G.R. No.

151370           December 4, 2002 Loss of trust and confidence to be a valid ground for an employee’s dismissal must be based
ASIA PACIFIC CHARTERING (PHILS.) INC vs. FAROLAN on a willful breach and founded on clearly established facts. 26 A breach is willful if it is
done intentionally, knowingly and purposely, withoutjustifiable excuse, as distinguished from
Facts: an act done carelessly, thoughtlessly, heedlessly or inadvertently. 27
 Petitioner Asia Pacific was the general sales agent (GSA) of the Scandinavian
Airline System (SAS). As GSA, Asia Pacific sold passenger and cargo spaces for As did the Labor Arbiter and the Court of Appeals, this Court finds respondent’s explanation
airlines operated by SAS. Whereas, respondent Maria Linda Farolan was hired in in her Report behind the decline in sales revenues as due to market forces beyond
1992, as Sales Manager of Asia Pacific for its passenger and cargo operations for respondent’s control plausible. In any event, there is no showing that the decline is reflective
SAS, following her conformity to a letter-offer of employment from Asia Pacific of any willfull breach of duties by respondent.
through the Vice President Bondoc;
 Soon after Farolan assumed her post, she participated in a number of Furthermore, it bears noting that there is no showing that respondent represented herself as
meetings/seminars, including international meetings such as Customer Service possessed of the highest degree of skill and care known in the trade. And it is not disputed
Seminar in Bangok, all geared towards improving her marketing and sales skills; that respondent was approached by petitioner’s then Sales Manager Murray, and offered the
 Consequently, Farolan submitted a report on the comments and actions being taken position of Sales Manager. She thus could not just be unceremoniously discharged for "loss
concerning SAS’ poor performance, which shows that there was a drop in SAS’ of confidence" arising from alleged incompetency28.
sales revenues which to her was attributable to market forces beyond her control;
 Due to such decline, Asia Pacific directed its high ranking officer Roberto "While an employee may be dismissed because of inefficiency, neglect or carelessness, the
Zozobrado to investigate and identify the problem and implement possible law implies a situation or undertaking by an employee in entering into a contract of
solutions. Later, it was found out that Farolan did not adopt any sales strategy nor employment that he is competent to perform the work undertaken and is possessed of the
conduct any sales meeting or develop other sources of revenue for SAS, hence SAS requisite skill and knowledge to enable him to do so, and that he will do the work of the
was convinced that Farolan was not fit for the job of Sales Manager. employer in a careful manner. If he is not qualified to do the work which he undertakes, if he
 Thereafter, Farolan received three letters; third letter contains her termination on is incompetent, unskillful or inefficient, or if he executes his work in a negligent manner or is
the ground of loss of confidence. Thus, Farolan filed a complaint for illegal otherwise guilty of neglect of duty, he may lawfully be discharged before the expiration of his
dismissal against SAS, Bondoc, Zozobrado and one Donald Marshall, alleging that term of employment."29
Bondoc and Zozobrado had asked her to tender her resignation but that she refused
hence, the termination letter. Hence, Farolan was illegally dismissed.
 Labor Arbiter ruled that Farolan was illegally dismissed, ordered to pay her
separation pay and all other benefits. NLRC, on the other hand, reversed the Labor
Arbiter’s decision it recognizing that the right of SAS to terminate or dismiss
employees based on loss confidence is part of their management prerogative.
 Farolan’s Motion for Reconsideration was denied by NLRC. CA reversed the
NLRC decision and upheld the Labor Arbiter’s decision. Hence, this petition.

Issue: W/N the dismissal was valid considering the nature of Farolan’s job

Ruling: NO. This Court deems it imperative to discuss the nature of respondent’s job as sales
manager of petitioner. It is not disputed that her job description, and the terms and conditions
of her employment, with the exception of her salary and allowances, were never reduced to
writing.

Recent decisions of this Court distinguish the treatment of managerial employees from that of
rank and file personnel insofar as the application of the doctrine of loss of trust and
confidence is concerned. "Thus with respect to rank and file personnel, loss of trust and
confidence as ground for valid dismissal requires proof of involvement in the alleged events
in question and that mere uncorroborated assertions and accusations by the employer will not
be sufficient. But as regards a managerial employee, mere existence of a basis for believing
that such employee has breached the trust of his employer would suffice for his dismissal."

Even assuming, however, that respondent was a managerial employee, the stated ground (in
the letter of termination) for her dismissal, "loss of confidence," should have a basis and
determination thereof cannot be left entirely to the employer.
G.R. No. 121439. January 25, 2000 and other fringe benefits in behalf of private respondents was made only in April 1993, after a
AKLAN ELECTRIC COOPERATIVE INCORPORATED (AKELCO) vs. NLRC Board Resolution accepting them back to work out of compassion and humanitarian reason. It
took private respondents about ten months before they requested for the payment of their
Facts: backwages, and the long inaction of private respondents to file their claim for unpaid wages
 These are consolidated cases for non-payment of salaries and wages, 13 th month cast doubts as to the veracity of their claim.
pay, ECOLA and other benefits against AKELCO. Complainants alleged that prior
to the temporary transfer of the office of AKELCO from Lezo, Aklan to Kalibo The age-old rule governing the relation between labor and capital, or management and
Aklan, complainants were continuously performing their task and were duly paid of employee of a "fair days wage for a fair days labor" remains as the basic factor in determining
their salaries at the main office in Lezo. Consequently, by way of Board Resolution employees wages. If there is no work performed by the employee there can be no wage or pay
the temporary transfer to Kalibo was approved considering that the head office is unless, of course, the laborer was able, willing and ready to work but was illegally locked out,
closed and that it is dangerous to hold office thereat. Nevertheless, majority of the suspended or dismissed, or otherwise illegally prevented from working, a situation which we
employees continued to report for work in Lezo and were paid of their salaries. find is not present in the instant case. It would neither be fair nor just to allow private
 In February 1992, an unnumbered Board Resolution was passed withdrawing the respondents to recover something they have not earned and could not have earned because
temporary designation of office to Kalibo and that daily operations must be held they did not render services at the Kalibo office during the stated period.
again at Lezo. Complainants who were then reporting at Lezo office from January
1992 to May 1992 were duly paid their salaries while some remained at Kalibo.
However, from June 1992 to March 18 1993, complainants who continuously
reported for work at Lezo in compliance with the recent resolution were not paid
their salaries. Subsequently, in March 19 1993 up to present, complainants were
allowed to draw their salaries with the exception of few complainants who were not
paid for months of April to May 1993;
 AKELCO alleged that complainants voluntarily abandoned their respective job
assignments without any justifiable reason and notification; and that they defied the
lawful orders and other issuances by AKELCO and that such act by AKELCO was
legally justified under principle of No work No Pay;
 Labor Arbiter dismissed the complaints; NLRC reversed the decision and held that
private respondents are entitled to unpaid wages. Motion for Reconsideration by
AKELCO was denied. Hence, this petition.

Issue: W/N the private respondents are covered by the No Work No Pay Principle and thus
not entitled to the claim of unpaid wages.

Ruling: YES. We are accordingly constrained to overturn NLRC’s findings that AKELCO is
not justified in its refusal to pay private respondents wages and other fringe benefits from
June 16, 1992 to March 18, 1993; NLRC stated that private respondents were paid their
salaries from January to May 1992 and again from March 19, 1993 up to the present. As cited
earlier, AKELCO’s Board Resolution dated September 9, 1992 dismissed private respondents
who were on illegal strike and who refused to report for work at Kalibo office effective
January 31, 1992; since no services were rendered by private respondents they were not paid
their salaries. Private respondents never questioned nor controverted the Resolution
dismissing them and nowhere in their Comment is it stated that they questioned such
dismissal. Private respondents also have not rebutted AKELCO’s claim that private
respondents illegally collected fees and charges due AKELCO and appropriated the
collections among themselves to satisfy their salaries from January to May 1992, for which
reason, private respondents are merely claiming salaries only for the period from June 16,
1992 to March 1993.

Private respondents were dismissed by petitioner effective January 31, 1992 and were
accepted back by AKELCO, as an act of compassion, subject to the condition of "no work, no
pay" effective March 1993 which explains why private respondents were allowed to draw
their salaries again. Notably, the letter-request of Mr. Leyson for the payment of backwages
G.R. No. L-15422           November 30, 1962 From these facts, the CIR correctly concluded that work in NDC was continuous and
NATIONAL DEVELOPMENT COMPANY vs. CIR therefore the mealtime breaks should be counted as working time for purposes of overtime
compensation.
Facts:
 At the National Development Co., a government-owned and controlled corporation, Petitioner gives an eight-hour credit to its employees who work a single shift say from 6 a.m.
there were four shifts of work. One shift was from 8 a.m. to 4 p.m., while the three other to 2 p.m. Why cannot it credit them sixteen hours should they work in two shifts?
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 Note: A more recent definition of the jurisdiction of the CIR is found in Campos, et al. v.
those working between 2 p.m. and 10 p.m. Manila Railroad Co., et al., G.R. No. L-17905, May 25, 1962, in which We held that, for
 The records disclose that although there was a one-hour mealtime, NDC nevertheless such jurisdiction to come into play, the following requisites must be complied with: (a)
credited the workers with eight hours of work for each shift and paid them for the same there must exist between the parties an employer-employee relationship or the claimant
number of hours. However, since 1953, whenever workers in one shift were required to must seek his reinstatement; and (b) the controversy must relate to a case certified by
continue working until the next shift, NDC instead of crediting them with eight hours of the President to the CIR as one involving national interest, or must arise either under
overtime work, has been paying them for six hours only, NDC that the two hours the Eight-Hour Labor Law, or under the Minimum Wage Law.
corresponding to the mealtime periods should not be included in computing
compensation.
 On the other hand, respondent National Textile Workers Union whose members are
employed at the NDC, maintained the opposite view and asked the Court of Industrial
Relations to order the payment of additional overtime pay corresponding to the mealtime
periods.
 CIR issued an order that mealtime should be counted in the determination of overtime
work. NDC filed a motion for reconsideration, which was dismissed, on the ground that
NDC failed to furnish the union of its motion. Thereafter, NDC appealed to SC on the
grounds that the CIR has no jurisdiction over claims for overtime compensation and, that
the CIR did not make "a correct appraisal of the facts, in the light of the evidence" in
holding that mealtime periods should be included in overtime work because workers
could not leave their places of work and rest completely during those hours.

Issue: W/N the mealtime breaks should be considered working time

Ruling: YES. 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. Thus, the CIR found:

While it may be correct to say that it is well-high impossible for an employee to

work while he is eating, yet under Section 1 of Com. Act No. 444 such a time for
eating can be segregated or deducted from his work, if the same is continuous and
the employee can leave his working place rest completely. 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
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.
 G.R. No. 78210 February 28, 1989 Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary
TEOFILO ARICA, et al vs. NLRC practice of the employees, and the proceedings attendant thereto are not infected
with complexities as to deprive the workers the time to attend to other personal
Facts: pursuits. They are not new employees as to require the company to deliver long
 This case stemmed from a complaint filed on April 9, 1984 against private briefings regarding their respective work assignments. Their houses are situated
respondent Standard (Phil.) Fruits Corporation (STANFILCO) for assembly right on the area where the farm are located, such that after the roll call, which
time, moral damages and attorney's fees, does not necessarily require the personal presence, they can go back to their
 After submission of position papers, Labor Arbiter rendered its decision in houses to attend to some chores. In short, they are not subject to the absolute
control of the company during this period, otherwise, their failure to report in the
favor of Stanfilco holding that the pronouncement in that earlier case, i.e.
assembly time would justify the company to impose disciplinary measures. The
thirty-minute assembly time long practiced cannot be considered waiting time
CBA does not contain any provision to this effect; the record is also bare of any
or work time and, therefore, not compensable, has become the law of the case
proof on this point. This, therefore, demonstrates the indubitable fact that the thirty
which can no longer be disturbed without doing violence to the time- honored
(30)-minute assembly time was not primarily intended for the interests of the
principle of res-judicata.
employer, but ultimately for the employees to indicate their availability or non-
 NLRC upheld the decision. Petitioners’ motion for reconsideration was denied.
availability for work during every working day.
Hence, this petition.
Issue: W/N the NLRC committed grave abuse of discretion in its resolution
Petitioners contend that the preliminary activities as workers of respondents STANFILCO in
the assembly area is compensable as working time (from 5:30 to 6:00 o'clock in the morning)
Ruling: NO. The facts on which this decision was predicated continue to be the facts of the
since these preliminary activities are necessarily and primarily for private respondent's
case in this questioned resolution of the National Labor Relations Commission. It is clear that
benefit. These preliminary activities of the workers are as follows: 
herein petitioners are merely reiterating the very same claim which they filed through the
(a) First there is the roll call. This is followed by getting their individual work
ALU and which records show had already long been considered terminated and closed by this
assignments from the foreman.  Court in G.R. No. L-48510. Therefore, the NLRC can not be faulted for ruling that
(b) Thereafter, they are individually required to accomplish the Laborer's Daily petitioners' claim is already barred by res-judicata.
Accomplishment Report during which they are often made to explain about their
reported accomplishment the following day.  Be that as it may, petitioners' claim that there was a change in the factual scenario which are
(c) Then they go to the stockroom to get the working materials, tools and "substantial changes in the facts" makes respondent firm now liable for the same claim they
equipment. earlier filed against respondent which was dismissed. It is thus axiomatic that the non-
compensability of the claim having been earlier established, constitute the controlling legal
(d) Lastly, they travel to the field bringing with them their tools, equipment and
rule or decision between the parties and remains to be the law of the case making this petition
materials.  without merit. 
All these activities take 30 minutes to accomplish.
As aptly observed by the Solicitor General that this petition is "clearly violative of the
Contrary to this contention, respondent avers that the instant complaint is not new, the very familiar principle of res judicata. There will be no end to this controversy if the light of the
same claim having been brought against herein respondent by the same group of rank and Minister of Labor's decision dated May 12, 1979 that had long acquired the character of
file employees in the case of Associated Labor Union and Standard Fruit Corporation, NLRC finality and which already resolved that petitioners' thirty (30)-minute assembly time is not
Case No. 26-LS-XI-76 which was filed way back April 27, 1976 when ALU was the compensable, the same issue can be re-litigated again." 
bargaining agent of respondent's rank and file workers. The said case involved a claim for
"waiting time", as the complainants purportedly were required to assemble at a designated
area at least 30 minutes prior to the start of their scheduled working hours "to ascertain the
work force available for the day by means of a roll call, for the purpose of assignment or
reassignment of employees to such areas in the plantation where they are most needed."

Noteworthy is the decision of the Minister of Labor, in the aforecited case (Associated Labor
Union vs. Standard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-XI-76 where significant
findings of facts and conclusions had already been made on the matter.  The Minister of
Labor held: 
The thirty (30)-minute assembly time long practiced and institutionalized by mutual
consent of the parties under Article IV, Section 3, of the Collective Bargaining
Agreement cannot be considered as waiting time within the purview of Section 5,
Rule I, Book III of the Rules and Regulations Implementing the Labor Code. ...
G.R. No. L-4148             July 16, 1952 pretended that, for the employer to commit any violation of the Eight-Hour Labor Law, the
MANILA TERMINAL COMPANY, INC. vs. CIR participation or acquiescence of the employee or laborer is indispensable, because the latter in
view of his need and desire to live, cannot be considered as being on the same level with the
Facts: employer when it comes to the question of applying for and accepting an employment.
 In 1945, petitioner Manila Terminal Company (MTC) undertook the arrastre
service of some of the piers in Manila’s Port Area at the request and under the The point is stressed that the payment of the claim of the Association for overtime pay
control of the US Army. MTC hired some thirty men as watchmen on twelve- covering a period of almost two years may lead to the financial ruin of the petitioner, to the
hour shifts at a compensation of P3 per day for the day shift and P6 per day for detriment of its employees themselves. It is significant, however, that not all the petitioner's
the night shift; watchmen would receive back overtime pay for the whole period specified in the appealed
 In 1946, MTC began the postwar operation of the arrastre service at the decision, since the record shows that the great majority of the watchmen were admitted in
request and under the control of Bureau of Customs, by virtue of a contract 1946 and 1947, and even 1948 and 1949. At any rate, we are constrained to sustain the claim
entered into with the Philippine Government. In 1947, the watchmen of the of the Association as a matter of simple justice, consistent with the spirit and purpose of the
petitioner continued in the service with a number of substitutions and Eight-Hour Labor Law. The petitioner, in the first place, was required to comply with the law
additions, with a raise in the salary. Consequently, a member of the Manila and should therefore be made liable for the consequences of its violation.
Terminal Relief and Mutual Aid Association (MTRMAA) sent a letter to the
DOLE requesting that the matter of overtime pay be investigated but to no It is high time that all employers were warned that the public is interested in the strict
avail. Six employees and also members of MTRMAA filed a 5-point demand enforcement of the Eight-Hour Labor Law. This was designed not only to safeguard the
with the DOLE but to no avail again. Thereafter, MTC instituted the system health and welfare of the laborer or employee, but in a way to minimize unemployment by
of strict eight-hour shifts. Then, MTRMAA filed an amended petition (nag forcing employers, in cases where more than 8-hour operation is necessary, to utilize different
petition muna yung Manila Port Terminal Police Associaton bago sila kaya shifts of laborers or employees working only for eight hours each.
amended nalang) with CIR praying among others, that MTC be ordered to pay
its watchmen or police force overtime pay from the commencement of their Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being
employment; understood that the petitioner's watchmen will be entitled to extra compensation only
 In 1949, the entire police force of MTC was consolidated with Manila Harvor from the dates they respectively entered the service of the petitioner, hereafter to be duly
Police of the Customs Patrol Service, a govt agency under the control of determined by the Court of Industrial Relations. So ordered, without costs.
Commissioner of Customs and Secretary of Finance.
 CIR rendered its decision, while dismissing other demands of Association,
ordering MTC to pay its police force to pay overtime compensation – OT on Notes: The Association cannot be said to have impliedly waived the right to overtime compensation, for
regular days, compensation of Sundays and legal holidays; the obvious reason that they could not have expressly waived it."
 Both parties filed a motion for reconsideration, both were denied. Hence, this
petition on the ground, among others, that the agreement under which its The principle of estoppel and the laches cannot well be invoked against the Association. In the first
police force were paid specific wages for twelve-hour shifts, include overtime place, it would be contrary to the spirit of the Eight Hour Labor Law, under which as already seen, the
compensation. laborers cannot waive their right to extra compensation. In the second place, the law principally
obligates the employer to observe it, so much so that it punishes the employer for its violation and leaves
the employee or laborer free and blameless. In the third place, the employee or laborer is in such a
Issue: W/N the twelve-hour shift at specific wages include overtime compensation
disadvantageous position as to be naturally reluctant or even apprehensive in asserting any claim which
may cause the employer to devise a way for exercising his right to terminate the employment.
Ruling: NO. We note that after the petition had instituted the strict eight-hour shifts, no
reduction was made in the salaries, which its watchmen received under the twelve-hour If the principle of estoppel and laches is to be applied, it may bring about a situation, whereby the
arrangement. Indeed, as admitted by the petitioner, "when the members or the respondent employee or laborer, who cannot expressly renounce their right to extra compensation under the Eight-
union were placed on strict eight-hour shifts, the lowest salary of all the members of the Hour Labor Law, may be compelled to accomplish the same thing by mere silence or lapse of time,
respondent union was P165 a month, or P5.50 daily, for both day and night shifts." Although thereby frustrating the purpose of law by indirection.
it may be argued that the salary for the night shift was somewhat lessened, the fact that the
While counsel for the petitioner has cited authorities in support of the doctrine invoked, there are also
rate for the day shift was increased in a sense tends to militate against the contention that the
authorities pointed out in the opinion of Judge Lanting to the contrary. Suffice it to say, in this
salaries given during the twelve-hour shifts included overtime compensation. connection, that we are inclined to rule adversely against petitioner for the reasons already stated.

The Eight-Hour Law, in providing that "any agreement or contract between the employer and
the laborer or employee contrary to the provisions of this Act shall be null avoid ab initio,"
(Commonwealth Act No. 444, sec. 6), obviously intended said provision for the benefit of the
laborers or employees. The employer cannot, therefore, invoke any violation of the act to
exempt him from liability for extra compensation. This conclusion is further supported by the
fact that the law makes only the employer criminally liable for any violation. It cannot be
G.R. No. L-12444             February 28, 1963 and duties, regardless of "the stress and strain concomitant of a bad weather, unmindful of the
STATES MARINE CORPORATION vs. CEBU SEAMEN'S ASSOCIATION dangers that lurk ahead in the midst of the high seas."

Petitioners States Marine Corporation and Royal Line, Inc. were engaged in the business of Petitioners maintain that, in view of Sec 3, par. f of the Minimum Wage Law, that in fixing
marine coastwise transportation, employing therein several steamships of Philippine registry. the minimum wage of employees, Congress took into account the meals furnished by
They had a CBA with the respondent Cebu Seamen's Association, Inc. employers and that in fixing the rate of forty centavos per meal, the lawmakers had in mind
that the latter amount should be deducted from the daily wage, otherwise, no rate for meals
On September 12, 1952, the respondent union filed with the CIR, a petition against the States should have been provided.
Marine Corporation and Royal Line, Inc. They alleged that the officers and men working on
board the petitioners' vessels have not been paid their sick leave, vacation leave and overtime However, section 19, same law, states, …”Nothing in this Act shall…justify an employer in
pay; that the petitioners threatened or coerced them to accept a reduction of salaries, observed violating any other labor law applicable to his employees, in reducing the wage now paid to
by other shipowners; that after the Minimum Wage Law had taken effect, the petitioners any of his employees in excess of the minimum wage established under this Act, or in
required their employees on board their vessels, to pay the sum of P.40 for every meal, while reducing supplements furnished on the date of enactment.
the masters and officers were not required to pay their meals, and that because Captain Carlos
Asensi had refused to yield to the general reduction of salaries, the petitioners dismissed said A careful examination of the provisions shows that, Section 3(f) constitutes the general rule,
captain who now claims for reinstatement and the payment of back wages. while section 19 is the exception. In other words, if there are no supplements given, within
the meaning and contemplation of section 19, but merely facilities, section 3(f) governs.
The petitioners averred among others that only less than 30 of the men and officers in their There is no conflict…and even if there is such a conflict, it should resolve the same in favor
employ were members of the union; that the work on board a vessel is one of comparative of the safety and decent living laborers.
ease; that petitioners have suffered financial losses in the operation of their vessels and that
there is no law which provides for the payment of sick leave or vacation leave to employees The benefit or privilege given to the employee which constitutes an extra remuneration above
or workers of private firms; that as regards the claim for overtime pay, the petitioners have and over his basic or ordinary earning or wage, is supplement; and when said benefit or
always observed the provisions of Comm. Act No. 444, notwithstanding the fact that it does privilege is part of the laborers' basic wages, it is a facility. The criterion is not so much with
not apply to those who provide means of transportation; that the shipowners and operators in the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its purpose.
Cebu were paying the salaries of their officers and men, depending upon the margin of profits Considering, therefore, as definitely found by the respondent court that the meals were freely
they could realize and other factors or circumstances of the business; that in enacting the given to crew members prior to August 4, 1951, while they were on the high seas "not as part
Minimum Wage Law, the Congress had in mind that the amount of P.40 per meal, should be of their wages but as a necessary matter in the maintenance of the health and efficiency of the
deducted from the daily wages; that Captain Asensi was not dismissed for alleged union crew personnel during the voyage", the deductions therein made for the meals given after the
activities, but with the expiration of the terms of the contract between said officer and the effectivity of the MW Law, should be returned to them, and the operator of the coastwise
petitioners, his services were terminated. vessels affected should continue giving the same benefit..

Issue: Is it correct to deduct the cost of meals from the wages or salaries received by the If We are to follow the theory of the petitioners that the furnishing of meals was already taken
workers in pursuance with the Minimum Wage Law? into consideration by Congress, when it stated that "wage" includes the fair and reasonable
value of boards customarily furnished by the employer to the employees then a crew member,
Ruling: It was shown by substantial evidence, that since the beginning of the operation of the who used to receive a monthly wage of P100.00, before August 4, 1951 (effectivity of MW
petitioner's business, all the crew of their vessels have been signing "shipping articles" in Law), with no deduction for meals, after said date, would receive only P86.00 monthly (after
which are stated opposite their names, the salaries or wages they would receive - All seamen, deducting the cost of his meals), which would be very much less than the P122.00 minimum
whether members of the crew or deck officers or engineers, have been furnished free meals wage, fixed in accordance with the Minimum Wage Law. Instead of benefiting him, the law
by the ship owners or operators. It is, apparent from the shipping articles that, aside from the will adversely affect said crew member. Such interpretation does not conform with the
payment of the respective salaries or wages, set opposite the names of the crew members, the avowed intention of Congress in enacting the said law.
petitioners bound themselves to supply the crew with ship's provisions, daily subsistence or
daily rations, which include food. IN VIEW HEREOF, the petition is dismissed, with costs against the petitioners.

After the Minimum Wage Law became effective, the companies began deducting the cost of
meals from the wages or salaries of crew members; but no such deductions were made from
the salaries of the deck officers and engineers in all the boats of the petitioners. Under the
existing laws, therefore, the query converges on the legality of such deductions.

We hold that such deductions are not authorized. In the coastwise business of transportation
of passengers and freight, the men who compose the complement of a vessel are provided
with free meals by the shipowners, operators or agents, because they hold on to their work
[G.R. No. 100388. December 14, 2000] In contrast to Ayaldes evidence, or lack thereof, is Margarita Tanas positive testimony,
SSS v CA corroborated by two (2) other witnesses, on the matter of wages.
In a petition before the Social Security Commission, Margarita Tana, widow of the late These witnesses did not waver in their assertion that while Tana was hired by Ayalde as
Ignacio Tana, Sr., alleged that her husband was an employee of Conchita Ayalde as a an arador on pakyaw basis, he was also paid a daily wage which Ayaldes overseer disbursed
farmhand in the two sugarcane plantations. She further alleged that Tana worked every fifteen (15) days. It is also undisputed that they were made to acknowledge receipt of
continuously six days a week, four weeks a month, and for twelve months every year between their wages by signing on sheets of ruled paper, which are different from those presented by
January 1961 to April 1979. For his labor, Tana allegedly received a regular salary according Ayalde as documentary evidence. In fine, we find that the testimonies of Margarita Tana, and
to the minimum wage prevailing at the time. She further alleged that throughout the given her witnesses prevail over the incomplete and inconsistent documentary evidence of Ayalde.
period, social security contributions, as well as medicare and employees compensation
premiums were deducted from Tanas wages. It was only after his death that Margarita As the Court held in one case, No particular form of evidence is required to prove the
discovered that Tana was never reported for coverage, nor were his contributions/premiums existence of an employer-employee relationship. Any competent and relevant evidence to
remitted to the SSS. She prayed that the Commission issue an order directing respondent to prove the relationship may be admitted.
pay such contributions and the SSS to grant the funeral and pension benefits due her and It is indubitable, therefore, that Tana worked continuously for Ayalde, not only
which she was deprived of.[1] as arador on pakyaw basis, but as a regular farmhand, doing backbreaking jobs for Ayaldes
The SSS, revealed that Ignacio Tana, Sr. was never registered as a member-employee business. There is no shred of evidence to show that Tana was only a seasonal worker, much
and there was no way of verifying whether the alleged premium contributions were remitted less a migrant worker. All witnesses, including Ayalde herself, testified that Tana and his
since the respondent was not registered members-employers.  family resided in the plantation.  The only logical explanation is that he was working for most
part of the year exclusively for Ayalde, in return for which the latter gratuitously allowed
Respondent Ayalde belied the allegation that Ignacio Tana, Sr. was her employee, but was Tana and his family to reside in her property.
hired as an independent contractor to plow, harrow, or burrow on the land mentioned. She
further alleged that she never exercised control over the manner by which Tana performed his Ayalde made much ado of her claim that Tana could not be her employee because she
work as an independent contractor.  exercised no control over his work hours and method of performing his task as arador. A
closer scrutiny of the records, however, reveals that while Ayalde herself may not have
Social Security Commission issued a Resolution rendering respondent liable for the directly imposed on Tana the manner and methods to follow in performing his tasks, she did
payment of damages equivalent to the death benefits as the deceased was her employee. exercise control through her overseer.
Further, the SSS is ordered to pay to the petitioner her accrued pension covering the period
after the 5-year guaranteed period corresponding to the employers liability. The CA reversed It is not essential for the employer to actually supervise the performance of duties of the
the Commission’s findings employee; it is sufficient that the former has a right to wield the power. Ayalde, on her own
or through her overseer, wielded the power to hire or dismiss, to check on the work, be it in
Issue: The pivotal issue to be resolved in this petition is whether or not an agricultural laborer progress or quality, of the laborers she therefore posessed the power to control everyone
who was hired on pakyaw basis can be considered an employee entitled to compulsory working therein and everything taking place therein.
coverage and corresponding benefits under the Social Security Law.
The Court of Appeals also erred when it ruled, on the alternative, that if ever Tana was
Ruling: The mandatory coverage under the SSS Law is premised on the existence of an an employee, he was still ineligible for compulsory coverage because he was not paid any
employer-employee relationship, and Section 8(d) defines an employee as any person who regular daily wage and he did not work for an uninterrupted period of at least six months in a
performs services for an employer in which either or both mental and physical efforts are year in accordance with Section 8(j) (I) of the Social Security Law. There is substantial
used and who receives compensation for such services where there is an employer-employee testimonial evidence to prove that Tana was paid a daily wage, and he worked continuously
relationship. The essential elements of an employer-employee relationship are: (a) the for most part of the year, even while he was also occasionally called on to plow the soil on
selection; (b) the payment of wages; (c) the power of dismissal; and (d) the power of control a pakyaw basis. As a farm laborer who has worked exclusively for Ayalde for eighteen (18)
of the employer with regard to the means and methods by which the work is to be years, Tana should be entitled to compulsory coverage under the Social Security Law,
accomplished, with the power of control being the most determinative factor. [12] whether his service was continuous or broken.
There is no question that Tana was selected and his services engaged by either Ayalde Ayalde failed to counter these positive assertions. Even on the assumption that there
herself, or her overseer. Corollarily, they also held the prerogative of dismissing or were no deductions, the fact remains that Tana was and should have been covered under the
terminating Tanas employment. The dispute is in the question of payment of wages. Claimant Social Security Law. The circumstances of his employment place him outside the ambit of
Margarita Tana and her corroborating witnesses testified that her husband was paid daily the exception provided in Section 8(j) of Republic Act No. 1611, as amended by Section 4 of
wages per quincena as well as on pakyaw basis and offered incomplete payrolls. While the R.A. 2658.
names of the supposed laborers appear therein, their signatures are nowhere to be found and
such do not cover the 18-year period during which Tana was supposed to have worked. These WHEREFORE, Decision of the Court of Appeals is hereby REVERSED and SET
documents are not only sadly lacking, they are also unworthy of credence.  ASIDE. The Resolution of the Social Security Commission is REINSTATED. SO
ORDERED.
G.R. No. L-21348             June 30, 1966 Issue: Are the workers in Group B entitled for an increase in differential payments?
RED V COCONUT PRODUCTS v CIR
(Discussion on CIR jurisdiction) The petition for shift differential in the present case, it is
Red V Coconut Products, Ltd. is a corporation which runs a desiccated coconut factory and true, did not expressly mention the Eight-Hour Labor Law. Nonetheless, it clearly asserted
has several hundred workers. About 800 of said workers are members of Tanglaw ng that:
Paggawa labor union. Said union entered into a CBA with Petitioner Corp in 1958.
Subsequently, however, in 1961, the same parties entered into another CBA, to expire on (1) Petitioners-laborers "are working in the Red V Coconut Products, Ltd." and
October 31, 1965. (2) They "work in two shifts consisting of approximately 12 hours each shift."

In the factory, there are two groups of workers: GROUP A which has 3-shifts and GROUP B Accordingly, from the said allegations, it is proper to regard the petition, as the Court of
which has 2. As observed, differentials were paid to workers, under the 1958 and 1961 CBAs, Industrial Relations did, as one for overtime pay by workers still employed by the company.
thus: Hours of Work Differentials As such it falls within the jurisdiction of the CIR. For the same is in effect an assertion not of
Group A — 1st shift 4 A.M. — 12 Noon (8 Hrs.) None
a simple money claim but, of a claim for overtime pay by workers who are employees of the
company.3
2nd shift 12 Noon — 8 P.M. (8 Hrs.) .35

3rd shift 8 P.M. — 4 A.M. (8 Hrs.) .55 During the trial, as stated, evidence was adduced to the effect that the aforesaid petitioners-
Group B — 1st shift 4 A.M. — 4 P.M. (12 Hrs.) None workers were engaged on a piece-work basis. The same, however, does not appear from the
petition or complaint filed with the respondent court. It therefore cannot affect its jurisdiction
2nd shift 4 P.M. — 4 A.M. (12 Hrs.) .55
over the case, which was already acquired. For jurisdiction, once acquired, continues until
final adjudication of the litigation.4

(Eto talaga yung discussion) Furthermore, although the Eight-Hour Labor Law provides that
On January 17, 1962, Tanglaw ng Paggawa and some members who belong to Group B, filed
it does not cover those workers who prefer to be paid on piece-work basis, nothing in said law
a petition with the Court of Industrial Relations and therein alleged that the petitioners-
precludes an agreement for the payment of overtime compensation to piece-workers. And in
workers are shellers, parers, counters and haulers in the two shifts (Group B) consisting of 12
agreeing to the provision for payment of shift differentials to the petitioners-workers
hours each shift, that although said workers perform work of 12 hours, they receive only P.55
aforementioned, in the CBA, as well as in actually paying to them said differentials, though
differential pay for the corresponding hours of night work; that their nightwork is equivalent
not in full, the company in effect freely adhered to an application and implementation of the
to the nightwork of the 2nd and 3rd shifts of Group A combined, so they should be paid
Eight-Hour Labor Law, or its objectives, to said workers.
accordingly, that, therefore, they are entitled to payment of P.35 more as differential pay,
since up to the time of the petition, they received only P.55 per night as differential pay.
It should be observed that while the provision in the bargaining agreements speaks of shift
differentials for the "second shift" and the "third shift" and Group B has no third shift, said
Respondent company therein filed a motion to dismiss, stating that the CIR has no
Group B has a second shift, which performs work equivalent to that of the corresponding
jurisdiction over the case for the reason that the claim asserted in the petition is a simple
shifts of Group A. It follows that respondent court did not err in ordering the company to pay
money claim and that an interpretation of a contract - CBA is involved, which pertains to the
the full and equivalent amount of said differentials (P.90) corresponding, under the
regular courts.
bargaining agreements, to the workers who performed 12 hours of work, from 4 P.M. to 4
A.M.
The CIR denied said motion and ruled that the claim is for unpaid overtime pay of
laborers still employed by the company.
And, finally, the laborers in question are not strictly under the full concept of piece-workers
as contemplated by law for the reason that their hours of work — that is, 12 hours per shift —
The CIR, rendered its decision on the petition for differential pay. It found therein that the are fixed by the employer. As ruled by this Court another case, the philosophy underlying the
petitioners-workers are engaged on pakiao or piece-work basis, and, therefore, are not exclusion of piece workers from the Eight-Hour Labor Law is that said workers are paid
entitled to overtime pay under the Eight-Hour Labor Law; that their petition for night shift depending upon the work they do "irrespective of the amount of time employed" in doing said
differentials based on the collective bargaining agreements is meritorious because the work. Such freedom as to hours of work does not obtain in the case of the laborers herein
company having paid night differentials indiscriminately to the night shift workers of Group involved, since they are assigned by the employer to work in two shifts for 12 hours each
A and Group B alike, the payments should be uniform and equal for the night shifts of both shift. Thus it cannot be said that for all purposes these workers fall outside the law requiring
groups, that is, P.90. It therefore ordered payment of the deficiency in said differentials to the payment of compensation for work done in excess of eight hours.
workers of Group B.
Wherefore, the decision of the CIR is affirmed. So ordered.
[G.R. No. 132805. February 2, 1999]
PAL v NLRC
Articles 83 and 85 of the Labor Code read:

Private respondent was employed as flight surgeon at petitioner company. He was assigned at Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed
the PAL Medical Clinic and was on duty from 4:00 in the afternoon until 12:00 midnight. eight (8) hours a day…

On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic to have Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it
his dinner. A few minutes later, the clinic received an emergency call that one of PAL’s shall be the duty of every employer to give his employees not less than sixty (60) minutes
employees had suffered a heart attack. The nurse on duty called private respondent at his time-off for their regular meals…
home to inform him of the emergency, but when respondent reached the clinic only a minute
after the patient reportedly arrived in the same place, the nurse on duty had already left with
the patient for the hospital and the following day, said patient died. Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further
states:
Upon investigation, the Chief Flight Surgeon required private respondent to explain why no
disciplinary sanction should be taken against him. Sec. 7. Meal and Rest Periods. Every employer shall give his employees, regardless of sex,
Private respondent then asserted that he was entitled to a thirty-minute meal break; that he not less than one (1) hour time-off for regular meals, except in the following cases when a
immediately left his residence upon being informed about the emergency and he arrived at the meal period of not less than twenty (20) minutes may be given by the employer provided that
clinic a few minutes later; and that the nurse panicked and brought the patient to the hospital such shorter meal period is credited as compensable hours worked of the employ;
without waiting for him.
(a) Where the work is non-manual work in nature or does not involve strenuous
The explanation was unacceptable by the management which charged private respondent with physical exertion;
abandonment of post while on duty. Private respondent reiterated the assertions in his
previous explanation. However, petitioner company decided to suspend private respondent (b) Where the establishment regularly operates not less than sixteen hours a day;
for three months. (c) In cases of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss which
Private respondent filed a complaint for illegal suspension against petitioner. the employer would otherwise suffer; and
The Labor Arbiter rendered a decision declaring the suspension illegal and ordered petitioner (d) Where the work is necessary to prevent serious loss of perishable goods.
to pay private respondent the amount equivalent to all the benefits he should have received Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be
during his period of suspension plus P500,000.00 moral damages. NLRC affirmed said considered as compensable working time.
decision.
Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it
Issue: Was there abandonment of post? be inferred that employees must take their meals within the company premises.  Employees
are not prohibited from going out of the premises as long as they return to their posts on
time. Private respondents act, therefore, of going home to take his dinner does not constitute
We find that public respondents did not err in nullifying the three-month suspension of abandonment.
private respondent. They, however, erred in awarding moral damages to private respondent.
(discussion on awarding moral damages) Not every employee who is illegally dismissed or
The facts do not support petitioners allegation that private respondent abandoned his suspended is entitled to damages. As a rule, moral damages are recoverable only where the
post. Private respondent left the clinic that night only to have his dinner at his house, which dismissal or suspension of the employee was attended by bad faith or fraud, or constituted an
was only a few minutes drive away from the clinic. His whereabouts were known to the nurse act oppressive to labor…hence, there is no showing that the management of petitioner
on duty so that he could be easily reached in case of emergency. Upon being informed, company was moved by some evil motive in suspending private respondent. It suspended
private respondent immediately returned to the clinic. These facts belie petitioners claim of private respondent on an honest, albeit erroneous, belief that private respondents act
abandonment. constituted abandonment of post. Also, it is evident from the facts that petitioner gave private
respondent all the opportunity to refute the charge against him and to defend himself. 
Petitioner argues that being a full-time employee, private respondent is obliged to stay in the
company premises for not less than eight (8) hours. Hence, he may not leave the company IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. Award of moral
premises during such time, even to take his meals. damages to private respondent is DELETED. SO ORDERED.
[G.R. No. 156367. May 16, 2005] The definition of field personnel is not merely concerned with the location where the
AUTO BUS V BAUTISTA employee regularly performs his duties but also with the fact that the employee’s
performance is unsupervised by the employer.
Since 24 May 1995, respondent Bautista has been employed by petitioner Autobus, as driver-
conductor with travel routes Manila-Tuguegarao via Baguio vice versa. Respondent was paid As observed by the Labor Arbiter and concurred in by the Court of Appeals:
on commission basis, seven percent (7%) of the total gross income per travel, on a twice a …there are its inspectors assigned at strategic places who board the bus and inspect the
month basis. passengers, the punched tickets, and the conductors reports… In each and every depot, there
is always the Dispatcher whose function is precisely to see to it that the bus and its crew
On 03 January 2000, respondent met an accident, bumping unto another Autobus vehicle. He leave the premises at specific times and arrive at the estimated proper time…
averred that the cause of accident was due to the management’s ordering him to go back to
Isabela, although he had not slept for almost 24 hours, as he had just arrived in Manila. As correctly concluded by the appellate court, respondent is not a field personnel but a
Respondent further alleged that he was not allowed to work until he fully paid the amount of regular employee who performs tasks usually necessary and desirable to the usual trade of
P75,551.50, representing thirty percent of the cost of repair of the buses and that despite petitioners business. Accordingly, respondent is entitled to the grant of service incentive
respondents pleas for reconsideration, the same was ignored by management. After a month, leave.
management sent him a letter of termination.
DISCUSSION ON PRESCRIPTIVE PERIOD UNDER ART 291 LABOR CODE:
Thus, respondent instituted a Complaint for Illegal Dismissal with Money Claims for
nonpayment of 13th month pay and service incentive leave pay against Autobus. Article 291 of the Labor Code states that all money claims arising from employer-employee
relationship shall be filed within three (3) years from the time the cause of action accrued;
Petitioner, maintained that respondents employment was replete with offenses and presented otherwise, they shall be forever barred. The three (3)-year prescriptive period commences,
evidences pertaining to several incidents wherein respondent was involved. Furthermore, not at the end of the year when the employee becomes entitled to the commutation of his
petitioner avers that respondent’s employment was terminated only after the latter was service incentive leave, but from the time when the employer refuses to pay its monetary
provided with an opportunity to explain his side. equivalent after demand of commutation or upon termination of the employees services, as
the case may be.
Labor Arbiter ruled to dismiss the complaint for Illegal Dismissal, but ordered to pay
Respondent’s 13th month pay from the date of his hiring to the date of his dismissal, and his In the case at bar, the prescriptive period with respect to his claim for service incentive leave
service incentive leave pay. Upon appeal, NLRC which rendered its decision deleting the pay only commenced from the time the employer failed to compensate his accumulated
award of 13th month pay, for Respondent was not covered by such being paid on a service incentive leave pay at the time of his dismissal. Since respondent had filed his money
commission basis, but all other findings were affirmed. The CA maintained the decision of claim after only one month from the time of his dismissal, necessarily, his money claim was
NLRC. The award of service incentive leave pay was maintained. filed within the prescriptive period.

ISSUES: Whether or not respondent is entitled to service incentive leave; WHEREFORE, petition is hereby DENIED. Decision of the CA is affirmed. SO
ORDERED.
RULING OF THE COURT: Article 95 of the Labor Code provides that…“Every employee
who has rendered at least one year of service shall be entitled to a yearly service incentive
leave of five days with pay.” Thus according to the Implementing Rules, Service Incentive
Leave shall not apply to employees classified as field personnel.

Employees engaged on task or contract basis or paid on purely commission basis are not
automatically exempted from the grant of service incentive leave, unless, they fall under the
classification of field personnel. Therefore, petitioners contention that respondent is not
entitled to the grant of service incentive leave just because he was paid on purely commission
basis is misplaced. What must be ascertained in order to resolve the issue of propriety of
the grant of service incentive leave to respondent is whether or not he is a field
personnel.

According to Article 82 of the Labor Code, field personnel shall refer to non-agricultural
employees who regularly perform their duties away from the principal place of business or
branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.