LABOR STANDARDS CASE DIGEST

HANDICAPPED WORKERS
BERNARDO ET AL V. NLRC & FEBC
GR NO. 122917, 12 JULY 1999
FACTS:
The dismissed complainants, numbering
43, are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent
Far East Bank and Trust Co. as Money Sorters and
Counters through a uniformly worded agreement
called "Employment Contract for Handicapped
Workers". Disclaiming that complainants were
regular employees, respondent Far East Bank
and Trust Company maintained that
complainants were hired temporarily under a
special employment arrangement which was a
result of overtures made by some civic and
political personalities to the respondent Bank;
that complainant[s] were hired due to
"pakiusap"; that the tellers themselves already
did the sorting and counting chore as a regular
feature and integral part of their duties; that
through the "pakiusap" of Arturo Borjal,
the tellers were relieved of this task of counting
and sorting bills in favor of deaf-mutes without
creating new positions as there is no position
either in the respondent or in any other bank in
the Philippines which deals with purely counting
and sorting of bills in banking operations. The LA
&, on appeal, the NLRC ruled against petitioners,
holding that they could not be deemed regular
employees since they were hired as an
accommodation to the recommendation of civic
oriented personalities whose employments were
covered by Employment Contracts w/
special provisions on duration of contract as
specified under Art. 80. Hence, the terms of the
contract shall be the law between the parties.
The uniform employment contracts of the
petitioners stipulated that they shall be trained
for a period of one month, after which the
employer shall determine whether or not they
should be allowed to finish the 6-month term of
the contract. Furthermore, the employer may
terminate the contract at any time for a just and
reasonable cause. Unless renewed in writing by
the employer, the contract shall automatically
expire at the end of the term. The stipulations
in the employment contracts indubitably
conform with Art. 80 LC
w/c provides for the requisites in the employmen
t agreement between an employer whoemploys
handicapped workers. Succeeding events
and the enactment of RA No. 7277 (the
Magna Carta for Disabled Persons), however,
justify the application of Article 280of the Labor
Code.
HOURS OF WORK
"BROTHERHOOD" LABOR UNITY MOVEMENT OF
THE PHILIPPINES, ANTONIO CASBADILLO, ET AL.,
V. HON. RONALDO B. ZAMORA
G.R. NO. L-48645. JANUARY 7, 1987

ISSUE: Whether petitioners have become regular

employees.

HELD:
Only the employees, who worked for
more than six months and whose contracts were
renewed are deemed regular. Hence, their
dismissal from employment was illegal. The facts,
viewed in light of the Labor Code and the Magna
Carta for Disabled Persons indubitably show
that the petitioners, except sixteen of them,
should be deemed regular employees.

MARIA ANNY G. YANONG Page 1

 LABOR STANDARDS CASE DIGEST
CONTINENTAL MARBLE CORP. AND FELIPE
DAVID V. NLRC (G.R. NO. L-43825 MAY 9, 1988)
Nature of the Case:
A petition for mandamus, prohibition and certior
ari with preliminary injunction seeking to annul N
LRC’s decision dismissing appeal ofpetitioners.
FACTS:
Nasayao claims to have been employed as
plant manager with a monthly income equivalent
of P 3,000 or 25% net monthly income of
Continental Marble (Continental) [whichever is
greater] which he alleged to have failed his three
months income sometime in 1974, thus ought
from the NLRC recovery of such unpaid salary.
Continental denies such employment status and
insists that the relationship is that of a joint
MARIA ANNY G. YANONG
venture and clarified further that the agreement
to pay Nasayao’s share in the net income is
limited if there is any income, and during those
three months, Continental had no such profits to
speak of to give Nasayao his share. When the
matter was submitted for voluntary arbitration,
Continental challenged the capacity of the
arbitrator, but arbitrator refused and rendered
judgment awarding money claims to Nasayao.
Petitioner appealed citing labor arbiter for grave
abuse of discretion and that the resulting
judgment was not supported by evidence.
Nasayao filed a motion to dismiss citing that the
Labor Arbiter’s decision is final [subject to
exhaustion of administrative remedies]and
thereafter filed a motion for writ of execution.
NLRC dismissed the appeal and ordered
petitioners to comply with the earlier decision.
ISSUE: WON Nasayao is an employee.
HELD:
No. The Court accords respect and finality to
the decisions of quasi-judicial agencies, but when
the same is not supported by substantial
evidence, the Court will intervene. In this case,
the finding of Nasayao as an employee of
Continental by the Voluntary Arbitrator is
not supported by substantial evidence:
(1) It was impossible for Continental Marble
to hire a plant manager on account of its
business reverses at the time;
(2) he was not included in the payroll nor in
the list of employees submitted by the
Continental to SSS;
(3) the element of control is wanting for:
(a) Nasayao was free to conduct
performance of his work;
(b) at his own time;
(c)was compensated as a result of his
own efforts.
And since there was no employment
relationship between Continental Marble and
Nasayao, there is no basis for the award of
unpaid wages or salaries.
INSULAR LIFE ASSURANCE CO. V. NLRC
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 LABOR STANDARDS CASE DIGEST
(NOV. 15, 1989)
FACTS:
Insular Life (company) and Basiao entered
into a contract by which Basiao was authorized to
solicit for insurance in accordance with the rules
of the company. He would also receive
compensation, in the form of commissions. The
contract also contained the relations of
the parties, duties of the agent and the acts
prohibited to him including the modes of
termination. After 4 years, the parties entered
into another contract – an Agency Manager’s
Contact – and to implement his end of it, Basiao
organized an agency while concurrently fulfilling
his commitment under the first contract. The
company terminated the Agency Manager’s
Contract. Basiao sued the company in a civil
action. Thus, the company terminated Basiao’s
engagement under the first contract and stopped
payment of his commissions.
ISSUE: W/N Basiao had become the company’s
employee by virtue of the contract, thereby
placing his claim for unpaid commissions
HELD:
No. Rules and regulations governing the
conduct of the business are provided for in the
Insurance Code. These rules merely serve as
guidelines towards the achievement of the
mutually desired result without dictating the
means or methods to be employed in attaining it.
Its aim is only to promote the result, thereby
creating no employer-employee relationship. It is
usual and expected for an insurance company to
promulgate a set of rules to guide its commission
agents in selling its policies which prescribe the
qualifications of persons who may be insured.
None of these really invades the agent’s
contractual prerogative to adopt his own
selling methods or to sell insurance at his own
time and convenience, hence cannot justifiable
be said to establish an employer-employee
relationship between Basiao and the
company. The respondents limit themselves to
pointing out that Basiao’s contract with the
company bound him to observe and conform to
such rules. No showing that such rules were in fac
t promulgated which effectivelycontrolled or
restricted his choice of methods of selling
insurance. Therefore, Basiao was not an
MARIA ANNY G. YANONG
employee of the petitioner, but a commission
agent, an independent contract whose claim for
unpaid commissions should have been litigated
in an ordinary civil action. Wherefore, the
complaint of Basiao is dismissed.
JARDIN V. NLRC
G.R. NO. 119268
FEBRUARY 23, 2000
NATURE:
Special civil action for certiorari seeks to annul
the decision of public respondent in which denied
the petitioners motion for reconsideration.
FACTS:
Petitioners were taxi drivers
of private respondent, Philjama International,
Inc., a domestic corporation engaged in the
operation of “Goodman Taxi”. Petitioners drive
the taxicabs every other day on a 24-hour work
schedule under the boundary system. They earn
an average of P400.00 daily. Private respondents
deduct petitioners daily earning by P30.00 for
the washing of the taxi units. Petitioner believes
that such action by the PR is illegal so they form a
labor union to protect their rights and interests.
In effect, PR upon learning their plans
refused to let petitioners drive their taxicabs
when they report for work starting Aug. 6, 1991
and on succeeding days. Petitioners filed with the
labor arbiter a complaint against PR for unfair
labor, illegal dismissal and illegal deduction of
washing fees > > > DENIED lack of merit.
Appeal: NLRC reversed and set aside the decision
of Labor arbiter. That petitioners are employees
of PR and such dismissal must be for just cause
and after due process.
1st motion for recon>>>DENIED.
2nd recon granted: that petitioners and PR have
no employer-employee relationship. Petitioners
sought reconsideration>>>DENIED. Hence, this
instant petition.
ISSUE/S: Whether employer-employee
relationship exists in boundary system?
HELD:
Page 3
 LABOR STANDARDS CASE DIGEST
YES. The Court used the Four Fold Test:
(1) the selection and engagement of the
employees;
(2) the payment of wages;
(3) the power of dismissal;
(4) the power of control the employees
conduct (most important).
The court ruled that owners/operators and
drivers have employer- employee relationship
because the former exercise supervision and
control over the latter. The management of the
business is in the hands of the owner.
The owner as the holder of the certificate
of public convenience must see to it that thedrive
r follows the route prescribed by the franchising
authority and the rules promulgated as regards
its operation. The fact that the drivers do not
receive fixed wages but only excess in boundary
is not sufficient to withdraw employer-employee
relationship. Hence, petitioners as employees of
PR can only be dismissed for just cause and with
due process. Petition is granted. Private
respondent were ordered to reinstate petitioners
to their positions and likewise ordered to
pay petitioners their full backwages.
MANILA GOLF & COUNTRY CLUB, INC. VS.
IAC AND FERMIN LLAMARG.R. NO. 64948
SEPTEMBER 27, 1994
FACTS:
This is originally filed with the Social
Security Commission (SSC) via petition of 17
persons who styled themselves as “Caddies of
Manila Golf and Country Club”- PTCCEA for the
coverage and availment of benefits of the Social
Security Act as amended, PTCCEA (Philippine
Technical, Clerical, Commercial Employees
Association) a labor organization where which
they claim for membership. The same time two
other proceedings were filed and pending. These
are certification election case filed by PTCCEA on
behalf of the same caddies of Manila Golf and
Country club which was in favor of the caddies
and compulsory arbitration case involving
PTCCEA and Manila Golf and Country Club which
was dismissed and ruled that there was no
employer-employee relationship between the
caddies and the club.
MARIA ANNY G. YANONG
ISSUE: Whether or not rendering caddying
services for members of golf clubs and their
guests in said clubs courses or premises are the
employees of such clubs and therefore within the
compulsory coverage of the Social Security
System (SSS).
HELD:
The Court does not agree that the facts
logically point to the employer-employee
relationship. In the very nature of things, caddies
must submit to some supervision of their conduct
while enjoying the privilege of pursuing their
occupation within the premises and grounds of
whatever club they do work in. They work for the
club to which they attach themselves on
sufferance but, on the other hand, also without
having to observe any working hours, free to
leave anytime they please, to stay away for as
long they like. These considerations clash
frontally with the concept of employment. It can
happen that a caddy who has rendered services
to a player on one day may still find sufficient
time to work elsewhere. Under such
circumstances, the caddy may leave the premises
and to go to such other place of work that he
wishes. These are things beyond the control of
the petitioner. The caddy (LLamar) is not an
employee of petitioner Manila Golf and Country
Club and the petitioner is under no obligation to
report him for compulsory coverage of SSS.
DY KEH BENG v. INTERNATIONAL LABOR and
MARINE UNION OF THE PHILIPPINES, ET AL.
G.R. No. L-32245. May 25, 1979
FACTS:
A charge of unfair labor practice was filed
against Dy Keh Beng, a proprietor of a basket
factory, by dismissing Solano and Tudla for their
union activities. Dy Keh Beng contended that he
did not know Tudla and Solano was not his
employee because the latter came to the
establishment only when there was work which
he did on “pakiaw basis”. Dy Keh Beng countered
with a special defense of simple extortion
committed by the head of the labor union.
ISSUE: W/N there existed an employee-employer
relation between petitioner and respondents.
HELD:
Page 4
 LABOR STANDARDS CASE DIGEST
Yes. Evidence showed that the work of
Solano and Tudla was continuous except in the
event of illness, although their services were
compensated on piece basis. The control test
calls for the existence of the right to control the
manner of doing the work, not the actual exercise
of the right considering that Dy Keh Beng is
engaged in the manufacture of baskets known as
“kaing”, those working under Dy would be
subject to Dy’s specifications such as the size and
quality of the “kaing”. And since the laborers are
done at Dy’s establishments, it could be inferred
that Dy could easily exercise control upon them.
As to the contention that Solano was not an
employee because he worked on piece basis, the
court ruled that it should be determined that if
indeed payment by piece is just a method of
compensation and does not define the essence of
the relation.
Payment cannot be construed by piece
where work is done in such establishment so as
to put the worker completely at liberty to turn
him out and take it another at pleasure. Justice
Perfecto also contended that pakyaw system is a
labor contract between employers and
employees between capitalists and laborers.
Wherefore, the award of backwages is modified
to an award of backwages for 3 years at the rated
of compensation the employees were receiving at
the time of dismissal.
SONZA V. ABS-CBN BROADCASTING CORP.
(G.R. NO. 138051) JUNE 10, 2004
FACTS:
Respondent ABS-CBN signed an
Agreement with the Mel and Jay Management
Development Corporation where the latter
agreed to provide petitioner Sonza’s services
exclusively to ABS-CBN as talent for radio and
television. Later, Sonza tendered a letter
rescinding their agreement and filed a complaint
before the DOLE for payment of his labor
standard benefits. ABS-CBN contends on the
ground that no employer-employee relationship
existed between the parties. The Labor Arbiter
found for respondent citing that Sonza as a
‘talent’ cannot be considered an employee of
petitioner. Both NLRC and CA affirmed.
MARIA ANNY G. YANONG
ISSUE: WON employer-employee relationship
existed between petitioner and ABS-CBN.
HELD:
NO. Applying the control test to the
present case, we find that SONZA is not an
employee but an independent contractor. The
control test is the most important test our courts
apply in distinguishing an employee from an
independent Contractor. This test is based on the
extent of control the hirer exercises over a
worker. The greater the supervision and control
the hirer exercises, the more likely the worker is
deemed an employee. The converse holds true as
well – the less control the hirer exercises, the
more likely the worker is considered an
independent contractor.
We find that ABS-CBN was not involved in the
actual performance that produced the finished
product of SONZA’s work. ABS-CBN did not
instruct SONZA how to perform his job. ABS-CBN
merely reserved the right to modify the program
format and airtime schedule “for more effective
programming.” ABS-CBN’s sole concern was the
quality of the shows and their standing in the
ratings. Clearly, ABS-CBN did not exercise control
over the means and methods of performance of
SONZA’s work.
In any event, not all rules imposed by the
hiring party on the hired party indicate that the
latter is an employee of the former. In this case,
SONZA failed to show that these rules controlled
his performance. We find that these general rules
are merely guidelines towards the achievement
of the mutually desired result, which are top-
rating television and radio programs that comply
with standards of the industry. Being an exclusive
talent does not by itself mean that SONZA is an
employee of ABS-CBN. Even an independent
contractor can validly provide his services
exclusively to the hiring party. In the broadcast
industry, exclusivity is not necessarily the same as
control.
*Not every performance of services for a fee
creates an employer-employee relationship. To
hold that every person who renders services to
another for a fee is an employee – to give
meaning to the security of tenure clause – will
lead to absurd results.
Page 5
 LABOR STANDARDS CASE DIGEST
INVESTMENT PLANNING CORPORATION OF THE
PHILIPPINES VS. SSS
FACTS:
Petitioner is a domestic corporation
engaged in business management and sale of
securities. It has two classes of agents who sell its
investment plans:
1). Salaried employees who keep definite
hours and work under control and
supervision of the company, and
2). Registered representatives who work on
commission basis.
In 1960, the petitioner applied to the Social
Security System, the respondent, for exemption
of the registered representatives from the
compulsory coverage of the Social Security Act
but later denied.
ISSUE: Whether or not the petitioner’s registered
representatives are employees within the
meaning of the Social Security Act.
HELD:
NO. Wherefore the employee was defined
by the Social Security Act as: Any person who
performs services for an employer in which either
or both mental and physical efforts are used and
who receives compensation for such services,
where there is an employer-employee
relationship: Provided, That a self-employed
professional shall be both employee and
employer at the same time. (As amended by Sec.
4, R.A. 2658 and Sec. 2, P.D. No. 1636, S-1979)
The representatives are in reality commission
agents. They cannot be considered employees for
they were just paid not by the investor but in a
form of a commission, their services may be
terminated at any certain time, and there is no
element of control for they do not devote their
time exclusively to or solely for the petitioner; the
time and the effort they spend in their work
depend upon entirely upon their own will and
initiative.
MARIA ANNY G. YANONG
NATIONAL SUGAR REFINERIES CORPORATION
VS. NLRC, G.R. NO. 101761. MARCH 24, 1993
FACTS:
Petitioner National Sugar Refineries
Corporation (NASUREFCO), a corporation which is
fully owned and controlled by the Government,
operates three (3) sugar refineries located at
Bukidnon, Iloilo and Batangas. Private respondent
union represents the former supervisors of the
NASUREFCO Batangas Sugar Refinery.
In 1988, petitioner implemented a Job
Evaluation (JE) Program affecting all employees,
from rank-and-file to department heads. We
glean from the records that for about ten years
prior to the JE Program, the members of
respondent union were treated in the same
manner as rank-and file employees. As such, they
used to be paid overtime, rest day and holiday
pay pursuant to the provisions of Articles 87, 93
and 94 of the Labor Code as amended.
With the implementation of the JE
Program, members of respondent union were re-
classified under levels S-5 to S-8 which are
considered managerial staff for purposes of
compensation and benefits. In May 1990,
petitioner NASUREFCO recognized herein
respondent union, which was organized pursuant
to Republic Act No. 6715 allowing supervisory
employees to form their own unions, as the
bargaining representative of all the supervisory
employees at the NASUREFCO Batangas Sugar
Refinery.
In June 1990, the members of herein respondent
union filed a complainant with the executive
labor arbiter for non-payment of overtime, rest
day and holiday pay allegedly in violation of
Article 100 of the Labor Code.
In 1991, Executive Labor Arbiter Pido directed
NASUREFCO to pay for the wages complained of.
On appeal, in a decision promulgated on July
1991, respondent National Labor Relations
Commission (NLRC) affirmed the decision of the
labor arbiter on the ground that the members of
respondent union are not managerial employees,
and, therefore, they are entitled to overtime, rest
day and holiday pay. Respondent NLRC declared
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 LABOR STANDARDS CASE DIGEST
that these supervisory employees are merely
exercising recommendatory powers subject to
the evaluation, review and final action by their
department heads.
ISSUE: WON the Supervisors are considered
Managerial Employees and should no longer
receive overtime, rest day and holiday pay.
HELD:
Yes. Art. 82 Coverage. — The provisions of
this title shall apply to employees in all
establishments and undertakings whether for
profit or not, but not to government employees,
managerial employees, field personnel, members
of the family of the employer who are dependent
on him for support, domestic helpers, persons in
the personal service of another, and workers who
are paid by results as determined by the
Secretary of Labor in Appropriate regulations.
As used herein, 'managerial employees'
refer to those whose primary duty consists of the
management of the establishment in which they
are employed or of a department or subdivision
thereof, and to other officers or members of the
managerial staff." (Emphasis supplied.)
It is the submission of petitioner that while the
members of respondent union, as supervisors,
may not be occupying managerial positions, they
are clearly officers or members of the managerial
staff because they meet all the conditions
prescribed by law and, hence, they are not
entitled to overtime, rest day.
Quintessentially, with the promotion of the union
members, they are no longer entitled to the
benefits which attach and pertain exclusively to
their positions. Entitlement to the benefits
provided for by law requires prior compliance
with the conditions set forth therein. With the
promotion of the members of respondent union,
they occupied positions which no longer met the
requirements imposed by law. Their assumption
of these positions removed them from the
coverage of the law, ergo, their exemption
therefrom.
As correctly pointed out by petitioner, if the
union members really wanted to continue
receiving the benefits which attach to their
MARIA ANNY G. YANONG
former positions, there was nothing to prevent
them from refusing to accept their promotions
and their corresponding benefits. As the saying
goes by, they could not, as a simple matter of law
and fairness, get the best of both worlds at the
expense of NASUREFCO.
Promotion of its employees is one of the
jurisprudentially-recognized exclusive
prerogatives of management, provided it is done
in good faith. In the case at bar, private
respondent union has miserably failed to
convince this Court that the petitioner acted
implementing the JE Program. There is no
showing that the JE Program was intended to
circumvent the law and deprive the members of
respondent union of the benefits they used to
receive.
AUTO BUS TRANSPORT VS BAUTISTA
G.R. NO. 156367, MAY 16, 2005
FACTS:
Bautista, a driver-conductor of the
Autobus transport, was dismissed after his failure
to pay an amount demanded by the company for
the repair of the bus damaged in an accident
caused by him. He receives compensation by way
of commission per travel. Bautista complained for
illegal dismissal with money claims for
nonpayment of 13th month pay and service
incentive leave pay against Autobus.
Auto Bus’ Defenses:
Bautista’s employment was replete with
offenses involving reckless imprudence, gross
negligence, and dishonesty supported with copies
of letters, memos, irregularity reports, warrants
of arrest; In the exercise of management
prerogative, Bautista was terminated only after
providing for an opportunity to explain:
Labor Arbiter dismissed the complaint however
awarded Bautista his 13th month pay and service
incentive leave pay.
Auto Bus appealed. NLRC deleted the 13th month
pay award. In the CA, NLRC’s decision was
affirmed.
ISSUE: WON respondent is entitled to service
incentive leave pay.
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 LABOR STANDARDS CASE DIGEST
HELD:
Yes. Under Article 95 of the Labor Code,
every employee who has rendered at least one
year or service shall be entitled to a yearly service
incentive leave of five days with pay. In Section 1,
Rule V, Book III of the Implementing Rules and
Regulations of the Labor Code, the rule shall
apply to all, except… (d) Field personnel and
other employees whose performance is
unsupervised by the employer including those
who are engaged on task or contract basis, purely
commission basis, or those who are paid in a
fixed amount for performing work irrespective of
the time consumed in the performance thereof.
Petitioner’s contention that Bautista is not
entitled to service incentive leave because he is
paid on a purely commission basis must fail. The
phrase following “Field personnel” should not be
construed as a separate classification of
employees but is merely an amplification of the
definition of field personnel defined under the
Labor Code. Bautista neither falls under the
category field personnel. As defined, field
personnel are those whose performance of
service is unsupervised by the employer, the
workplace being away from the principal place of
business and whose hours and days of work
cannot be determined with reasonable certainty.
Bus companies have ways of determining the
hours worked by their drivers and conductors
with reasonable certainty. The courts have taken
judicial notice of the following:
1. Along the routes traveled, there are
inspectors assigned at strategic places
who board the bus to inspect the
passengers, the punched tickets, and the
conductor’s reports;
2. There is a mandatory once-a week car
barn or shop day, where the bus is
regularly checked;
3. The drivers and conductors must be at
specified place and time, as they observe
prompt departure and arrival;
At every depot, there is always a dispatcher
whose function is to see to it that the bus and
crew leaves and arrives at the estimated proper
time. By these reasons, drivers and conductors
are therefore under constant supervision while in
the performance of their work.
MARIA ANNY G. YANONG
SAN JUAN DE DIOS HOSPITAL EMPLOYEES
ASSOCIATION-AFW ET. AL VS. NLRC
G.R. NO. 126383, NOVEMBER 28, 1997
FACTS:
Then Labor Secretary Franklin M. Drilon
issued Policy Instruction No. 4 in line with R.A.
5901 which “requires that the covered hospital
workers who used to work 7 days a week should
be paid for such number of days for working only
5 days or 40 hours a week”.
Petitioners filed a complaint for the expeditious
implementation and payment by respondent”
Juan De Dios Hospital “. The Labor Arbiter and
NLRC both dismissed their complaints and MR
was also denied. Hence, this petition.
In said Policy Instruction, it was provided
that: “The Labor Code in its Article 83 adopts and
incorporates the basic provisions of RA 5901 and
retains its spirit and intent which is to shorten the
workweek of covered hospital personnel and at
the same time assure them of a full weekly
wage.”
ISSUE: WON the intent of Art. 83, LCP, is that
persons in subject hospitals and clinics who have
completed the 40-hour/5-day workweek in any
given workweek are entitled to a full weekly
wage for seven days.
HELD:
No.
What Article 83 merely provides are:
(1) the regular office hour of eight hours a
day, five days per week for health
personnel, and
(2) where the exigencies of service require
that health personnel work for six days or
forty-eight hours then such health
personnel shall be entitled to an
additional compensation of at least thirty
percent of their regular wage for work on
the sixth day.
There is nothing in the law that supports
then Secretary of Labor’s assertion that
“personnel in subject hospitals and clinics are
entitled to a full weekly wage for seven (7) days if
they have completed the 40-hour/5-day
workweek in any given workweek”.
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 LABOR STANDARDS CASE DIGEST
Also, if petitioners are entitled to two days off
with pay, then there appears to be no sense at all
why Section 15 of the implementing rules grants
additional compensation equivalent to the
regular rate plus at least twenty-five percent
thereof for work performed on Sunday to health
personnel, or an “additional straight-time pay
which must be equivalent at least to the regular
rate” ” for work performed in excess of forty
hours a week.
SIME DARBY V. NLRC
FACTS:
The workers of Sime Darby Pilipinas, Inc.
have a an 8-hour daily schedule which starts at
7:45 am and ends at 3:45 pm. They have a 30-
minute paid lunch break but during said break,
they are “on call” hence can be pulled out at any
time if the need arises. However, in August 1992,
Sime Darby issued a memorandum which
changed the working schedule from 7:45 am to
4:45 pm. This time, all employees will have a one-
hour lunch break which is no longer paid but at
the same time, employees will no longer be “on
call”.
The labor union (Sime Darby Salaried
Employees Association) opposed the revised
schedule. The union insists that the scrapping of
the 30-minute paid lunch break is a diminution of
benefits.
ISSUE: Whether or not the new memorandum
constitutes diminution of benefits.
HELD:
No. It is a valid exercise of management
prerogative. In the old schedule, the workers
were paid for eight hours and included in that is
the paid 30-minute lunch break. In the new
schedule, the workers are still paid for 8 hours, so
there’s really no diminution of benefit. It would
be unfair on the part of Sime Darby for the
workers to be paid still for their new 1 hour break
even though this time they are no longer “on
call”. If that would be the case, the workers will
be unjustly enriched.
In this case, it is the right of Sime Darby as
the employer to change the work schedules of
the workers so long as such prerogative is
MARIA ANNY G. YANONG
exercised in good faith for the advancement of
the employer’s interest and not for the purpose
of defeating or circumventing the rights of the
employees under special laws or under valid
agreements. Further, the new work schedule also
benefits the workers as they can now enjoy a
longer lunch break of 1 hour instead of the old
30-minute break and they can enjoy it without
being interrupted as they’re no longer on call. For
a full one-hour undisturbed lunch break, the
employees can freely and effectively use this
hour not only for eating but also for their rest and
comfort which are conducive to more efficiency
and better performance in their work.
NATIONAL DEVELOPMENT COMPANY VS.
COURT OF INDUSTRIAL RELATIONS AND
NATIONAL TEXTILE WORKERS UNION
G.R. NO. L-15422, NOVEMBER 30, 1962
FACTS:
At the National Development Co., a
government-owned and controlled corporation,
there were four shifts of work. One shift was
from 8 a.m. to 4 p.m., while the three other shifts
were from 6 a.m. to 2 p.m; then from 2 p.m. to
10 p.m. and, finally, from 10 p.m. to 6 a.m. In
each shift, there was a one-hour mealtime
period, to wit: From (1) 11 a.m. to 12 noon for
those working between 6 a.m. and 2 p.m. and
from (2) 7 p.m. to 8 p.m. for those working
between 2 p.m. and 10 p.m.
(Petitioner does not want to pay for the 1 hour
lunch time) The records disclose that although
there was a one-hour mealtime, petitioner
nevertheless credited the workers with eight
hours of work for each shift and paid them for
the same number of hours. However, since 1953,
whenever workers in one shift were required to
continue working until the next shift, petitioner
instead of crediting them with eight hours of
overtime work, has been paying them for six
hours only, petitioner that the two hours
corresponding to the mealtime periods should
not be included in computing compensation.
CIR: Mealtime should be counted in the
determination of overtime work
Page 9
 LABOR STANDARDS CASE DIGEST

ISSUE: WON mealtime breaks should be
considered working time
HELD:
YES The legal working day for any person
employed by another shall be of not more than
eight hours daily. When the work is not
continuous, the time during which the laborer is
not working and can leave his working place and
can rest completely shall not be counted. (Sec. 1,
Com. Act No. 444)
It will be noted that, under the law, the
idle time that an employee may spend for resting
and during which he may leave the spot or place
of work though not the premises of his employer,
is not counted as working time only where the
work is broken or is not continuous. In this case,
the CIR’s finding that work in the petitioner
company was continuous and did not permit
employees and laborers to rest completely is not
without basis in evidence and following our
earlier rulings, shall not disturb the same.
The time cards show that the work was
continuous and without interruption. There is
also the evidence adduced by the petitioner that
the pertinent employees can freely leave their
neither working place nor rest completely. There
is furthermore the aspect that during the period
covered the computation the work was on a 24-
hour basis and previously stated divided into
shifts. (ang labo bakit “can freely leave their
working place nor rest completely” feeling ko
typo yan sa scra or ganun talaga?) From these
facts, the CIR correctly concluded that work in
petitioner company was continuous and
therefore the mealtime breaks should be counted
as working time for purposes of overtime
compensation.
deducted the 4 hour period allotted for taking
their meals. These seamen seek the payment of
the meal period deducted by Luzon Stevedoring
in their compensation.
ISSUE: Whether or Not these seamen are entitled
for compensation on these 4 hour meal periods.
HELD:
Yes, they are entitled to be compensated
on the said meal period. Claimants
herein rendered services to the Company from
6:00 a.m. to 6:00 p.m. including Sundays and
holidays, which implies either that said laborers
were not given any recess at all, or that they were
not allowed to leave the spot of their working
place as this was an issue of facts, the Supreme
Court did not alter the decision of the Trial Judge.
The Supreme Court however explained this on
the issue of idle time or the 4 hour meal period in
this case: As We understand this term, a laborer
need not leave the premises of the factory, shop
or boat in order that his period of rest shall not
be counted, it being enough that he "cease to
work", may rest completely and leave or may
leave at his will the spot where he actually stays
while working, to go somewhere else, whether
within or outside the premises of said factory,
shop or boat. If these requisites are complied
with, the period of such rest shall not be counted.

LUZON STEVEDORING VS. LUZON MARINE

DEPARTMENT UNION
G.R. NO. L-9265, APRIL 29, 1957
FACTS:
The seamen working for Luzon
Stevedoring were asked to stay and work in their
tugboats or merely within its compound from
6:00 a.m. to 6:00 p.m or for 12 hours including
Sundays and holidays. Luzon stevedoring
however in its computation of overtime pay

MARIA ANNY G. YANONG Page 10