to make it clear that he would terminate her services if
she would not give in to his sexual advances. Sexual
harassment is an imposition of misplaced "superiority" which is
enough to dampen an employee's spirit in her capacity for
advancement. It affects her sense of judgment; it changes her
life. If for this alone private respondent should be adequately
Labor Law 1
compensated. Thus, for the anxiety, the seen and unseen hurt
that she suffered, petitioners should also be made to pay her
moral damages, plus exemplary damages, for the oppressive
manner with which petitioners effected her dismissal from the
service, and to serve as a forewarning to lecherous officers and
employers who take undue advantage of their ascendancy over
their employees.
Disposition Decision of NLRC finding the dismissal of private
respondent without just cause and ordering petitioners to pay
her back wages computed from the time of her dismissal, which
should be full back wages, is AFFIRMED. However, in view of the
strained relations between the adverse parties, instead of
reinstatement ordered by public respondent, petitioners should
pay private respondent separation pay equivalent to one (1)
month salary for every year of service until finality of this
judgment. In addition, petitioners are ordered to pay private
respondent P25,000.00 for moral damages and P10,000.00 for
exemplary damages.
SECTION 11: MINORS
11.01 MINORS AND THE
CONSTITUTION
11.02 LAW
11.03 DISCRIMINATION
SECTION 12: HOUSEKEEPERS
12.01 COVERAGE
12.02 HOUSEHELPERS
12.03 NON-HOUSEHOLD WORK
ASSIGNMENT
BARCENAS V NLRC (REV SIM DEE)
187 SCRA 498
GANCAYCO; April 19, 1989
FACTS
- In 1978, Chua Se Su (Su, for short) in his capacity as the Head
Monk of the Buddhist Temple of Manila and Baguio City and as
President and Chairman of the Board of Directors of the Poh Toh
Buddhist Association of the Phils. Inc. hired the petitioner,
Filomena Barcenas, who speaks the Chinese language as
secretary and interpreter.
- Her position required her to receive and assist Chinese visitors
to the temple, act as tourist guide for foreign Chinese visitors,
attend to the callers of the Head Monk as well as to the food for
the temple visitors, run errands for the Head Monk such as
paying the Meralco, PLDT, MWSS bills and act as liaison in some
government offices. Aside from her pay and allowances under
the law, she received an amount of P500 per month plus free
board and lodging in the temple.
- In December, 1979, Su assumed the responsibility of paying
for the education of Barcenas’ nephew. In 1981, Su and
A2010 - 188 - Disini
Barcenas had amorous relations. In May, 1982, or five months
before giving birth to the alleged son of Su on October 12,
1982, she was sent home to Bicol. Upon the death of Su in July,
1983, she remained and continued in her job.
- . In 1985, Manuel Chua (Chua, for short) was elected President
and Chairman of the Board of the Poh Toh Buddhist Association
of the Philippines, Inc. and Rev. Sim Dee (Dee, for short) was
elected Head Buddhist Priest. Thereafter, Chua and Dee
discontinued payment of her monthly allowance and the
additional P500 effective 1983. In addition, Barcenas and her
son were evicted forcibly from their quarters in the temple by
six police officers. She was brought first to the Police precinct in
Tondo and then brought to Aloha Hotel where she was
compelled to sign a written undertaking not to return to the
Buddhist temple in consideration of the sum of P10,000. She
refused and Chua shouted threats against her and her son. Her
personal belongings including assorted jewelries were never
returned.
- The Labor Arbiter ruled for Barcenas but the NLRC reversed.
ISSUES
1. WON Barcenas was a regular employee of the Manila
Buddhist Temple
2. WON Barcenas was illegally dismissed
HELD
1. YES
Reasoning
- We agree with the petitioner's claim that she was a regular
employee of the Manila Buddhist Temple as secretary and
interpreter of its Head Monk, Su. As Head Monk, President and
Chairman of the Board of Directors of the Poh Toh Buddhist
Association of the Philippines, Su was empowered to hire the
petitioner under Article V of the By-laws of the Association
which states:
"The President or in his absence, the Vice President shall
represent the Association in all its dealings with the public,
subject to the Board, shall have the power to enter into any
contract or agreement in the name of the Association, shall
manage the active business operation of the Association,
shall deal with the bank or banks."
- Chua and Dee, on the other hand, claimed that Barcenas was
never an employee of the Poh Toh Temple but a servant who
confined herself to the temple and to the personal needs of the
late Chua Se Su and thus, her position is co-terminus with that
of her master. However, the work that she performed in the
temple could not be categorized as mere domestic work.
Barcenas, being proficient in the Chinese language, attended to
the visitors, mostly Chinese, who came to pray or seek advice
before Buddha for personal or business problems; arranged
meetings between these visitors and Su and supervised the
preparation of the food for the temple visitors; acted as tourist
guide of foreign visitors; acted as liaison with some government
offices; and made the payment for the temple, Meralco, MWSS
and PLDT bills. Indeed, these tasks may not be deemed
activities of a household helper. They were essential and
important to the operation and religious functions of the
temple.
2. NO
Reasoning
- Her status as a regular employee ended upon her return to
Bicol in May, 1982 to await the birth of her lovechild allegedly
by Su. The records do not show that she filed any leave from
work or that a leave was granted her. Neither did she return to
work after the birth of her child on October 12,1982, whom she
named Robert Chua alias Chua Sim Tiong [Whoa, wait a minute!
If you’re alert you’ll realize that Sim is the NEW Head Monk’s
name! Hmmm… don’t you think something else’s going on
here? ]. The NLRC found that it was only in July, 1983 after Su
died that she went back to the Manila Buddhist Temple.
- She herself supplied the reason for her return. She stated:
"It was the death-bed instruction to her by Chua Se So to stay
at the temple and to take care of the two boys and to see to it
that they finish their studies to become monks and when they
Labor Law 1
are monks to eventually take over the two temples as their
inheritance from their father."
- Thus, her return to the temple was no longer as an employee
but rather as Su's mistress who is bent on protecting the
proprietary and hereditary rights of her son and nephew. In her
pleadings, the petitioner claims that they were forcefully
evicted from the temple, harassed and threatened by
respondents and that the Poh Toh Buddhist Association is a
trustee corporation with the children as cestui que trust. These
claims are not proper in this labor case. They should be
appropriately threshed out in the complaints already filed by
the petitioner before the civil courts. Due to these claims, we
view the respondents' offer of P10,000 as indicative more of
their desire to evict the petitioner and her son from the temple
rather than an admission of an employer-employee relation.
- The petitioner's claim for unpaid wages since May, 1982 which
she filed only in 1986, has already prescribed. Under Article 292
of the Labor Code, all money claims arising from employer-
employee relations must be filed within three years from the
time the cause of action accrued, otherwise they shall forever
be barred.
- Finally, while petitioner contends that she continued to work in
the temple after Su died, there is, however, no proof that she
was re-hired by the new Head Monk. In fact, she herself
manifested that respondents made it clear to her in no
uncertain terms that her services as well as her presence and
that of her son were no longer needed. However, she persisted
and continued to work in the temple without receiving her
salary because she expected Chua and Dee to relent and permit
the studies of the two boys. Consequently, under these
circumstances, no employer-employee relationship could have
arisen.
Disposition Decision of the NLRC is AFFIRMED.
APEX MINING CO V NLRC
196 SCRA 251
GANCAYCO; April 22, 1991
NATURE
Special civil action for certiorari to annul NLRC decision
A2010 - 189 - Disini
thereof, and ministers exclusively to the personal comfort
and enjoyment of the employer's family.
- The foregoing definition clearly contemplates such
househelper or domestic servant who is employed in the
employer's home to minister exclusively to the personal
comfort and enjoyment of the employer's family. The definition
cannot be interpreted to include househelp or laundrywomen
working in staffhouses of a company
- The criteria is the personal comfort and enjoyment of the
family of the employer in the home of said employer.
- While it may be true that the nature of the work of a
househelper, domestic servant or laundrywoman in a home or
in a company staffhouse may be similar in nature, the
difference in their circumstances is that in the former instance
they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in
business or industry or any other agricultural or similar pursuit,
service is being rendered in the staffhouses or within the
premises of the business of the employer. In such instance,
they are employees of the company or employer in the business
concerned entitled to the privileges of a regular employee.
Disposition Petition dismissed
12.04 CONDITIONS OF
EMPLOYMENT
ULTRA VILLA FOOD HOUSE V GENISTON
[PAGE 158]
SECTION 13: HOMEWORKERS
13.01 COVERAGE AND
REGULATION

FACTS 13.02 EMPLOYER

- Sinclita Candida was employed by Apex Mining Company, Inc.
to perform laundry services at its staff house. At first, she was
paid on a piece rate basis. Later, she was paid on a monthly
basis.
- While she was hanging her laundry, she accidentally slipped
and hit her back on a stone. She reported the accident to her
immediate supervisor and to the personnel officer. As a result of
the accident she was not able to continue with her work.
- She was permitted to go on leave for medication and was
offered P2k which was eventually increased to P5k to persuade
her to quit her job, but she refused the offer and preferred to
return to work. Petitioner did not allow her to return to work and
dismissed her.
- Labor arbiter ordered Apex Mining Company to pay the
complainant Salary Differential, Emergency Living Allowance,
13th Month Pay Differential and separation pay of one month
for every year of service NLRC affirmed.

ISSUE
WON the househelper in the staff houses of an industrial
company is a domestic helper

HELD
NO
- Petitioner is a regular employee
- Rule XIII, Section l(b), Book 3 of the Labor Code:
The term "househelper" as used herein is synonymous to the
term "domestic servant" and shall refer to any person,
whether male or female, who renders services in and about
the employer's home and which services are usually
necessary or desirable for the maintenance and enjoyment