G.R. No. 101761.

 March 24, 1993.*

NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.
Labor Law; Constitutional Law; While social justice has an inclination to give favor and protection to the working class, the
cause of the labor sector is not upheld at all times as the management has also a right entitled to respect and enforcement in the
interest of simple fair play.—While the Constitution is committed to the policy of social justice and the protection of the working
class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own
rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less
privileges in life, this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the
employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the
light of the established facts and the applicable law and doctrine.
Same; Classification of Employment; Criterion which determines whether a particular employee is within the definition of a
statute is the character of work performed rather than title or nomenclature of position held.—The question whether a given employee
is exempt from the benefits of the law is a factual one dependent on the circumstances of the particular case. In determining whether
an employee is within the terms of the statutes, the criterion is the character of the work performed, rather than the title of the
employee's position. Consequently, while generally this Court is not supposed to review the factual findings of respondent
commission, substantial justice and the peculiar circumstances obtaining herein mandate a deviation from the rule.
Same; Same; Same; Overtime pay, etc.; Supervisory employees discharging functions that qualify them as officers or members
of the managerial staff considered exempt from the coverage of Article 82 of the Labor Code and therefore, not entitled to overtime,
rest day and holiday pay—The members of respondent union discharge duties and responsibilities which ineluctably qualify them as
officers or members of the 
______________
*
 SECOND DIVISION.
453
VOL. 220, MARCH 24, 1993  453 
National Sugar Refineries Corporation vs. NLRC
managerial staff, as defined in Section 2, Rule I, Book III of the aforestated Rules to Implement the Labor Code, viz.: x x x
Under the facts obtaining in this case, we are constrained to agree with petitioner that the union members should be considered as
officers or members of the managerial staff and are, therefore, exempt from the coverage of Article 82. Perforce, they are not entitled
to overtime, rest day and holiday pay.
Same; Same; Same; Same; Payment of the questioned benefits has not ripened into a contractual obligation as payment thereof
was made at a time when they were rightfully entitled thereto.—We likewise do not subscribe to the finding of the labor arbiter that the
payment of the questioned benefits to the union members has ripened into a contractual obligation. x x x The members of respondent
union were paid the questioned benefits for the reason that, at that time, they were rightfully entitled thereto. Prior to the JE Program,
they could not be categorically classified as members or officers of the managerial staff considering that they were then treated merely
on the same level as rank-and-file. Consequently, the payment thereof could not be construed as constitutive of voluntary employer
practice, which cannot now be unilaterally withdrawn by petitioner.
Same; Same; Same; Same; Same; Entitlement to benefits provided for by law requires prior compliance with conditions set
forth therein.—Quintessentially, with the promotion of the union members, they are no longer entitled to the benefits which attach and
pertain exclusively to their former 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 meet
the requirements imposed by law. Their assumption of these positions removed them from the coverage of the law, ergo, their
exemption therefrom.
Same; Management Prerogatives; Promotion of employees is a recognized management prerogative to be exercised in good
faith; Case at bar.—Promotion of its employees is one of the jurisprudentiallyrecognized 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 in bad faith in 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.
PETITION for certiorari of the decision of the National Labor 
454
454  SUPREME COURT REPORTS ANNOTATED 
National Sugar Refineries Corporation vs. NLRC
Relations Commission.
The facts are stated in the opinion of the Court.
     Jose Mario C. Bunag for petitioner.
     The Solicitor General and the Chief Legal Officer, NLRC, for public respondent.
     Zoilo V. de la Cruz for private respondent.

1
REGALADO, J p:

The main issue presented for resolution in this original petition for certiorari is whether supervisory employees, as defined in Article
212 (m), Book V of the Labor Code, should be considered as officers or members of the managerial staff under Article 82, Book III of
the same Code, and hence are not entitled to overtime rest day and holiday pay.

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. The Batangas refinery was privatized on
April 11, 1992 pursuant to Proclamation No. 50. 1 Private respondent union represents the former supervisors of the NASUREFCO
Batangas Sugar Refinery, namely, the Technical Assistant to the Refinery Operations Manager, Shift Sugar Warehouse Supervisor,
Senior Financial/Budget Analyst, General Accountant, Cost Accountant, Sugar Accountant, Junior Financial/Budget Analyst, Shift
Boiler Supervisor,, Shift Operations Chemist, Shift Electrical Supervisor, General Services Supervisor, Instrumentation Supervisor,
Community Development Officer, Employment and Training Supervisor, Assistant Safety and Security Officer, Head and Personnel
Services, Head Nurse, Property Warehouse Supervisor, Head of Inventory Control Section, Shift Process Supervisor, Day
Maintenance Supervisor and Motorpool Supervisor.

On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department
heads. The JE Program was designed to rationalized the duties and functions of all positions, reestablish levels of responsibility, and
recognize both wage and operational structures. Jobs were ranked according to effort, responsibility, training and working conditions
and relative worth of the job. As a result, all positions were re-evaluated, and all employees including the members of respondent
union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions.

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, the following adjustments were
made: (1) the 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; (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE
Program, with the union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the highest paid rank-
and-file employee; (3) longevity pay was increased on top of alignment adjustments; (4) they were entitled to increased company
COLA of P225.00 per month; (5) there was a grant of P100.00 allowance for rest day/holiday work.

On May 11, 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.

Two years after the implementation of the JE Program, specifically on June 20, 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.

On January 7, 1991, Executive Labor Arbiter Antonio C. Pido rendered a decision 2 disposing as follows:

"WHEREFORE, premises considered, respondent National Sugar refineries Corporation is hereby directed to —

1. pay the individual members of complainant union the usual overtime pay, rest day pay and holiday pay enjoyed by them instead of
the P100.00 special allowance which was implemented on June 11, 1988; and

2. pay the individual members of complainant union the difference in money value between the P100.00 special allowance and the
overtime pay, rest day pay and holiday pay that they ought to have received from June 1, 1988.

All other claims are hereby dismissed for lack of merit.

SO ORDERED."

In finding for the members therein respondent union, the labor ruled that the along span of time during which the benefits were being
paid to the supervisors has accused the payment thereof to ripen into contractual obligation; at the complainants cannot be estopped
from questioning the validity of the new compensation package despite the fact that they have been receiving the benefits therefrom,
considering that respondent union was formed only a year after the implementation of the Job Evaluation Program, hence there was no
way for the individual supervisors to express their collective response thereto prior to the formation of the union; and the comparative
2
computations presented by the private respondent union showed that the P100.00 special allowance given NASUREFCO fell short of
what the supervisors ought to receive had the overtime pay rest day pay and holiday pay not been discontinued, which arrangement,
therefore, amounted to a diminution of benefits.

On appeal, in a decision promulgated on July 19, 1991 by its Third Division, 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,
as defined under Article 212 (m) of the Labor Code and, therefore, they are entitled to overtime, rest day and holiday pay. Respondent
NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the evaluation, review and
final action by their department heads; their responsibilities do not require the exercise of discretion and independent judgment; they
do not participate in the formulation of management policies nor in the hiring or firing of employees; and their main function is to
carry out the ready policies and plans of the corporation. 3 Reconsideration of said decision was denied in a resolution of public
respondent dated August 30, 1991. 4 

Hence this petition for certiorari, with petitioner NASUREFCO asseverating that public respondent commission committed a grave
abuse of discretion in refusing to recognized the fact that the members of respondent union are members of the managerial staff who
are not entitled to overtime, rest day and holiday pay; and in making petitioner assume the "double burden" of giving the benefits due
to rank-and-file employees together with those due to supervisors under the JE Program.

We find creditable merit in the petition and that the extraordinary writ of certiorari shall accordingly issue.

The primordial issue to be resolved herein is whether the members of respondent union are entitled to overtime, rest day and holiday
pay. Before this can be resolved, however it must of necessity be ascertained first whether or not the union members, as supervisory
employees, are to be considered as officers or members of the managerial staff who are exempt from the coverage of Article 82 of the
Labor Code.

It is not disputed that the members of respondent union are supervisory employees, as defined employees, as defined under Article
212(m), Book V of the Labor Code on Labor Relations, which reads:

"(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory employees are those who, in the interest
of the employer effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment. All employees not falling within any of those above definitions are considered
rank-and-file employees of this Book."

Respondent NLRC, in holding that the union members are entitled to overtime, rest day and holiday pay, and in ruling that the latter
are not managerial employees, adopted the definition stated in the aforequoted statutory provision.

Petitioner, however, avers that for purposes of determining whether or not the members of respondent union are entitled to overtime,
rest day and holiday pay, said employees should be considered as "officers or members of the managerial staff" as defined under
Article 82, Book III of the Labor Code on "Working Conditions and Rest Periods" and amplified in Section 2, Rule I, Book III of the
Rules to Implement the Labor Code, to wit:

"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.)

xxx xxx xxx

'Sec. 2. Exemption. — The provisions of this rule shall not apply to the following persons if they qualify for exemption under the
condition set forth herein:

xxx xxx xxx

3
(b) Managerial employees, if they meet all of the following conditions, namely:

(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision
thereof:

(2) They customarily and regularly direct the work of two or more employees therein:

(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring
and firing and as to the promotion or any other change of status of other employees are given particular weight.

(c) Officers or members of a managerial staff if they perform the following duties and responsibilities:

(1) The primary duty consists of the performance of work directly related to management policies of their employer;

(2) Customarily and regularly exercise discretion and independent judgment;

(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or
technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and
tasks; and

(4) Who do not devote more 20 percent of their hours worked in a work-week to activities which are not directly and closely related to
the performance of the work described in paragraphs (1), (2), and above."

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 and supervisory employees under Article 212 (m) should be made to apply only to the
provisions on Labor Relations, while the right of said employees to the questioned benefits should be considered in the light of the
meaning of a managerial employee and of the officers or members of the managerial staff, as contemplated under Article 82 of the
Code and Section 2, Rule I Book III of the implementing rules. In other words, for purposes of forming and joining unions,
certification elections, collective bargaining, and so forth, the union members are supervisory employees. In terms of working
conditions and rest periods and entitlement to the questioned benefits, however, they are officers or members of the managerial staff,
hence they are not entitled thereto.

While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed
that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are
entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, this Court
has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however,
has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the
applicable law and doctrine. 5 

This is one such case where we are inclined to tip the scales of justice in favor of the employer.

The question whether a given employee is exempt from the benefits of the law is a factual one dependent on the circumstances of the
particular case, In determining whether an employee is within the terms of the statutes, the criterion is the character of the work
performed, rather than the title of the employee's position. 6 

Consequently, while generally this Court is not supposed to review the factual findings of respondent commission, substantial justice
and the peculiar circumstances obtaining herein mandate a deviation from the rule.

A cursory perusal of the Job Value Contribution Statements 7 of the union members will readily show that these supervisory
employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in
planning, organizing, staffing, directing, controlling communicating and in making decisions in attaining the company's set goals and
objectives. These supervisory employees are likewise responsible for the effective and efficient operation of their respective
departments. More specifically, their duties and functions include, among others, the following operations whereby the employee:

1) assists the department superintendent in the following:

4
a) planning of systems and procedures relative to department activities;

b) organizing and scheduling of work activities of the department, which includes employee shifting scheduled and manning
complement;

c) decision making by providing relevant information data and other inputs;

d) attaining the company's set goals and objectives by giving his full support;

e) selecting the appropriate man to handle the job in the department; and

f) preparing annual departmental budget;

2) observes, follows and implements company policies at all times and recommends disciplinary action on erring subordinates;

3) trains and guides subordinates on how to assume responsibilities and become more productive;

4) conducts semi-annual performance evaluation of his subordinates and recommends necessary action for their
development/advancement;

5) represents the superintendent or the department when appointed and authorized by the former;

6) coordinates and communicates with other inter and intra department supervisors when necessary;

7) recommends disciplinary actions/promotions;

8) recommends measures to improve work methods, equipment performance, quality of service and working conditions;

9) sees to it that safety rules and regulations and procedure and are implemented and followed by all NASUREFCO employees,
recommends revisions or modifications to said rules when deemed necessary, and initiates and prepares reports for any observed
abnormality within the refinery;

10) supervises the activities of all personnel under him and goes to it that instructions to subordinates are properly implemented; and

11) performs other related tasks as may be assigned by his immediate superior.

From the foregoing, it is apparent that the members of respondent union discharge duties and responsibilities which ineluctably
qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the aforestated Rules to
Implement the Labor Code, viz.: (1) their primary duty consists of the performance of work directly related to management policies of
their employer; (2) they customarily and regularly exercise discretion and independent judgment; (3) they regularly and directly assist
the managerial employee whose primary duty consist of the management of a department of the establishment in which they are
employed (4) they execute, under general supervision, work along specialized or technical lines requiring special training, experience,
or knowledge; (5) they execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20%
of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work
hereinbefore described. 

Under the facts obtaining in this case, we are constrained to agree with petitioner that the union members should be considered as
officers and members of the managerial staff and are, therefore, exempt from the coverage of Article 82. Perforce, they are not entitled
to overtime, rest day and holiday.

The distinction made by respondent NLRC on the basis of whether or not the union members are managerial employees, to determine
the latter's entitlement to the questioned benefits, is misplaced and inappropriate. It is admitted that these union members are
supervisory employees and this is one instance where the nomenclatures or titles of their jobs conform with the nature of their
functions. Hence, to distinguish them from a managerial employee, as defined either under Articles 82 or 212 (m) of the Labor Code,
is puerile and in efficacious. The controversy actually involved here seeks a determination of whether or not these supervisory
employees ought to be considered as officers or members of the managerial staff. The distinction, therefore, should have been made
along that line and its corresponding conceptual criteria.
5
II. We likewise no not subscribe to the finding of the labor arbiter that the payment of the questioned benefits to the union members
has ripened into a contractual obligation.

A. Prior to the JE Program, the union members, while being supervisors, received benefits similar to the rank-and-file employees such
as overtime, rest day and holiday pay, simply because they were treated in the same manner as rank-and-file employees, and their
basic pay was nearly on the same level as those of the latter, aside from the fact that their specific functions and duties then as
supervisors had not been properly defined and delineated from those of the rank-and-file. Such fact is apparent from the clarification
made by petitioner in its motion for reconsideration 8 filed with respondent commission in NLRC Case No. CA No. I-000058, dated
August 16, 1991, wherein, it lucidly explained:

"But, complainants no longer occupy the same positions they held before the JE Program. Those positions formerly classified as
'supervisory' and found after the JE Program to be rank-and-file were classified correctly and continue to receive overtime, holiday
and restday pay. As to them, the practice subsists.

"However, those whose duties confirmed them to be supervisory, were re-evaluated, their duties re-defined and in most cases their
organizational positions re-designated to confirm their superior rank and duties. Thus, after the JE program, complainants cannot be
said to occupy the same positions." 9 

It bears mention that this positional submission was never refuted nor controverted by respondent union in any of its pleadings filed
before herein public respondent or with this Court. Hence, it can be safely concluded therefrom that the members of respondent union
were paid the questioned benefits for the reason that, at that time, they were rightfully entitled thereto. Prior to the JE Program, they
could not be categorically classified as members or officers of the managerial staff considering that they were then treated merely on
the same level as rank-and-file. Consequently, the payment thereof could not be construed as constitutive of voluntary employer
practice, which cannot be now be unilaterally withdrawn by petitioner. To be considered as such, it should have been practiced over a
long period of time, and must be shown to have been consistent and deliberate. 10 

The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the
benefits knowingly fully well that said employees are not covered by the law requiring payment thereof. 11 In the case at bar,
respondent union failed to sufficiently establish that petitioner has been motivated or is wont to give these benefits out of pure
generosity.

B. It remains undisputed that the implementation of the JE Program, the members of private respondent union were re-classified under
levels S-5 S-8 which were considered under the program as managerial staff purposes of compensation and benefits, that they
occupied re-evaluated positions, and that their basic pay was increased by an average of 50% of their basic salary prior to the JE
Program. In other words, after the JE Program there was an ascent in position, rank and salary. This in essence is a promotion which is
defined as the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and
usually accompanied by an increase in salary. 12 

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
former positions, there was nothing to prevent them from refusing to accept their promotions and their corresponding benefits. As the
sating goes by, they cannot have their cake and eat it too or, as petitioner suggests, 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.

Not so long ago, on this particular score, we had the occasion to hold that: 

". . . it is the prerogative of the management to regulate, according to its discretion and judgment, all aspects of employment. This
flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its
business. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the

6
advancement of the employer's interest and not for the purpose of defeating on circumventing the rights of employees under special
laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or
spite." 13 

WHEREFORE, the impugned decision and resolution of respondent National Labor Relations Commission promulgated on July 19,
1991 and August 30, 1991, respectively, are hereby ANNULLED and SET ASIDE for having been rendered and adopted with grave
abuse of discretion, and the basic complaint of private respondent union is DISMISSED.

G.R. No. 159577. May 3, 2006.*

CHARLITO PEÑARANDA, petitioner, vs. BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, respondents.
Labor Law; Civil Procedure; Rules of procedure must be adopted to help promote, not frustrate, substantial justice; The court
frowns upon the practice of dismissing cases purely on procedural grounds.—The Petition filed with the CA shows a prima
facie case. Petitioner attached his evidence to challenge the finding that he was a managerial employee. In his Motion for
Reconsideration, petitioner also submitted the pleadings before the labor arbiter in an attempt to comply with the CA rules. Evidently,
the CA could have ruled on the Petition on the basis of these attachments. Petitioner should be deemed in substantial compliance with
the procedural requirements. Under these extenuating circumstances, the Court does not hesitate to grant liberality in favor of
petitioner and to tackle his substantive arguments in the present case. Rules of procedure must be adopted to help promote, not
frustrate, substantial justice. The Court frowns upon the practice of dismissing cases purely on procedural grounds. Considering that
there was substantial compliance, a liberal interpretation of procedural rules in this labor case is more in keeping with the
constitutional mandate to secure social justice.

7
 Same; Labor Standards; Managerial Employees; Managerial employees are exempted from the coverage of labor standards;
Labor standards provide the working conditions of employees including entitlement to overtime pay and premium pay for working on
rest days; Managerial employees are those whose primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision.—Article 82 of the Labor Code exempts managerial employees from the coverage of
labor standards. Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium
pay for working on rest days. Under this provision, managerial employees are “those whose primary duty consists of the management
of the establishment in which they are employed or of a department or subdivision.”
_______________
*
 FIRST DIVISION.
95
VOL. 489, MAY 3, 2006  95 
Peñaranda vs. Baganga Plywood Corporation
Same; Same; Same; Who are deemed managerial employees.—The Implementing Rules of the Labor Code state that
managerial employees are those who meet the following conditions: “(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or subdivision thereof; “(2) They customarily and regularly direct the
work of two or more employees therein; “(3) They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees
are given particular weight.”
Same; Same; Same; Like managerial employees, officers and members of the managerial staff are not entitled to the provisions
of law on labor standards.—The Court disagrees with the NLRC’s finding that petitioner was a managerial employee. However,
petitioner was a member of the managerial staff, which also takes him out of the coverage of labor standards. Like managerial
employees, officers and members of the managerial staff are not entitled to the provisions of law on labor standards.
Same; Same; Same; The term foreman implies that he was the representative of management over the workers and the
operation of the department.—Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he stated that he
was the foreman responsible for the operation of the boiler. The term foreman implies that he was the representative of management
over the workers and the operation of the department. Petitioner’s evidence also showed that he was the supervisor of the steam plant.

PETITION for review on certiorari of the resolutions of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Angela A. Librado for petitioner.
     Leo Caubang for private respondent.

PANGANIBAN, CJ:

Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards.
Since petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the January 27, 20032 and July 4, 20033 Resolutions
of the Court of Appeals (CA) in CA-GR SP No. 74358. The earlier Resolution disposed as follows: 

"WHEREFORE, premises considered, the instant petition is hereby DISMISSED."4

The latter Resolution denied reconsideration.

On the other hand, the Decision of the National Labor Relations Commission (NLRC) challenged in the CA disposed as follows: 

"WHEREFORE, premises considered, the decision of the Labor Arbiter below awarding overtime pay and premium pay for rest day
to complainant is hereby REVERSED and SET ASIDE, and the complaint in the above-entitled case dismissed for lack of merit. 5

The Facts

Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywood Corporation (BPC) to take
charge of the operations and maintenance of its steam plant boiler.6 In May 2001, Peñaranda filed a Complaint for illegal dismissal
with money claims against BPC and its general manager, Hudson Chua, before the NLRC.7
8
After the parties failed to settle amicably, the labor arbiter8 directed the parties to file their position papers and submit supporting
documents.9 Their respective allegations are summarized by the labor arbiter as follows:

"[Peñaranda] through counsel in his position paper alleges that he was employed by respondent [Baganga] on March 15, 1999 with a
monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was illegally terminated on December 19, 2000. Further,
[he] alleges that his services [were] terminated without the benefit of due process and valid grounds in accordance with law.
Furthermore, he was not paid his overtime pay, premium pay for working during holidays/rest days, night shift differentials and finally
claims for payment of damages and attorney’s fees having been forced to litigate the present complaint.

"Upon the other hand, respondent [BPC] is a domestic corporation duly organized and existing under Philippine laws and is
represented herein by its General Manager HUDSON CHUA, [the] individual respondent. Respondents thru counsel allege that
complainant’s separation from service was done pursuant to Art. 283 of the Labor Code. The respondent [BPC] was on temporary
closure due to repair and general maintenance and it applied for clearance with the Department of Labor and Employment, Regional
Office No. XI to shut down and to dismiss employees (par. 2 position paper). And due to the insistence of herein complainant he was
paid his separation benefits (Annexes C and D, ibid). Consequently, when respondent [BPC] partially reopened in January 2001,
[Peñaranda] failed to reapply. Hence, he was not terminated from employment much less illegally. He opted to severe employment
when he insisted payment of his separation benefits. Furthermore, being a managerial employee he is not entitled to overtime pay and
if ever he rendered services beyond the normal hours of work, [there] was no office order/or authorization for him to do so. Finally,
respondents allege that the claim for damages has no legal and factual basis and that the instant complaint must necessarily fail for
lack of merit."10

The labor arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint was premature because he was still employed
by BPC.11 The temporary closure of BPC’s plant did not terminate his employment, hence, he need not reapply when the plant
reopened.

According to the labor arbiter, petitioner’s money claims for illegal dismissal was also weakened by his quitclaim and admission
during the clarificatory conference that he accepted separation benefits, sick and vacation leave conversions and thirteenth month
pay.12

Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay for working on rest days, and attorney’s fees in
the total amount of P21,257.98.13

Ruling of the NLRC

Respondents filed an appeal to the NLRC, which deleted the award of overtime pay and premium pay for working on rest days.
According to the Commission, petitioner was not entitled to these awards because he was a managerial employee. 14

Ruling of the Court of Appeals

In its Resolution dated January 27, 2003, the CA dismissed Peñaranda’s Petition for Certiorari. The appellate court held that he failed
to: 1) attach copies of the pleadings submitted before the labor arbiter and NLRC; and 2) explain why the filing and service of the
Petition was not done by personal service.15

In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground that petitioner still failed to submit the
pleadings filed before the NLRC.16

Hence this Petition.17

The Issues

Petitioner states the issues in this wise: 

"The [NLRC] committed grave abuse of discretion amounting to excess or lack of jurisdiction when it entertained the APPEAL of the
respondent[s] despite the lapse of the mandatory period of TEN DAYS.1avvphil.net

9
"The [NLRC] committed grave abuse of discretion amounting to an excess or lack of jurisdiction when it rendered the assailed
RESOLUTIONS dated May 8, 2002 and AUGUST 16, 2002 REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL
FINDINGS of the [labor arbiter] with respect to the following:

"I. The finding of the [labor arbiter] that [Peñaranda] is a regular, common employee entitled to monetary benefits under Art.
82 [of the Labor Code].

"II. The finding that [Peñaranda] is entitled to the payment of OVERTIME PAY and OTHER MONETARY BENEFITS." 18

The Court’s Ruling

The Petition is not meritorious.

Preliminary Issue:

Resolution on the Merits

The CA dismissed Peñaranda’s Petition on purely technical grounds, particularly with regard to the failure to submit supporting
documents. 

In Atillo v. Bombay,19 the Court held that the crucial issue is whether the documents accompanying the petition before the CA
sufficiently supported the allegations therein. Citing this case, Piglas-Kamao v. NLRC 20 stayed the dismissal of an appeal in the
exercise of its equity jurisdiction to order the adjudication on the merits.

The Petition filed with the CA shows a prima facie case. Petitioner attached his evidence to challenge the finding that he was a
managerial employee.21 In his Motion for Reconsideration, petitioner also submitted the pleadings before the labor arbiter in an
attempt to comply with the CA rules.22 Evidently, the CA could have ruled on the Petition on the basis of these attachments. Petitioner
should be deemed in substantial compliance with the procedural requirements.

Under these extenuating circumstances, the Court does not hesitate to grant liberality in favor of petitioner and to tackle his
substantive arguments in the present case. Rules of procedure must be adopted to help promote, not frustrate, substantial justice. 23 The
Court frowns upon the practice of dismissing cases purely on procedural grounds.24 Considering that there was substantial
compliance,25 a liberal interpretation of procedural rules in this labor case is more in keeping with the constitutional mandate to secure
social justice.26

First Issue:

Timeliness of Appeal

Under the Rules of Procedure of the NLRC, an appeal from the decision of the labor arbiter should be filed within 10 days from
receipt thereof.27

Petitioner’s claim that respondents filed their appeal beyond the required period is not substantiated. In the pleadings before us,
petitioner fails to indicate when respondents received the Decision of the labor arbiter. Neither did the petitioner attach a copy of the
challenged appeal. Thus, this Court has no means to determine from the records when the 10-day period commenced and terminated.
Since petitioner utterly failed to support his claim that respondents’ appeal was filed out of time, we need not belabor that point. The
parties alleging have the burden of substantiating their allegations.28

Second Issue:

Nature of Employment

Petitioner claims that he was not a managerial employee, and therefore, entitled to the award granted by the labor arbiter. 

Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide the
working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days. 29 Under this

10
provision, managerial employees are "those whose primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision."30

The Implementing Rules of the Labor Code state that managerial employees are those who meet the following conditions:

"(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or
subdivision thereof;

"(2) They customarily and regularly direct the work of two or more employees therein;

"(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the
hiring and firing and as to the promotion or any other change of status of other employees are given particular weight." 31

The Court disagrees with the NLRC’s finding that petitioner was a managerial employee. However, petitioner was a member of the
managerial staff, which also takes him out of the coverage of labor standards. Like managerial employees, officers and members of
the managerial staff are not entitled to the provisions of law on labor standards. 32 The Implementing Rules of the Labor Code define
members of a managerial staff as those with the following duties and responsibilities:

"(1) The primary duty consists of the performance of work directly related to management policies of the employer;

"(2) Customarily and regularly exercise discretion and independent judgment;

"(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management
of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along
specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision
special assignments and tasks; and

"(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and
closely related to the performance of the work described in paragraphs (1), (2), and (3) above." 33

As shift engineer, petitioner’s duties and responsibilities were as follows:

"1. To supply the required and continuous steam to all consuming units at minimum cost.

"2. To supervise, check and monitor manpower workmanship as well as operation of boiler and accessories.

"3. To evaluate performance of machinery and manpower.

"4. To follow-up supply of waste and other materials for fuel.

"5. To train new employees for effective and safety while working.

"6. Recommend parts and supplies purchases.

"7. To recommend personnel actions such as: promotion, or disciplinary action.

"8. To check water from the boiler, feedwater and softener, regenerate softener if beyond hardness limit.

"9. Implement Chemical Dosing.

"10. Perform other task as required by the superior from time to time."34

The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner was a member of the managerial staff. His
duties and responsibilities conform to the definition of a member of a managerial staff under the Implementing Rules. 

11
Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the machines
and the performance of the workers in the engineering section. This work necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the managerial
staff.35

Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he stated that he was the foreman responsible for
the operation of the boiler.36 The term foreman implies that he was the representative of management over the workers and the
operation of the department.37 Petitioner’s evidence also showed that he was the supervisor of the steam plant.38 His classification as
supervisor is further evident from the manner his salary was paid. He belonged to the 10% of respondent’s 354 employees who were
paid on a monthly basis; the others were paid only on a daily basis.39

On the basis of the foregoing, the Court finds no justification to award overtime pay and premium pay for rest days to petitioner.

WHEREFORE, the Petition is DENIED. Costs against petitioner. 

SO ORDERED.

12
No. L-18353. July 31, 1963.
SAN MIGUEL BREWERY, INC., petitioner, vs.DEMOCRATIC LABOR ORGANIZATION, ET AL., respondents.
Labor laws; Eight-Hour Labor Law; No application to outside or field sales personnel.—Where after the morning roll call the
outside or field sales personnel leave the plant of the company to go on their respective sales routes and they do not have a daily time
record but the sales routes are so planned that they can be completed within 8 hours at most, and they receive monthly salaries and
sales commissions in variable amounts, so that they are made to work beyond the required eight hours similar to piece work, "pakiao",
or commission basis regardless of the time employed, and the employees' participation depends on their industry, it is  held that the
Eight-Hour Labor Law has no application to said outside or field sales personnel and that they are not entitled to overtime
compensation.
Same; Same; Night salary differentials retroactive.—Watchmen who rendered night duties once every three weeks
continuously during the period of their employment should be paid 25% additional compensation for work from 6:00 to 12:00 p.m.
and 75% additional compensation for work from 12:01 to 6:00 in the morning retroactive prior to date of demand because a similar
claim had been filed long before and had been the subject of negotiation between the union and the company which culminated in a
strike which fizzled out with the understanding that such claim should be settled in court.
Same; Same; Sundays and holidays pay.—Watchmen who work on Sundays and holidays are entitled to extra pay for work
done during these days although they are paid on a monthly basis and are given one day off. Section 4 of Commonwealth Act No. 444
expressly provides that no employer may compel an employee to work during Sundays and legal holidays unless he is paid an
additional sum of his regular compensation. This proviso is mandatory, regardless of the nature of the compensation. The only
exception is with regard to public utilities who perform some public service.

PETITION for review of a decision of the Court of Industrial Relations.

The facts are stated in the opinion of the Court.

     Paredes, Poblador, Cruz & Nazareno for petitioner.
     Delfin N. Mercader for respondents.

BAUTISTA ANGELO, J.:

On January 27, 1955, the Democratic Labor Association filed complaint against the San Miguel Brewery, Inc. embodying 12 demands
for the betterment of the conditions of employment of its members. The company filed its answer to the complaint specifically
denying its material averments and answering the demands point by point. The company asked for the dismissal of the complaint.

At the hearing held sometime in September, 1955, the union manifested its desire to confine its claim to its demands for overtime,
night-shift differential pay, and attorney's fees, although it was allowed to present evidence on service rendered during Sundays and
holidays, or on its claim for additional separation pay and sick and vacation leave compensation.1äwphï1.ñët

After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who was commissioned to receive the evidence,
rendered decision expressing his disposition with regard to the points embodied in the complaint on which evidence was presented.
Specifically, the disposition insofar as those points covered by this petition for review are concerned, is as follows:

1. With regard to overtime compensation, Judge Bautista held that the provisions of the Eight-Hour Labor Law apply to the
employees concerned for those working in the field or engaged in the sale of the company's products outside its premises and
consequently they should be paid the extra compensation accorded them by said law in addition to the monthly salary and
commission earned by them, regardless of the meal allowance given to employees who work up to late at night.

13
 2. As to employees who work at night, Judge Bautista decreed that they be paid their corresponding salary differentials for
work done at night prior to January 1, 1949 with the present qualification: 25% on the basis of their salary to those who work
from 6:00 to 12:00 p.m., and 75% to those who work from 12:01 to 6:00 in the morning.

3. With regard to work done during Sundays and holidays, Judge Bautista also decreed that the employees concerned be paid
an additional compensation of 25% as provided for in Commonwealth Act No. 444 even if they had been paid a
compensation on monthly salary basis.

The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis, payment of accumulated vacation and
sick leave and attorney's fees, as well as the award of additional separation pay, were either dismissed, denied, or set aside.

Its motion for reconsideration having been denied by the industrial court en banc, which affirmed the decision of the court a quo with
few exceptions, the San Miguel Brewery, Inc. interposed the present petition for review.

Anent the finding of the court a quo, as affirmed by the Court of Industrial Relations, to the effect that outside or field sales personnel
are entitled to the benefits of the Eight-Hour Labor Law, the pertinent facts are as follows:

After the morning roll call, the employees leave the plant of the company to go on their respective sales routes either at 7:00 a.m. for
soft drinks trucks, or 8:00 a.m. for beer trucks. They do not have a daily time record. The company never require them to start their
work as outside sales personnel earlier than the above schedule.

The sales routes are so planned that they can be completed within 8 hours at most, or that the employees could make their sales on
their routes within such number of hours variable in the sense that sometimes they can be completed in less than 8 hours, sometimes 6
to 7 hours, or more. The moment these outside or field employees leave the plant and while in their sales routes they are on their own,
and often times when the sales are completed, or when making short trip deliveries only, they go back to the plant, load again, and
make another round of sales. These employees receive monthly salaries and sales commissions in variable amounts. The amount of
compensation they receive is uncertain depending upon their individual efforts or industry. Besides the monthly salary, they are paid
sales commission that range from P30, P40, sometimes P60, P70, to sometimes P90, P100 and P109 a month, at the rate of P0.01 to
P0.01-½ per case.

It is contended that since the employees concerned are paid a commission on the sales they make outside of the required 8 hours
besides the fixed salary that is paid to them, the Court of Industrial Relations erred in ordering that they be paid an overtime
compensation as required by the Eight-Hour Labor Law for the reason that the commission they are paid already takes the place of
such overtime compensation. Indeed, it is claimed, overtime compensation is an additional pay for work or services rendered in excess
of 8 hours a day by an employee, and if the employee is already given extra compensation for labor performed in excess of 8 hours a
day, he is not covered by the law. His situation, the company contends, can be likened to an employee who is paid on piece-work,
"pakiao", or commission basis, which is expressly excluded from the operation of the Eight-Hour Labor Law. 1

We are in accord with this view, for in our opinion the Eight-Hour Labor Law only has application where an employee or laborer is
paid on a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if he is made to work beyond the requisite
period of 8 hours, he should be paid the additional compensation prescribed by law. This law has no application when the employee or
laborer is paid on a piece-work, "pakiao", or commission basis, regardless of the time employed. The philosophy behind this
exemption is that his earnings in the form of commission based on the gross receipts of the day. His participation depends upon his
industry so that the more hours he employs in the work the greater are his gross returns and the higher his commission. This
philosophy is better explained in Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, as follows:

The reasons for excluding an outside salesman are fairly apparent. Such salesman, to a greater extent, works individually.
There are no restrictions respecting the time he shall work and he can earn as much or as little, within the range of his ability,
as his ambition dictates. In lieu of overtime he ordinarily receives commissions as extra compensation. He works away from
his employer's place of business, is not subject to the personal supervision of his employer, and his employer has no way of
knowing the number of hours he works per day.

True it is that the employees concerned are paid a fixed salary for their month of service, such as Benjamin Sevilla, a salesman, P215;
Mariano Ruedas, a truck driver, P155; Alberto Alpaza and Alejandro Empleo, truck helpers, P125 each, and sometimes they work in
excess of the required 8-hour period of work, but for their extra work they are paid a commission which is in lieu of the extra
compensation to which they are entitled. The record shows that these employees during the period of their employment were paid
sales commission ranging from P30, P40, sometimes P60, P70, to sometimes P90, P100 and P109 a month depending on the volume
of their sales and their rate of commission per case. And so, insofar is the extra work they perform, they can be considered as
employees paid on piece work, "pakiao", or commission basis. The Department of Labor, called upon to implement, the Eight-Hour
14
Labor Law, is of this opinion when on December 9, 1957 it made the ruling on a query submitted to it, thru the Director of the Bureau
of Labor Standards, to the effect that field sales personnel receiving regular monthly salaries, plus commission, are not subject to the
Eight-Hour Labor Law. Thus, on this point, said official stated:

. . . Moreover, when a fieldman receives a regular monthly salary plus commission on percentage basis of his sales, it is also
the established policy of the Office to consider his commission as payment for the extra time he renders in excess of eight
hours, thereby classifying him as if he were on piecework basis, and therefore, technically speaking, he is not subject to the
Eight-Hour Labor Law.

We are, therefore, of the opinion that the industrial court erred in holding that the Eight-Hour Labor Law applies to the employees
composing the outside service force and in ordering that they be paid the corresponding additional compensation.

With regard to the claim for night salary differentials, the industrial court found that claimants Magno Johnson and Jose Sanchez
worked with the respondent company during the period specified by them in their testimony and that watchmen Zoilo Illiga, Inocentes
Prescillas and Daniel Cayuca rendered night duties once every three weeks continuously during the period of the employment and that
they were never given any additional compensation aside from their monthly regular salaries. The court found that the company
started paying night differentials only in January, 1949 but never before that time. And so it ordered that the employees concerned be
paid 25% additional compensation for those who worked from 6:00 to 12:00 p.m. and 75% additional compensation for those who
worked from 12:01 to 6: 00 in the morning. It is now contended that this ruling is erroneous because an award for night shift
differentials cannot be given retroactive effect but can only be entertained from the date of demand which was on January 27, 1953,
citing in support thereof our ruling in Earnshaws Docks & Honolulu Iron Works v. The Court of Industrial Relations, et al., L-8896,
January 25, 1957.

This ruling, however, has no application here for it appears that before the filing of the petition concerning this claim a similar one had
already been filed long ago which had been the subject of negotiations between the union and the company which culminated in a
strike in 1952. Unfortunately, however, the strike fizzled out and the strikers were ordered to return to work with the understanding
that the claim for night salary differentials should be settled in court. It is perhaps for this reason that the court a quo granted this
claim in spite of the objection of the company to the contrary.

The remaining point to be determined refers to the claim for pay for Sundays and holidays for service performed by some claimants
who were watchmen or security guards. It is contended that these employees are not entitled to extra pay for work done during these
days because they are paid on a monthly basis and are given one day off which may take the place of the work they may perform
either on Sunday or any holiday.

We disagree with this claim because it runs counter to law. Section 4 of Commonwealth Act No. 444 expressly provides that no
person, firm or corporation may compel an employee or laborer to work during Sundays and legal holidays unless he is paid an
additional sum of 25% of his regular compensation. This proviso is mandatory, regardless of the nature of compensation. The only
exception is with regard to public utilities who perform some public service.

WHEREFORE, the decision of the industrial court is hereby modified as follows: the award with regard to extra work performed by
those employed in the outside or field sales force is set aside. The rest of the decision insofar as work performed on Sundays and
holidays covering watchmen and security guards, as well as the award for night salary differentials, is affirmed. No costs.

G.R. No. 156367. May 16, 2005.*

15
AUTO BUS TRANSPORT SYSTEMS, INC., petitioner, vs.ANTONIO BAUTISTA, respondent.
Labor Law; Service Incentive Leave; Field Personnel; Words and Phrases; The phrase “other employees whose performance
is unsupervised by the employer” in Section 1(D), Rule V, Book III of the Implementing Rules and Regulations of the Labor Code
must not be understood as a separate classification of employees to which service incentive leave shall not be granted—rather, it
serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those “whose actual hours
of work in the field cannot be determined with reasonable certainty; 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.”—A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has
been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly
excluded by Section 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to employees
classified as “field personnel.” The phrase “other employees whose performance is unsupervised by the employer” must not be
understood as a separate classification of employees to which service incentive leave shall not be granted. Rather, it serves as an
amplification of the interpretation of the definition of field personnel under the Labor Code as those “whose actual hours of work in
the field cannot be determined with reasonable certainty.” The same is true with respect to the phrase “ those who are engaged on task
or contract basis, purely commission basis.” Said phrase should be related with “field personnel,” applying the rule on ejusdem
generis that general and unlimited terms are restrained and limited by the particular terms that they follow. Hence, 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.
_______________
*
 SECOND DIVISION.
579
VOL. 458, MAY 16, 2005  579 
Auto Bus Transport Systems, Inc. vs. Bautista
Same; Same; Same; Same; What must be ascertained in order to resolve the issue of propriety of the grant of service incentive
leave to a bus driver-conductor is whether or not he is a field personnel; According to the Labor Code, “field personnel” shall refer
to nonagricultural 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.—Petitioner’s 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. This definition is further elaborated in the Bureau of Working
Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association which states that: As a
general rule, [field personnel] are those whose performance of their job/service is not supervised by the employer or his representative,
the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable
certainty; hence, they are paid specific amount for rendering specific service or performing specific work. If required to be at specific
places at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing
work away from the principal office of the employee.
Same; Same; Same; Same; The definition of a “field personnel” is not merely concerned with the location where the employee
regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer—in order to
conclude whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer.—At this point, it is necessary to stress that the definition of a “field personnel”
is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s
performance is unsupervised by the employer. As discussed above, field personnel are those who regularly perform their duties away
from the principal 
580
580  SUPREME COURT REPORTS ANNOTATED 
Auto Bus Transport Systems, Inc. vs. Bautista
place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable
certainty. Thus, in order to conclude whether an employee is a field employee, it is also necessary to ascertain if actual hours of work
in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not
the employee’s time and performance are constantly supervised by the employer.
Same; Same; Same; Same; Bus Drivers and Conductors; A bus driver-conductor, not being a field personnel but a regular
employee who performs tasks usually necessary and desirable to the usual trade of the company’s business, is entitled to the grant of
service incentive leave.—As observed by the Labor Arbiter and concurred in by the Court of Appeals: It is of judicial notice that along
the routes that are plied by these bus companies, there are its inspectors assigned at strategic places who board the bus and inspect the
passengers, the punched tickets, and the conductor’s reports. There is also the mandatory once-a-week car barn or shop day, where the
bus is regularly checked as to its mechanical, electrical, and hydraulic aspects, whether or not there are problems thereon as reported

16
by the driver and/or conductor. They too, must be at specific place as [sic] specified time, as they generally observe prompt departure
and arrival from their point of origin to their point of destination. In each and every depot, there is always the Dispatcher whose
function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper time.
These, are present in the case at bar. The driver, the complainant herein, was therefore under constant supervision while in the
performance of this work. He cannot be considered a field personnel. We agree in the above disquisition. Therefore, as correctly
concluded by the appellate court, respondent is not a field personnel but a regular employee who performs tasks usually necessary and
desirable to the usual trade of petitioner’s business. Accordingly, respondent is entitled to the grant of service incentive leave.
Same; Same; Prescription; In the computation of the three-year prescriptive period, a determination must be made as to the
period when the act constituting a violation of the workers’ right to the benefits being claimed was committed. —It is settled
jurisprudence that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is 
581
VOL. 458, MAY 16, 2005  581 
Auto Bus Transport Systems, Inc. vs. Bautista
created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on
the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the
plaintiff. To properly construe Article 291 of the Labor Code, it is essential to ascertain the time when the third element of a cause of
action transpired. Stated differently, in the computation of the three-year prescriptive period, a determination must be made as to the
period when the act constituting a violation of the workers’ right to the benefits being claimed was committed. For if the cause of
action accrued more than three (3) years before the filing of the money claim, said cause of action has already prescribed in
accordance with Article 291.
Same; Same; Same; It is essential to recognize that the service incentive leave is a curious animal in relation to other benefits
granted by law to every employee; If the employee entitled to service incentive leave does not use or commute the same, he is entitled
upon his resignation or separation from work to the commutation of his accrued service incentive leave.—It is essential at this point,
however, to recognize that the service incentive leave is a curious animal in relation to other benefits granted by the law to every
employee. In the case of service incentive leave, the employee may choose to either use his leave credits or commute it to its monetary
equivalent if not exhausted at the end of the year. Furthermore, if the employee entitled to service incentive leave does not use or
commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive
leave. As enunciated by the Court in Fernandez v. NLRC: The clear policy of the Labor Code is to grant service incentive leave pay to
workers in all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations
provides that “[e]very employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of
five days with pay.” Service incentive leave is a right which accrues to every employee who has served “within 12 months, whether
continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays
unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less
than 12 months, in which case said period shall be considered as one year.” It is also “commutable to its money equiva-
582
582  SUPREME COURT REPORTS ANNOTATED 
Auto Bus Transport Systems, Inc. vs. Bautista
lent if not used or exhausted at the end of the year.” In other words, an employee who has served for one year is entitled to it.
He may use it as leave days or he may collect its monetary value. To limit the award to three years, as the solicitor general
recommends, is to unduly restrict such right.
Same; Same; Same; With regard to service incentive leave, the three-year prescriptive period commences, not at the end of the
year when the employee becomes entitled to the commutation of his service incentive leave, but from the time when the employer
refuses to pay its monetary equivalent after demand or commutation or upon termination of the employee’s services, as the case may
be.—Correspondingly, it can be conscientiously deduced that the cause of action of an entitled employee to claim his service incentive
leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of
said leave credits but instead chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credits
and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of
his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or
separation from employment. Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can
conclude that the three (3)-year prescriptive period commences, not at the end of the year when the employee becomes entitled to the
commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand
of commutation or upon termination of the employee’s services, as the case may be.
Same; Same; Same; Social Justice; The Court’s construal of Art. 291 of the Labor Code, vis-à-vis the rules on service incentive
leave, is in keeping with the rudimentary principle that in the implementation and interpretation of the provisions of the Labor Code
and its implementing regulations, the workingman’s welfare should be the primordial and paramount consideration.—The above
construal of Art. 291, vis-à-vis the rules on service incentive leave, is in keeping with the rudimentary principle that in the
implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman’s welfare
should be the primordial and paramount consideration. The policy is to extend the applicabil-

17
 583
VOL. 458, MAY 16, 2005  583 
Auto Bus Transport Systems, Inc. vs. Bautista
ity of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the
avowed policy of the State to give maximum aid and protection to labor.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Edmundo A. Cruz for petitioner.
     Joseph D. Sagampud, Jr. for private respondent.

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari assailing the Decision1 and Resolution2 of the Court of Appeals affirming the
Decision3 of the National Labor Relations Commission (NLRC). The NLRC ruling modified the Decision of the Labor Arbiter
(finding respondent entitled to the award of 13th month pay and service incentive leave pay) by deleting the award of 13th month pay to
respondent.

THE FACTS

Since 24 May 1995, respondent Antonio Bautista has been employed by petitioner Auto Bus Transport Systems, Inc. (Autobus), as
driver-conductor with travel routes Manila-Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and Manila-Tabuk via Baguio.
Respondent was paid on commission basis, seven percent (7%) of the total gross income per travel, on a twice a month basis.

On 03 January 2000, while respondent was driving Autobus No. 114 along Sta. Fe, Nueva Vizcaya, the bus he was driving
accidentally bumped the rear portion of Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without giving any
warning.

Respondent averred that the accident happened because he was compelled by the management to go back to Roxas, Isabela, although
he had not slept for almost twenty-four (24) hours, as he had just arrived in Manila from Roxas, Isabela. Respondent further alleged
that he was not allowed to work until he fully paid the amount of P75,551.50, representing thirty percent (30%) of the cost of repair of
the damaged buses and that despite respondent’s pleas for reconsideration, the same was ignored by management. After a month,
management sent him a letter of termination.

Thus, on 02 February 2000, respondent instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13 th month
pay and service incentive leave pay against Autobus.

Petitioner, on the other hand, maintained that respondent’s employment was replete with offenses involving reckless imprudence,
gross negligence, and dishonesty. To support its claim, petitioner presented copies of letters, memos, irregularity reports, and warrants
of arrest pertaining to several incidents wherein respondent was involved.

Furthermore, petitioner avers that in the exercise of its management prerogative, respondent’s employment was terminated only after
the latter was provided with an opportunity to explain his side regarding the accident on 03 January 2000.

On 29 September 2000, based on the pleadings and supporting evidence presented by the parties, Labor Arbiter Monroe C. Tabingan
promulgated a Decision,4 the dispositive portion of which reads:

WHEREFORE, all premises considered, it is hereby found that the complaint for Illegal Dismissal has no leg to stand on. It is
hereby ordered DISMISSED, as it is hereby DISMISSED.

However, still based on the above-discussed premises, the respondent must pay to the complainant the following:

a. his 13th month pay from the date of his hiring to the date of his dismissal, presently computed at P78,117.87;

b. his service incentive leave pay for all the years he had been in service with the respondent, presently computed at
P13,788.05.
18
 All other claims of both complainant and respondent are hereby dismissed for lack of merit.5

Not satisfied with the decision of the Labor Arbiter, petitioner appealed the decision to the NLRC which rendered its decision on 28
September 2001, the decretal portion of which reads:

[T]he Rules and Regulations Implementing Presidential Decree No. 851, particularly Sec. 3 provides:

"Section 3. Employers covered. – The Decree shall apply to all employers except to:

xxx       xxx       xxx

e) employers of those who are paid on purely commission, boundary, or task basis, performing a specific work,
irrespective of the time consumed in the performance thereof. xxx."

Records show that complainant, in his position paper, admitted that he was paid on a commission basis.

In view of the foregoing, we deem it just and equitable to modify the assailed Decision by deleting the award of 13 th month
pay to the complainant.

WHEREFORE, the Decision dated 29 September 2000 is MODIFIED by deleting the award of 13th month pay. The other
findings are AFFIRMED.6

In other words, the award of service incentive leave pay was maintained. Petitioner thus sought a reconsideration of this aspect, which
was subsequently denied in a Resolution by the NLRC dated 31 October 2001.

Displeased with only the partial grant of its appeal to the NLRC, petitioner sought the review of said decision with the Court of
Appeals which was subsequently denied by the appellate court in a Decision dated 06 May 2002, the dispositive portion of which
reads:

WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit; and the assailed Decision of respondent
Commission in NLRC NCR CA No. 026584-2000 is hereby AFFIRMED in toto. No costs.7

Hence, the instant petition.

ISSUES

1. Whether or not respondent is entitled to service incentive leave;

2. Whether or not the three (3)-year prescriptive period provided under Article 291 of the Labor Code, as amended, is applicable to
respondent’s claim of service incentive leave pay. 

RULING OF THE COURT

The disposition of the first issue revolves around the proper interpretation of Article 95 of the Labor Code vis-à-visSection 1(D), Rule
V, Book III of the Implementing Rules and Regulations of the Labor Code which provides:

Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE

(a) 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.

Book III, Rule V: SERVICE INCENTIVE LEAVE

SECTION 1. Coverage. – This rule shall apply to all employees except:

19
 …

(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; . . .

A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by
the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of
Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to employees classified as "field personnel."
The phrase "other employees whose performance is unsupervised by the employer" must not be understood as a separate classification
of employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of the
definition of field personnel under the Labor Code as those "whose actual hours of work in the field cannot be determined with
reasonable certainty."8

The same is true with respect to the phrase "those who are engaged on task or contract basis, purely commission basis." Said phrase
should be related with "field personnel," applying the rule on ejusdem generis that general and unlimited terms are restrained and
limited by the particular terms that they follow.9 Hence, 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, petitioner’s 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. This definition is further elaborated in the Bureau of Working Conditions (BWC), Advisory
Opinion to Philippine Technical-Clerical Commercial Employees Association10 which states that:

As a general rule, [field personnel] are those whose performance of their job/service is not supervised by the employer or his
representative, the workplace being away from the principal office and whose hours and days of work cannot be determined
with reasonable certainty; hence, they are paid specific amount for rendering specific service or performing specific work. If
required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite
the fact that they are performing work away from the principal office of the employee. [Emphasis ours]

To this discussion by the BWC, the petitioner differs and postulates that under said advisory opinion, no employee would ever be
considered a field personnel because every employer, in one way or another, exercises control over his employees. Petitioner further
argues that the only criterion that should be considered is the nature of work of the employee in that, if the employee’s job requires
that he works away from the principal office like that of a messenger or a bus driver, then he is inevitably a field personnel.

We are not persuaded. At this point, it is necessary to stress that the definition of a "field personnel" is not merely concerned with the
location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by
the employer. As discussed above, field personnel are those who regularly perform their duties away from the principal place of
business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Thus, in order
to conclude whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not the employee’s time
and performance are constantly supervised by the employer.

As observed by the Labor Arbiter and concurred in by the Court of Appeals:

It is of judicial notice that along the routes that are plied by these bus companies, there are its inspectors assigned at strategic
places who board the bus and inspect the passengers, the punched tickets, and the conductor’s reports. There is also the
mandatory once-a-week car barn or shop day, where the bus is regularly checked as to its mechanical, electrical, and
hydraulic aspects, whether or not there are problems thereon as reported by the driver and/or conductor. They too, must be at
specific place as [sic] specified time, as they generally observe prompt departure and arrival from their point of origin to their
point of destination. In each and every depot, there is always the Dispatcher whose function is precisely to see to it that the
bus and its crew leave the premises at specific times and arrive at the estimated proper time. These, are present in the case at
bar. The driver, the complainant herein, was therefore under constant supervision while in the performance of this work. He
cannot be considered a field personnel.11
20
We agree in the above disquisition. Therefore, as correctly concluded by the appellate court, respondent is not a field personnel but a
regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner’s business. Accordingly,
respondent is entitled to the grant of service incentive leave.

The question now that must be addressed is up to what amount of service incentive leave pay respondent is entitled to.

The response to this query inevitably leads us to the correlative issue of whether or not the three (3)-year prescriptive period under
Article 291 of the Labor Code is applicable to respondent’s claim of service incentive leave pay.

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; otherwise, they shall be forever barred.

In the application of this section of the Labor Code, the pivotal question to be answered is when does the cause of action for money
claims accrue in order to determine the reckoning date of the three-year prescriptive period.

It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and
under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right;
and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation
of the defendant to the plaintiff.12

To properly construe Article 291 of the Labor Code, it is essential to ascertain the time when the third element of a cause of action
transpired. Stated differently, in the computation of the three-year prescriptive period, a determination must be made as to the period
when the act constituting a violation of the workers’ right to the benefits being claimed was committed. For if the cause of action
accrued more than three (3) years before the filing of the money claim, said cause of action has already prescribed in accordance with
Article 291.13

Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits being claimed
have been withheld from the employee for a period longer than three (3) years, the amount pertaining to the period beyond the three-
year prescriptive period is therefore barred by prescription. The amount that can only be demanded by the aggrieved employee shall
be limited to the amount of the benefits withheld within three (3) years before the filing of the complaint. 14

It is essential at this point, however, to recognize that the service incentive leave is a curious animal in relation to other benefits
granted by the law to every employee. In the case of service incentive leave, the employee may choose to either use his leave credits
or commute it to its monetary equivalent if not exhausted at the end of the year. 15 Furthermore, if the employee entitled to service
incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the commutation of
his accrued service incentive leave. As enunciated by the Court in Fernandez v. NLRC:16

The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a few
exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that "[e]very employee who has
rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay." Service
incentive leave is a right which accrues to every employee who has served "within 12 months, whether continuous or broken
reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the
working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less than
12 months, in which case said period shall be considered as one year." It is also "commutable to its money equivalent if not
used or exhausted at the end of the year." In other words, an employee who has served for one year is entitled to it. He may
use it as leave days or he may collect its monetary value. To limit the award to three years, as the solicitor general
recommends, is to unduly restrict such right.17 [Italics supplied]

Correspondingly, it can be conscientiously deduced that the cause of action of an entitled employee to claim his service incentive
leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of
said leave credits but instead chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credits
and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of
his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or
separation from employment.

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that the three (3)-
year prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation of his service

21
incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon
termination of the employee’s services, as the case may be.

The above construal of Art. 291, vis-à-vis the rules on service incentive leave, is in keeping with the rudimentary principle that in the
implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman’s welfare
should be the primordial and paramount consideration.18 The policy is to extend the applicability of the decree to a greater number of
employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum
aid and protection to labor.19

In the case at bar, respondent had not made use of his service incentive leave nor demanded for its commutation until his employment
was terminated by petitioner. Neither did petitioner compensate his accumulated service incentive leave pay at the time of his
dismissal. It was only upon his filing of a complaint for illegal dismissal, one month from the time of his dismissal, that respondent
demanded from his former employer commutation of his accumulated leave credits. His cause of action to claim the payment of his
accumulated service incentive leave thus accrued from the time when his employer dismissed him and failed to pay his accumulated
leave credits. 

Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time the
employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. Since respondent had filed his
money claim after only one month from the time of his dismissal, necessarily, his money claim was filed within the prescriptive period
provided for by Article 291 of the Labor Code.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed Decision of the Court of Appeals in CA-
G.R. SP. No. 68395 is hereby AFFIRMED. No Costs.

SO ORDERED.

G.R. No. 112574. October 8, 1998.*

MERCIDAR FISHING CORPORATION represented by its President DOMINGO B. NAVAL, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and FERMIN AGAO, JR., respondents.
Labor Law; Service Incentive Leave Pay; Words and Phrases;Phrase “Whose Actual Hours of Work in the Field Cannot be
Determined with Reasonable Certainty,” Explained.—In the case of Union of Filipro Employees (UFE) v. Vicar, this Court explained
the meaning of the phrase “whose actual hours of work in the field cannot be determined with reasonable certainty” in Art. 82 of the
Labor Code, as follows: Moreover, the requirement that “actual hours of work in the field cannot be determined with reasonable
certainty” must be read in conjunction with Rule IV, Book III of the Implementing Rules which provides: Rule IV Holidays with Pay.
Section 1. Coverage—This rule shall apply to all employees except: . . . . (e) Field personnel and other employees  whose
time and performance is unsupervised by the employer x x x (Italics supplied) While contending that such rule added another element
not found in the law (Rollo, p. 13), the petitioner nevertheless attempted to show that its affected members are not covered by the
abovementioned rule. The petitioner asserts that the company’s sales personnel are strictly supervised as shown by the SOD
(Supervisor of the Day) schedule and the company circular dated March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55). Contrary to the
contention of the petitioner, the Court finds that the aforementioned rule did not add another element to the Labor Code definition of
field personnel. The clause 
________________
*
 SECOND DIVISION.
441
VOL. 297, OCTOBER 8, 1998  441 
Mercidar Fishing Corporation vs. NLRC
“whose time and performance is unsupervised by the employer” did not amplify but merely interpreted and expounded the
clause “whose actual hours of work in the field cannot be determined with reasonable certainty.” The former clause is still within the
scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an employee’s actual working hours

22
in the field can be determined with reasonable certainty, query must be made as to whether or not such employee’s time and
performance is constantly supervised by the employer.
Same; Same; Same; Fishermen; Although fishermen perform non-agricultural work away from their employer’s business
offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of the
employer through the vessel’s patron or master.—In contrast, in the case at bar, during the entire course of their fishing voyage,
fishermen employed by petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work
away from petitioner’s business offices, the fact remains that throughout the duration of their work they are under the effective control
and supervision of petitioner through the vessel’s patron or master as the NLRC correctly held.
Same; Administrative Law; Evidence; It is trite to say that the factual findings of quasi-judicial bodies are generally binding as
long as they are supported substantially by evidence in the record of the case.—It is trite to say that the factual findings of quasi-
judicial bodies are generally binding as long as they are supported substantially by evidence in the record of the case. This is
especially so where, as here, the agency and its subordinate who heard the case in the first instance are in full agreement as to the
facts.

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

MENDOZA, J.:

This is a petition for certiorari to set aside the decision, dated August 30, 1993, of the National Labor Relations Commission
dismissing the appeal of petitioner Mercidar Fishing Corporation from the decision of the Labor Arbiter in NLRC NCR Case No. 09-
05084-90, as well as the resolution dated October 25, 1993, of the NLRC denying reconsideration.

This case originated from a complaint filed on September 20, 1990 by private respondent Fermin Agao, Jr. against petitioner for
illegal dismissal, violation of P.D. No. 851, and non-payment of five days service incentive leave for 1990. Private respondent had
been employed as a "bodegero" or ship's quartermaster on February 12, 1988. He complained that he had been constructively
dismissed by petitioner when the latter refused him assignments aboard its boats after he had reported to work on May 28, 1990. 1

Private respondent alleged that he had been sick and thus allowed to go on leave without pay for one month from April 28, 1990 but
that when he reported to work at the end of such period with a health clearance, he was told to come back another time as he could not
be reinstated immediately. Thereafter, petitioner refused to give him work. For this reason, private respondent asked for a certificate of
employment from petitioner on September 6, 1990. However, when he came back for the certificate on September 10, petitioner
refused to issue the certificate unless he submitted his resignation. Since private respondent refused to submit such letter unless he was
given separation pay, petitioner prevented him from entering the premises. 2

Petitioner, on the other hand, alleged that it was private respondent who actually abandoned his work. It claimed that the latter failed
to report for work after his leave had expired and was, in fact, absent without leave for three months until August 28, 1998. Petitioner
further claims that, nonetheless, it assigned private respondent to another vessel, but the latter was left behind on September 1, 1990.
Thereafter, private respondent asked for a certificate of employment on September 6 on the pretext that he was applying to another
fishing company. On September 10, 1990, he refused to get the certificate and resign unless he was given separation pay. 3

On February 18, 1992, Labor Arbiter Arthur L. Amansec rendered a decision disposing of the case as follows:

ACCORDINGLY, respondents are ordered to reinstate complainant with backwages, pay him his 13th month pay
and incentive leave pay for 1990.

All other claims are dismissed.

SO ORDERED.

Petitioner appealed to the NLRC which, on August 30, 1993, dismissed the appeal for lack of merit. The NLRC dismissed petitioner's
claim that it cannot be held liable for service incentive leave pay by fishermen in its employ as the latter supposedly are "field
personnel" and thus not entitled to such pay under the Labor Code.4

The NLRC likewise denied petitioner's motion for reconsideration of its decision in its order dated October 25, 1993.

Hence, this petition. Petitioner contends:

I
23
 THE RESPONDENT COMMISSION PALPABLY ERRED IN RULING AND SUSTAINING THE VIEW THAT
FISHING CREW MEMBERS. LIKE FERMIN AGAO, JR., CANNOT BE CLASSIFIED AS FIELD PERSONNEL
UNDER ARTICLE 82 OF THE LABOR CODE.

II

THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO

LACK OF JURISDICTION WHEN IT UPHELD THE FINDINGS OF THE LABOR ARBITER THAT HEREIN
PETITIONER HAD CONSTRUCTIVELY DISMISSED FERMIN AGAO, JR., FROM EMPLOYMENT.

The petition has no merit.

Art. 82 of the Labor Code provides:

Art. 82. Coverage. — The provisions of this Title [Working Conditions and Rest Periods] shall apply to employees
in all establishments and undertakings whether for profit or not, but not to government 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.

x x x           x x x          x x x

"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.

Petitioner argues essentially that since the work of private respondent is performed away from its principal place of business, it has no
way of verifying his actual hours of work on the vessel. It contends that private respondent and other fishermen in its employ should
be classified as "field personnel" who have no statutory right to service incentive leave pay.

In the case of Union of Pilipro Employees (UFE) v. Vicar, 5 this Court explained the meaning of the phrase "whose actual hours of
work in the field cannot be determined with reasonable certainty" in Art. 82 of the Labor Code, as follows:

Moreover, the requirement that "actual hours of work in the field cannot be determined with reasonable certainty"
must be read in conjunction with Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

x x x           x x x          x x x

(e) Field personnel and other employees whose time and performance is unsupervised by the
employer . . . (Emphasis supplied).

While contending that such rule added another element not found in the law (Rollo, p. 13), the petitioner
nevertheless attempted to show that its affected members are not covered by the abovementioned rule. The petitioner
asserts that the company's sales personnel are strictly supervised as shown by the SOD (Supervisor of the Day)
schedule and the company circular dated March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).

Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add another element
to the Labor Code definition of field personnel. The clause "whose time and performance is unsupervised by the
employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field
cannot be determined with reasonable certainty." The former clause is still within the scope and purview of Article
82 which defines field personnel. Hence, in deciding whether or not an employee's actual working hours in the field
can be determined with reasonable certainty, query must be made as to whether or not such employee's time and
performance is constantly supervised by the employer. 6

24
Accordingly, it was held in the aforementioned case that salesmen of Nestle Philippines, Inc. were field personnel:

It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported to the office and
come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.

The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales personnel's
working hours which can be determined with reasonable certainty.

The Court does not agree. The law requires that the actual hours of work in the field be reasonably ascertained. The
company has no way of determining whether or not these sales personnel, even if they report to the office before
8:00 a.m. prior to field work and come back at 4:30 p.m., really spend the hours in between in actual field work.7

In contrast, in the case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner have no choice but to
remain on board its vessel. Although they perform non-agricultural work away from petitioner's business offices, the fact remains that
throughout the duration of their work they are under the effective control and supervision of petitioner through the vessel's patron or
master as the NLRC correctly held. 8

Neither did petitioner gravely abuse its discretion in ruling that private respondent had constructively been dismissed by petitioner.
Such factual finding of both the NLRC and the Labor Arbiter is based not only on the pleadings of the parties but also on a medical
certificate of fitness which, contrary to petitioner's claim private respondent presented when he reported to work on May 28, 1990. 9 As
the NLRC held:

Anent grounds (a) and (b) of the appeal, the respondent, in a nutshell, would like us to believe that the Arbiter
abused his discretion (or seriously erred in his findings of facts) in giving credence to the factual version of the
complainant. But it is settled that "(W)hen confronted with conflicting versions of factual matters," the Labor
Arbiter has the "discretion to determine which party deserves credence on the basis of evidence received." [Gelmart
Industries (Phils.), Inc. vs. Leogardo, 155 SCRA 403, 309, L-70544, November 5, 1987]. And besides, it is settled in
this jurisdiction that "to constitute abandonment of position, there must be concurrence of the intention to abandon
and some overt acts from which it may be inferred that the employee concerned has no more interest in working"
(Dagupan Bus Co., Inc. vs. NLRC, 191 SCRA 328), and that the filing of the complaint which asked for
reinstatement plus backwages (Record, p. 20) is inconsistent with respondents' defense of abandonment (Hua Bee
Shirt Factory vs. NLRC, 188 SCRA 586). 10

It is trite to say that the factual findings of quasi-judicial bodies are generally binding as long as they are supported substantially by
evidence in the record of the case. 11 This is especially so where, as here, the agency and its subordinate who heard the case in the first
instance are in full agreement as to the facts. 12

As regards the labor arbiter's award which was affirmed by respondent NLRC, there is no reason to apply the rule that reinstatement
may not be ordered if, as a result of the case between the parties, their relation is
strained. 13 Even at this late stage of this dispute, petitioner continues to reiterate its offer to reinstate private respondent. 14

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

25
G.R. No. 123938. May 21, 1998.*
LABOR CONGRESS OF THE PHILIPPINES (LCP) for and in behalf of its members, ANA MARIE OCAMPO, MARY
INTAL, ANNABEL CARESO, MARLENE MELQIADES, IRENE JACINTO, NANCY GARCIA, IMELDA SARMIENTO,
LENITA VIRAY, GINA JACINTO, ROSEMARIE DEL ROSARIO, CATHERINE ASPURNA, WINNIE PENA, VIVIAN
BAA, EMILY LAGMAN, LILIAN MARFIL, NANCY DERACO, JANET DERACO, MELODY JACINTO, CAROLYN
DIZON, IMELDA MANALOTO, NORY VIRAY, ELIZA SALAZAR, GIGI MANALOTO, JOSEFINA BASILIO, MARY
ANN MAYATI, ZENAIDA GARCIA, MERLY CANLAS, ERLINDA MANALANG, ANGELINA QUIAMBAO, LANIE
GARCIA, ELVIRA PIEDRA, LOURDES PANLILIO, LUISA PANLILIO, LERIZA PANLILIO, ALMA CASTRO, ALDA
DAVID, MYRA T. OLALIA, MARIFE PINLAC, NENITA DE GUZMAN, JULIE GACAD, EVELYN MANALO, NORA
PATIO, JANETH CARREON, ROWENA MENDOZA, ROWENA MANALO, LENY GARCIA, FELISISIMA PATIO,
SUSANA SALOMON, JOYDEE LANSANGAN, REMEDIOS AGUAS, JEANIE LANSANGAN, ELIZABETH MERCADO,
JOSELYN MANALESE, BERNADETH RALAR, LOLITA ESPIRITU, AGNES SALAS, VIRGINIA MENDIOLA, GLENDA
SALITA, JANETH RALAR, ERLINDA BASILIO, CORA PATIO, ANTONIA CALMA, AGNES CARESO, GEMMA
BONUS, MARITESS OCAMPO, LIBERTY GELISANGA, JANETH MANARANG, AMALIA DELA CRUZ, EVA
_______________
*
 FIRST DIVISION.
510
510  SUPREME COURT REPORTS ANNOTATED 
Labor Congress of the Philippines vs. NLRC
CUEVAS, TERESA MANIAGO, ARCELY PEREZ, LOIDA BIE, ROSITA CANLAS, ANALIZA ESGUERRA, LAILA
MANIAGO, JOSIE MANABAT, ROSARIO DIMATULAC, NYMPA TUAZON, DAIZY TUASON, ERLINDA NAVARRO,
EMILY MANARANG, EMELITA CAYANAN, MERCY CAYANAN, LUZVIMINDA CAYANAN, ANABEL MANALO,
26
SONIA DIZON, ERNA CANLAS, MARIAN BENEDICTA, DOLORES DOLETIN, JULIE DAVID, GRACE VILLANUEVA,
VIRGINIA MAGBAG, CORAZON RILLION, PRECY MANALILI, ELENA RONOZ, IMELDA MENDOZA, EDNA
CANLAS and ANGELA CANLAS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, EMPIRE FOOD
PRODUCTS, its Proprietor/President & Manager, MR. GONZALO KEHYENG and MRS. EVELYN KEHYENG,
respondents.
Labor Law; Dismissals; Abandonment; Burden of proving the existence of just cause for dismissing an employee, such as
abandonment, rests on the employer.—It may likewise be stressed that the burden of proving the existence of just cause for dismissing
an employee, such as abandonment, rests on the employer, a burden private respondents failed to discharge.
Same; Same; Private respondents violated the rights of petitioners to security of tenure and constitutional right to due process
in not even serving them with a written notice of such termination.—Private respondents, moreover, in considering petitioners’
employment to have been terminated by abandonment, violated their rights to security of tenure and constitutional right to due process
in not even serving them with a written notice of such termination. Section 2, Rule XIV, Book V of the Omnibus Rules Implementing
the Labor Code provides: SEC. 2. Notice of Dismissal.—Any employer who seeks to dismiss a worker shall furnish him a written
notice stating the particular acts or omission constituting the grounds for his dismissal. In cases of abandonment of work, the notice
shall be served at the worker’s last known address.
Same; Same; Benefits; Petitioners are therefore entitled to reinstatement with full backwages pursuant to Article 279 of the
Labor Code, as amended by R.A. No. 6715.—Petitioners are therefore entitled to reinstatement with full back wages pursuant to
Article 
511
VOL. 290, MAY 21, 1998  511 
Labor Congress of the Philippines vs. NLRC
279 of the Labor Code, as amended by R.A. No. 6715. Nevertheless, the records disclose that taking into account the number of
employees involved, the length of time that has lapsed since their dismissal, and the perceptible resentment and enmity between
petitioners and private respondents which necessarily strained their relationship, reinstatement would be impractical and hardly
promotive of the best interests of the parties. In lieu of reinstatement then, separation pay at the rate of one month for every year of
service, with a fraction of at least six (6) months of service considered as one (1) year, is in order.
Same; Same; Same; While petitioners’ mode of compensation was on a “per piece basis” the status and nature of their
employment was that of regular employees.—As to the other benefits, namely, holiday pay, premium pay, 13th month pay and service
incentive leave which the labor arbiter failed to rule on but which petitioners prayed for in their complaint, we hold that petitioners are
so entitled to these benefits. Three (3) factors lead us to conclude that petitioners, although piece-rate workers, were regular employees
of private respondents. First, as to the nature of petitioners’ tasks, their job of repacking snack food was necessary or desirable in the
usual business of private respondents, who were engaged in the manufacture and selling of such food products; second, petitioners
worked for private respondents throughout the year, their employment not having been dependent on a specific project or season; and
third, the length of time that petitioners worked for private respondents. Thus, while petitioners’ mode of compensation was on a “per
piece basis,” the status and nature of their employment was that of regular employees.
Same; Same; Same; Petitioners are beyond the ambit of exempted persons and are therefore entitled to overtime pay. —As to
overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I, Book III of the Implementing Rules, workers who are
paid by results including those who are paid on piece-work, takay, pakiao, or task basis, if their output rates are in accordance with the
standards prescribed under Sec. 8, Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary of
Labor in accordance with the aforesaid section, are not entitled to receive overtime pay. Here, private respondents did not allege
adherence to the standards set forth in Sec. 8 nor with the rates prescribed by the Secretary of Labor. As such, petitioners are beyond 
512
512  SUPREME COURT REPORTS ANNOTATED 
Labor Congress of the Philippines vs. NLRC
the ambit of exempted persons and are therefore entitled to overtime pay. Once more, the National Labor Relations Commission
would be in a better position to determine the exact amounts owed petitioners, if any.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
     Armando San Antonio for petitioners.
     Ronald Dylan P. Concepcion and Jesus E.V. Tadiquefor private respondents.

DAVIDE, JR., J.:

In this special civil action for certiorari under Rule 65, petitioners seek to reverse the 29 March 1995 resolution 1 of the National
Labor Relations Commission (NLRC) in NLRC RAB III Case No. 01-1964-91 which affirmed the Decision 2 of Labor Arbiter Ariel
C. Santos dismissing their complaint for utter lack of merit.

The antecedents of this case, as summarized by the Office of the Solicitor General in its Manifestation and Motion in Lieu of
Comment, 3 are as follows:
27
The 99 persons named as petitioners in this proceeding were rank-and-file employees of respondent Empire Food
Products, which hired them on various dates (Paragraph 1, Annex "A" of Petition, Annex "B;" Page 2, Annex "F" of
Petition).

Petitioners filed against private respondents a complaint for payment of money claim[s] and for violation of labor
standard[s] laws (NLRC Case No. RAB-111-10-1817-90). They also filed a petition for direct certification of
petitioner Labor Congress of the Philippines as their bargaining representative (Case No. R0300-9010-RU-005).

On October 23, 1990, petitioners represented by LCP President Benigno B. Navarro, Sr. and private respondents
Gonzalo Kehyeng and Evelyn Kehyeng in behalf of Empire Food Products, Inc. entered into a Memorandum of
Agreement which provided, among others, the following:

1. That in connection with the pending Petition for Direct Certification filed by the Labor Congress with the DOLE,
Management of the Empire Food Products has no objection [to] the direct certification of the LCP Labor Congress
and is now recognizing the Labor Congress of the Philippines (LCP) and its Local Chapter as the SOLE and
EXCLUSIVE Bargaining Agent and Representative for all rank and file employees of the Empire Food Products
regarding "WAGES, HOURS Of WORK, AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT;"

2. That with regards [sic] to NLRC CASE NO. RAB-III-10-1817-90 pending with the NLRC parties jointly and
mutually agreed that the issues thereof, shall be discussed by the parties and resolve[d] during the negotiation of the
Collective Bargaining Agreement;

3. That Management of the Empire Food Products shall make the proper adjustment of the Employees Wages within
fifteen (15) days from the signing of this Agreement and further agreed to register all the employees with the SSS;

4. That Employer, Empire Food Products thru its Management agreed to deduct thru payroll deduction UNION
DUES and other Assessment[s] upon submission by the LCP Labor Congress individual Check-Off Authorization[s]
signed by the Union Members indicating the amount to be deducted and further agreed all deduction[s] made
representing Union Dues and Assessment[s] shall be remitted immediately to the LCP Labor Congress Treasurer or
authorized representative within three (3) or five (5) days upon deductions [sic], Union dues not deducted during the
period due, shall be refunded or reimbursed by the Employer/Management. Employer/Management further agreed to
deduct Union dues from non-union members the same amount deducted from union members without need of
individual Check-Off Authorizations [for] Agency Fee;

5. That in consideration [of] the foregoing covenant, parties jointly and mutually agreed that NLRC CASE NO.
RAB-III-10-1817-90 shall be considered provisionally withdrawn from the Calendar of the National Labor Relations
Commission (NLRC), while the Petition for direct certification of the LCP Labor Congress parties jointly move for
the direct certification of the LCP Labor Congress;

6. That parties jointly and mutually agreed that upon signing of this Agreement, no Harassments [sic], Threats,
Interferences [sic] of their respective rights under the law, no Vengeance or Revenge by each partner nor any act of
ULP which might disrupt the operations of the business;

7. Parties jointly and mutually agreed that pending negotiations or formalization of the propose[d] CBA, this
Memorandum of Agreement shall govern the parties in the exercise of their respective rights involving the
Management of the business and the terms and condition[s] of employment, and whatever problems and grievances
may arise by and between the parties shall be resolved by them, thru the most cordial and good harmonious
relationship by communicating the other party in writing indicating said grievances before taking any action to
another forum or government agencies;

8. That parties [to] this Memorandum of Agreement jointly and mutually agreed to respect, abide and comply with
all the terms and conditions hereof. Further agreed that violation by the parties of any provision herein shall
constitute an act of ULP. (Annex "A" of Petition).

In an Order dated October 24, 1990, Mediator Arbiter Antonio Cortez approved the memorandum of agreement and
certified LCP "as the sole and exclusive bargaining agent among the rank-and-file employee of Empire Food
Products for purposes of collective bargaining with respect to wages, hours of work and other terms and conditions
of employment" (Annex "B" of Petition).

28
 On November 9, 1990, petitioners through LCP President Navarro submitted to private respondents a proposal for
collective bargaining (Annex "C" of Petition).

On January 23, 1991, petitioners filed a complaint docketed as NLRC Case No. RAB-III-01-1964-91 against private
respondents for:

a. Unfair Labor Practice by way of Illegal Lockout and/or Dismissal;

b. Union busting thru Harassments [sic], threats, and interfering with the rights of employees to self-organization;

c. Violation of the Memorandum of Agreement dated October 23, 1990;

d. Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727, such as Wages promulgated by the
Regional Wage Board;

e. Actual, Moral and Exemplary Damages. (Annex "D" of Petition)

After the submission by the parties of their respective position papers and presentation of testimonial evidence,
Labor Arbiter Ariel C. Santos absolved private respondents of the charges of unfair labor practice, union busting,
violation of the memorandum of agreement, underpayment of wages and denied petitioners' prayer for actual, moral
and exemplary damages. Labor Arbiter Santos, however, directed the reinstatement of the individual complainants:

The undersigned Labor Arbiter is not oblivious to the fact that respondents have violated a
cardinal rule in every establishment that a payroll and other papers evidencing hours of work,
payments, etc. shall always be maintained and subjected to inspection and visitation by personnel
of the Department of Labor and Employment. As such penalty, respondents should not escape
liability for this technicality, hence, it is proper that all individual complainants except those who
resigned and executed quitclaim[s] and releases prior to the filing of this complaint should be
reinstated to their former position[s] with the admonition to respondents that any harassment,
intimidation, coercion or any form of threat as a result of this immediately executory
reinstatement shall be dealt with accordingly.

SO ORDERED. (Annex "G" of petition)

On appeal, the National Labor Relations Commission vacated the Decision dated April 14, 1972 [sic] and remanded the case to the
Labor Arbiter for further proceedings for the following reasons:

The Labor Arbiter, through his decision, noted that ". . . complainant did not present any single witness while
respondent presented four (4) witnesses in the persons of Gonzalo Kehyeng, Orlando Cairo, Evelyn Kehyeng and
Elvira Bulagan . . ." (p. 183, Records), that ". . . complainant before the National Labor Relations Commission must
prove with definiteness and clarity the offense charged. . . ." (Record, p. 183); that ". . . complainant failed to specify
under what provision of the Labor Code particularly Art. 248 did respondents violate so as to constitute unfair labor
practice . . ." (Record, p. 183); that "complainants failed to present any witness who may describe in what manner
respondents have committed unfair labor practice . . ." (Record, p. 185); that ". . . complainant LCP failed to present
anyone of the so-called 99 complainants in order to testify who committed the threats and intimidation . . ." (Record,
p. 185).

Upon review of the minutes of the proceedings on record, however, it appears that complainant presented witnesses,
namely, BENIGNO NAVARRO, JR. (28 February 1991, RECORD, p. 91; 8 March 1991, RECORD, p. 92, who
adopted its POSITION PAPER AND CONSOLIDATED AFFIDAVIT, as Exhibit "A" and the annexes thereto as
Exhibit "B", "B-1" to "B-9", inclusive.Minutes of the proceedings on record show that complainant further
presented other witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD, p. 93; LOURDES PANTILLO,
MARIFE PINLAC, LENIE GARCIA (16 April 1991, Record, p. 96, see back portion thereof ; 2 May 1991, Record,
p. 102; 16 May 1991, Record, p. 103, 11 June 1991, Record, p. 105). Formal offer of Documentary and
Testimonial Evidence was made by complainant on June 24, 1991 (Record, p.106-109)

The Labor Arbiter must have overlooked the testimonies of some of the individual complainants which are now on
record. Other individual complainants should have been summoned with the end in view of receiving their
29
 testimonies. The complainants should be afforded the time and opportunity to fully substantiate their claims against
the respondents. Judgment should be rendered only based on the conflicting positions of the parties. The Labor
Arbiter is called upon to consider and pass upon the issues of fact and law raised by the parties.

Toward this end, therefore, it is Our considered view [that] the case should be remanded to the Labor Arbiter of
origin for further proceedings. (Annex "H" of Petition)

In a Decision dated July 27, 1994, Labor Arbiter Santos made the following determination:

Complainants failed to present with definiteness and clarity the particular act or acts constitutive of unfair labor
practice.

It is to be borne in mind that a declaration of unfair labor practice connotes a finding of prima facie evidence of
probability that a criminal offense may have been committed so as to warrant the filing of a criminal information
before the regular court. Hence, evidence which is more than a scintilla is required in order to declare
respondents/employers guilty of unfair labor practice. Failing in this regard is fatal to the cause of complainants.
Besides, even the charge of illegal lockout has no leg to stand on because of the testimony of respondents through
their guard Orlando Cairo (TSN, July 31, 1991 hearing; p. 5-35) that on January 21, 1991, complainants refused and
failed to report for work, hence guilty of abandoning their post without permission from respondents. As a result of
complainants['] failure to report for work, the cheese curls ready for repacking were all spoiled to the prejudice of
respondents. Under cross-examination, complainants failed to rebut the authenticity of respondents' witness
testimony.

As regards the issue of harassments [sic], threats and interference with the rights of employees to self-organization
which is actually an ingredient of unfair labor practice, complainants failed to specify what type of threats or
intimidation was committed and who committed the same. What are the acts or utterances constitutive of
harassments [sic] being complained of? These are the specifics which should have been proven with definiteness
and clarity by complainants who chose to rely heavily on its position paper through generalizations to prove their
case.

Insofar as violation of [the] Memorandum of Agreement dated October 23, 1990 is concerned, both parties agreed
that:

2 — That with regards [sic] to the NLRC Case No. RAB III-10-1817-90 pending with the NLRC,
parties jointly and mutually agreed that the issues thereof shall be discussed by the parties and
resolve[d] during the negotiation of the CBA.

The aforequoted provision does not speak of [an] obligation on the part of respondents but on a resolutory condition
that may occur or may not happen. This cannot be made the basis of an imposition of an obligation over which the
National Labor Relations Commission has exclusive jurisdiction thereof.

Anent the charge that there was underpayment of wages, the evidence points to the contrary. The enumeration of
complainants' wages in their consolidated Affidavits of merit and position paper which implies underpayment has no
leg to stand on in the light of the fact that complainants' admission that they are piece workers or paid on
a pakiao [basis] i.e. a certain amount for every thousand pieces of cheese curls or other products repacked. The only
limitation for piece workers or pakiao workers is that they should receive compensation no less than the minimum
wage for an eight (8) hour work [sic]. And compliance therewith was satisfactorily explained by respondent Gonzalo
Kehyeng in his testimony (TSN, p. 12-30) during the July 31, 1991 hearing. On cross-examination, complainants
failed to rebut or deny Gonzalo Kehyeng's testimony that complainants have been even receiving more than the
minimum wage for an average workers [sic]. Certainly, a lazy worker earns less than the minimum wage but the
same cannot be attributable to respondents but to the lazy workers.

Finally, the claim for moral and exemplary damages has no leg to stand on when no malice, bad faith or fraud was
ever proven to have been perpetuated by respondents.

WHEREFORE, premises considered, the complaint is hereby DISMISSED for utter lack of merit. (Annex "I" of
Petition). 4

30
On appeal, the NLRC, in its Resolution dated 29 March 1995, 5 affirmed in toto the decision of Labor Arbiter Santos. In so doing, the
NLRC sustained the Labor Arbiter's findings that: (a) there was a dearth of evidence to prove the existence of unfair labor practice and
union busting on the part of private respondents; (b) the agreement of 23 October 1990 could not be made the basis of an obligation
within the ambit of the NLRC's jurisdiction, as the provisions thereof, particularly Section 2, spoke of a resolutory condition which
could or could not happen; (c) the claims for underpayment of wages were without basis as complainants were
admittedly "pakiao" workers and paid on the basis of their output subject to the lone limitation that the payment conformed to the
minimum wage rate for an eight-hour workday; and (d) petitioners were not underpaid.

Their motion for reconsideration having been denied by the NLRC in its Resolution of 31 October 1995, 6petitioners filed the instant
special civil action for certiorari raising the following issues:

WHETHER OR NOT THE PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION

GRAVELY ABUSED ITS DISCRETION WHEN IT DISREGARDED OR IGNORED NOT ONLY THE
EVIDENCE FAVORABLE TO HEREIN PETITIONERS, APPLICABLE JURISPRUDENCE BUT ALSO ITS
OWN DECISIONS AND THAT OF THIS HONORABLE HIGHEST TRIBUNAL WHICH [WAS]
TANTAMOUNT NOT ONLY TO THE DEPRIVATION OF PETITIONERS' RIGHT TO DUE PROCESS BUT
WOULD RESULT [IN] MANIFEST INJUSTICE.

II

WHETHER OR NOT THE PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION WHEN IT
DEPRIVED THE PETITIONERS OF THEIR CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION,
SECURITY OF TENURE, PROTECTION TO LABOR, JUST AND HUMANE CONDITIONS OF WORK AND
DUE PROCESS.

III

WHETHER OR NOT THE PETITIONERS WERE ILLEGALLY EASED OUT [OF] OR CONSTRUCTIVELY
DISMISSED FROM THEIR ONLY MEANS OF LIVELIHOOD.

IV

WHETHER OR NOT PETITIONERS SHOULD BE REINSTATED FROM THE DATE OF THEIR DISMISSAL
UP TO THE TIME OF THEIR REINSTATEMENT, WITH BACKWAGES, STATUTORY BENEFITS,
DAMAGES AND ATTORNEY'S FEES. 7

We required respondents to file their respective Comments.

In their Manifestation and Comment, private respondents asserted that the petition was filed out of time. As petitioners admitted in
their Notice to File Petition for Review on Certiorari that they received a copy of the resolution (denying their motion for
reconsideration) on 13 December 1995, they had only until 29 December 1995 to file the petition. Having failed to do so, the NLRC
thus already entered judgment in private respondents' favor.

In their Reply, petitioners averred that Mr. Navarro, a non-lawyer who filed the notice to file a petition for review on their behalf,
mistook which reglementary period to apply. Instead of using the "reasonable time" criterion for certiorari under Rule 65, he used the
15-day period for petitions for review on certiorari under Rule 45. They hastened to add that such was a mere technicality which
should not bar their petition from being decided on the merits in furtherance of substantial justice, especially considering that
respondents neither denied nor contradicted the facts and issues raised in the petition.

In its Manifestation and Motion in Lieu of Comment, the Office of the Solicitor General (OSG) sided with petitioners. It pointed out
that the Labor Arbiter, in finding that petitioners abandoned their jobs, relied solely on the testimony of Security Guard Rolando Cairo
that petitioners refused to work on 21 January 1991, resulting in the spoilage of cheese curls ready for repacking. However, the OSG
argued, this refusal to report for work for a single day did not constitute abandonment, which pertains to a clear, deliberate and
unjustified refusal to resume employment, and not mere absence. In fact, the OSG stressed, two days after allegedly abandoning their
work, petitioners filed a complaint for, inter alia, illegal lockout or illegal dismissal. Finally, the OSG questioned the lack of
explanation on the part of Labor Arbiter Santos as to why he abandoned his original decision to reinstate petitioners.
31
In view of the stand of the OSG, we resolved to require the NLRC to file its own Comment.

In its Comment, the NLRC invokes the general rule that factual findings of an administrative agency bind a reviewing court and
asserts that this case does not fall under the exceptions. The NLRC further argues that grave abuse of discretion may not be imputed to
it, as it affirmed the factual findings and legal conclusions of the Labor Arbiter only after carefully reviewing, weighing and
evaluating the evidence in support thereof, as well as the pertinent provisions of law and jurisprudence.

In their Reply, petitioners claim that the decisions of the NLRC and the Labor Arbiter were not supported by substantial evidence; that
abandonment was not proved; and that much credit was given to self-serving statements of Gonzalo Kehyeng, owner of Empire
Foods, as to payment of just wages.

On 7 July 1997, we gave due course to the petition and required the parties to file their respective memoranda. However, only
petitioners and private respondents filed their memoranda, with the NLRC merely adopting its Comment as its Memorandum.

We find for petitioners.

Invocation of the general rule that factual findings of the NLRC bind this Court is unavailing under the circumstances. Initially, we are
unable to discern any compelling reason justifying the Labor Arbiter's volte face from his 14 April 1992 decision reinstating
petitioners to his diametrically opposed 27 July 1994 decision, when in both instances, he had before him substantially the same
evidence. Neither do we find the 29 March 1995 NLRC resolution to have sufficiently discussed the facts so as to comply with the
standard of substantial evidence. For one thing, the NLRC confessed its reluctance to inquire into the veracity of the Labor Arbiter's
factual findings, staunchly declaring that it was "not about to substitute [its] judgment on matters that are within the province of the
trier of facts." Yet, in the 21 July 1992 NLRC resolution, 8 it chastised the Labor Arbiter for his errors both in judgment and
procedure; for which reason it remanded the records of the case to the Labor Arbiter for compliance with the pronouncements therein.

What cannot escape from our attention is that the Labor Arbiter did not heed the observations and pronouncements of the NLRC in its
resolution of 21 July 1992, neither did he understand the purpose of the remand of the records to him. In said resolution, the NLRC
summarized the grounds for the appeal to be:

1. that there is a prima facie evidence of abuse of discretion and acts of gross incompetence committed by the Labor
Arbiter in rendering the decision.

2. that the Labor Arbiter in rendering the decision committed serious errors in the findings of facts.

After which, the NLRC observed and found:

Complainant alleged that the Labor Arbiter disregarded the testimonies of the 99 complainants who submitted their
Consolidated Affidavit of Merit and Position Paper which was adopted as direct testimonies during the hearing and
cross-examined by respondents' counsel.

The Labor Arbiter, through his decision, noted that ". . . complainant did not present any single witness while
respondent presented four (4) witnesses in the persons of Gonzalo Kehyeng, Orlando Cairo, Evelyn Kehyeng and
Elvira Bulagan . . ." (Records, p. 183), that ". . . complainant before the National Labor Relations Commission must
prove with definiteness and clarity the offense charged. . . ." (Record, p. 183; that ". . . complainant failed to specify
under what provision of the Labor Code particularly Art. 248 did respondents violate so as to constitute unfair labor
practice . . ." (Record, p. 183); that "complainants failed to present any witness who may describe in what manner
respondents have committed unfair labor practice . . ." (Record, p. 185); that ". . . complainant a [sic] LCP failed to
present anyone of the so called 99 complainants in order to testify who committed the threats and intimidation . . ."
(Record, p.185).

Upon review of the minutes of the proceedings on record, however, it appears that complainant presented witnesses,
namely BENIGNO NAVARRO, JR. (28 February 1991, RECORD, p. 91; 8 March 1991, RECORD, p. 92), who
adopted its POSITION PAPER AND CONSOLIDATED AFFIDAVIT as Exhibit A and the annexes thereto as
Exhibit B, B-1 to B-9, inclusive. Minutes of the proceedings on record show that complainant further presented
other witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD, p. 93; LOURDES PANTILLO,
MARIFE PINLAC, LENI GARCIA (16 April 1991, Record, p. 96, see back portion thereof; 2 May 1991, Record, p.
102; 16 May 1991, Record, p. 103; 11 June 1991, Record, p. 105). Formal offer of Documentary and Testimonial
Evidence was made by the complainant on June 24, 1991 (Record, p.106-109).

32
 The Labor Arbiter must have overlooked the testimonies of some of the individual complainants which are now on
record. Other individual complainants should have been summoned with the end in view of receiving their
testimonies. The complainants should [have been] afforded the time and opportunity to fully substantiate their
claims against the respondents. Judgment should [have been] rendered only based on the conflicting positions of the
parties. The Labor Arbiter is called upon to consider and pass upon the issues of fact and law raised by the parties.

Toward this end, therefore, it is Our considered view the case should be remanded to the Labor Arbiter of origin for
further proceedings.

Further, We take note that the decision does not contain a dispositive portion or fallo. Such being the case, it may be
well said that the decision does not resolve the issues at hand. On another plane, there is no portion of the decision
which could be carried out by way of execution.

It may be argued that the last paragraph of the decision may be categorized as the dispositive portion thereof:

x x x           x x x          x x x

The undersigned Labor Arbiter is not oblivious [to] the fact that respondents have violated a
cardinal rule in every establishment that a payroll and other papers evidencing hour[s] of work,
payment, etc. shall always be maintained and subjected to inspection and visitation by personnel
of the Department of Labor and Employment. As such penalty, respondents should not escape
liability for this technicality, hence, it is proper that all the individual complainants except those
who resigned and executed quitclaim[s] and release[s] prior to the filing of this complaint should
be reinstated to their former position with the admonition to respondents that any harassment,
intimidation, coercion or any form of threat as a result of this immediately executory reinstatement
shall be dealt with accordingly.

SO ORDERED.

It is Our considered view that even assuming arguendo that the respondents failed to maintain their payroll and other
papers evidencing hours of work, payment etc., such circumstance, standing alone, does not warrant the directive to
reinstate complainants to their former positions. It is [a] well settled rule that there must be a finding of illegal
dismissal before reinstatement be mandated.

In this regard, the LABOR ARBITER is hereby directed to include in his clarificatory decision, after receiving
evidence, considering and resolving the same, the requisite dispositive portion.9

Apparently, the Labor Arbiter perceived that if not for petitioners, he would not have fallen victim to this stinging rebuke at the hands
of the NLRC. Thus does it appear to us that the Labor Arbiter, in concluding in his 27 July 1994 Decision that petitioners abandoned
their work, was moved by, at worst, spite, or at best, lackadaisically glossed over petitioner's evidence. On this score, we find the
following observations of the OSG most persuasive:

In finding that petitioner employees abandoned their work, the Labor Arbiter and the NLRC relied on the testimony
of Security Guard Rolando Cairo that on January 21, 1991, petitioners refused to work. As a result of their failure to
work, the cheese curls ready for repacking on said date were spoiled.

The failure to work for one day, which resulted in the spoilage of cheese curls does not amount to abandonment of
work. In fact two (2) days after the reported abandonment of work or on January 23, 1991, petitioners filed a
complaint for, among others, unfair labor practice, illegal lockout and/or illegal dismissal. In several cases, this
Honorable Court held that "one could not possibly abandon his work and shortly thereafter vigorously pursue his
complaint for illegal dismissal (De Ysasi III v. NLRC, 231 SCRA 173; Ranara v. NLRC, 212 SCRA 631; Dagupan
Bus Co. v. NLRC, 191 SCRA 328; Atlas Consolidated Mining and Development Corp. v. NLRC, 190 SCRA 505;
Hua Bee Shirt Factory v. NLRC, 186 SCRA 586; Mabaylan v. NLRC, 203 SCRA 570 and Flexo Manufacturing v.
NLRC, 135 SCRA 145). In Atlas Consolidated, supra, this Honorable Court explicitly stated:

It would be illogical for Caballo, to abandon his work and then immediately file an action seeking
for his reinstatement. We can not believe that Caballo, who had worked for Atlas for two years
and ten months, would simply walk away from his job unmindful of the consequence of his

33
 act. i.e. the forfeiture of his accrued employment benefits. In opting to finally to [sic] contest the
legality of his dismissal instead of just claiming his separation pay and other benefits, which he
actually did but which proved to be futile after all, ably supports his sincere intention to return to
work, thus negating Atlas' stand that he had abandoned his job.

In De Ysasi III v. NLRC (supra), this Honorable Court stressed that it is the clear, deliberate and unjustified refusal
to resume employment and not mere absence that constitutes abandonment. The absence of petitioner employees for
one day on January 21, 1991 as testified [to] by Security Guard Orlando Cairo did not constitute abandonment.

In his first decision, Labor Arbiter Santos expressly directed the reinstatement of the petitioner employees and
admonished the private respondents that "any harassment, intimidation, coercion or any form of threat as a result of
this immediately executory reinstatement shall be dealt with accordingly.

In his second decision, Labor Arbiter Santos did not state why he was abandoning his previous decision directing the
reinstatement of petitioner employees.

By directing in his first decision the reinstatement of petitioner employees, the Labor Arbiter impliedly held that
they did not abandon their work but were not allowed to work without just cause.

That petitioner employees are "pakyao" or piece workers does not imply that they are not regular employees entitled
to reinstatement. Private respondent Empire Food Products, Inc. is a food and fruit processing company. In Tabas
v. California Manufacturing Co., Inc. (169 SCRA 497), this Honorable Court held that the work of merchandisers
of processed food, who coordinate with grocery stores and other outlets for the sale of the processed food is
necessary in the day-to-day operation[s] of the company. With more reason, the work of processed food repackers is
necessary in the day-to-day operation[s] of respondent Empire Food Products. 10

It may likewise be stressed that the burden of proving the existence of just cause for dismissing an employee, such as abandonment,
rests on the employer, 11 a burden private respondents failed to discharge.

Private respondents, moreover, in considering petitioners' employment to have been terminated by abandonment, violated their rights
to security of tenure and constitutional right to due process in not even serving them with a written notice of such
termination. 12 Section 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code provides:

Sec. 2. Notice of Dismissal — Any employer who seeks to dismiss a worker shall furnish him a written notice
stating the particular acts or omission constituting the grounds for his dismissal. In cases of abandonment of work,
the notice shall be served at the worker's last known address.

Petitioners are therefore entitled to reinstatement with full back wages pursuant to Article 279 of the Labor Code, as amended by R.A.
No. 6715. Nevertheless, the records disclose that taking into account the number of employees involved, the length of time that has
lapsed since their dismissal, and the perceptible resentment and enmity between petitioners and private respondents which necessarily
strained their relationship, reinstatement would be impractical and hardly promotive of the best interests of the parties. In lieu of
reinstatement then, separation pay at the rate of one month for every year of service, with
a fraction of at least six (6) months of service considered as one (1) year, is in order. 13

That being said, the amount of back wages to which each petitioner is entitled, however, cannot be fully settled at this time.
Petitioners, as piece-rate workers having been paid by the piece, 14 there is need to determine the varying degrees of production and
days worked by each worker. Clearly, this issue is best left to the National Labor Relations Commission.

As to the other benefits, namely, holiday pay, premium pay, 13th month pay and service incentive leave which the labor arbiter failed
to rule on but which petitioners prayed for in their complaint, 15 we hold that petitioners are so entitled to these benefits. Three (3)
factors lead us to conclude that petitioners, although piece-rate workers, were regular employees of private respondents. First, as to the
nature of petitioners' tasks, their job of repacking snack food was necessary or desirable in the usual business of private respondents,
who were engaged in the manufacture and selling of such food products; second, petitioners worked for private respondents
throughout the year, their employment not having been dependent on a specific project or season; and third, the length of time 16 that
petitioners worked for private respondents. Thus, while petitioners' mode of compensation was on a "per piece basis," the status and
nature of their employment was that of regular employees.

34
The Rules Implementing the Labor Code exclude certain employees from receiving benefits such as nighttime pay, holiday pay,
service incentive leave 17 and 13th month pay, 18 inter alia, "field personnel and other employees whose time and performance is
unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis, or those who are
paid a fixed amount for performing work irrespective of the time consumed in the performance thereof." Plainly, petitioners as piece-
rate workers do not fall within this group. As mentioned earlier, not only did petitioners labor under the control of private respondents
as their employer, likewise did petitioners toil throughout the year with the fulfillment of their quota as supposed basis for
compensation. Further, in Section 8 (b), Rule IV, Book III which we quote hereunder, piece workers are specifically mentioned as
being entitled to holiday pay.

Sec. 8. Holiday pay of certain employees. —

(b) Where a covered employee is paid by results or output, such as payment on

piece work, his holiday pay shall not be less than his average daily earnings for
the last seven (7) actual working days preceding the regular holiday: Provided,
however, that in no case shall the holiday pay be less than the applicable
statutory minimum wage rate.

In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law, in view of the modifications to P.D. No.
851 19 by Memorandum Order No. 28, clearly exclude the employer of piece rate workers from those exempted from paying 13th
month pay, to wit:

2. EXEMPTED EMPLOYERS

The following employers are still not covered by P.D. No. 851:

d. Employers of those who are paid on purely commission, boundary or task

basis, and those who are paid a fixed amount for performing specific work,
irrespective of the time consumed in the performance thereof, except where the
workers are paid on piece-rate basis in which case the employer shall grant the
required 13th month pay to such workers. (emphasis supplied)

The Revised Guidelines as well as the Rules and Regulations identify those workers who fall under the piece-rate category as
those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated,
without regard to the time spent in producing the same. 20

As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I, Book III of the Implementing Rules, workers who
are paid by results including those who are paid on piece-work, takay,pakiao, or task basis, if their output rates are in accordance with
the standards prescribed under Sec. 8, Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary of
Labor in accordance with the aforesaid section, are not entitled to receive overtime pay. Here, private respondents did not allege
adherence to the standards set forth in Sec. 8 nor with the rates prescribed by the Secretary of Labor. As such, petitioners are beyond
the ambit of exempted persons and are therefore entitled to overtime pay. Once more, the National Labor Relations Commission
would be in a better position to determine the exact amounts owed petitioners, if any.

As to the claim that private respondents violated petitioners' right to self-organization, the evidence on record does not support this
claim. Petitioners relied almost entirely on documentary evidence which, per se, did not prove any wrongdoing on private
respondents' part. For example, petitioners presented their complaint 21 to prove the violation of labor laws committed by private
respondents. The complaint, however, is merely "the pleading alleging the plaintiff's cause or causes of action." 22 Its contents are
merely allegations, the verity of which shall have to be proved during the trial. They likewise offered their Consolidated Affidavit of
Merit and Position Paper 23 which, like the offer of their Complaint, was a tautological exercise, and did not help nor prove their cause.
In like manner, the petition for certification election 24 and the subsequent order of certification 25 merely proved that petitioners
sought and acquired the status of bargaining agent for all rank-and-file employees. Finally, the existence of the memorandum of
agreement 26 offered to substantiate private respondents' non-compliance therewith, did not prove either compliance or non-
compliance, absent evidence of concrete, overt acts in contravention of the provisions of the memorandum.

IN VIEW WHEREOF, the instant petition is hereby GRANTED. The Resolution of the National Labor Relations Commission of 29
March 1995 and the Decision of the Labor Arbiter of 27 July 1994 in NLRC Case No. RAB-III-01-1964-91 are hereby SET ASIDE,
and another is hereby rendered:

35
 1. DECLARING petitioners to have been illegally dismissed by private respondents, thus entitled
to full back wages and other privileges, and separation pay in lieu of reinstatement at the rate of
one month's salary for every year of service with a fraction of six months of service considered as
one year;

2. REMANDING the records of this case to the National Labor Relations Commission for its
determination of the back wages and other benefits and separation pay, taking into account the
foregoing observations; and

3. DIRECTING the National Labor Relations Commission to resolve the referred issues within
sixty (60) days from its receipt of a copy of this decision and of the records of the case and to
submit to this Court a report of its compliance hereof within ten (10) days from the rendition of its
resolution.

Costs against private respondents.

SO ORDERED.

36
 G.R. No. 195466. July 2, 2014.*
ARIEL L. DAVID, doing business under the name and style “YIELS HOG DEALER,” petitioner, vs. JOHN G. MACASIO,
respondent.
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; In this Rule 45 petition for review on certiorari of
the Court of Appeals’ (CA’s) decision rendered under a Rule 65 proceeding, the Supreme Court’s (SC’s) power of review is limited to
resolving matters pertaining to any perceived legal errors that the CA may have committed in issuing the assailed decision. —In this
Rule 45 petition for review on certiorari of the CA’s decision rendered under a Rule 65 proceeding, this Court’s power of review is
limited to resolving matters pertaining to any perceived legal errors that the CA may have committed in issuing the assailed decision.
This is in contrast with the review for jurisdictional errors, which we undertake in an original  certiorari action. In reviewing the legal
correctness of the CA decision, we examine the CA decision based on how it determined the presence or absence of grave abuse of
discretion in the NLRC
_______________
* SECOND DIVISION.
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68 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
decision before it and not on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we
have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it.
Labor Law; Pakyaw Basis; Engagement on “pakyaw” or task basis does not characterize the relationship that may exist
between the parties, i.e., whether one of employment or independent contractorship.—Engagement on “pakyaw” or task basis does not
characterize the relationship that may exist between the parties, i.e., whether one of employment or independent contractorship.
Article 97(6) of the Labor Code defines wages as “x x x the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for
work done or to be done, or for services rendered or to be rendered[.]” In relation to Article 97(6), Article 101 of the Labor Code
speaks of workers paid by results or those whose pay is calculated in terms of the quantity or quality of their work output which
includes “pakyaw” work and other non-time work.
Same; Employer-Employee Relationship; Elements of.—To determine the existence of an employer-employee relationship, four
elements generally need to be considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employee’s conduct. These elements or indicators comprise the so-called
“four-fold” test of employment relationship. Macasio’s relationship with David satisfies this test.
Same; Pakyaw Basis; A distinguishing characteristic of “pakyaw” or task basis engagement, as opposed to straight-hour wage
payment, is the non-consideration of the time spent in working.—A distinguishing characteristic of “pakyaw” or task basis
engagement, as opposed to straight-hour wage payment, is the non-consideration of the time spent in working. In a task-basis work,
the emphasis is on the task itself, in the sense that payment is reckoned in terms of completion of the work, not in terms of the number
of time spent in the completion of work. Once the work or task is completed, the
69
VOL. 729, JULY 2, 2014 69
David vs. Macasio
worker receives a fixed amount as wage, without regard to the standard measurements of time generally used in pay
computation.
Same; Holiday Pay; Service Incentive Leave Pay; Field Personnel; Under the Implementing Rules and Regulations (IRR),
exemption from the coverage of holiday and Service Incentive Leave (SIL) pay refer to “field personnel and other employees whose
time and performance is unsupervised by the employer including those who are engaged on task or contract basis.”—The general
rule is that holiday and SIL pay provisions cover all employees. To be excluded from their coverage, an employee must be one of

37
those that these provisions expressly exempt, strictly in accordance with the exemption. Under the IRR, exemption from the coverage
of holiday and SIL pay refer to “field personnel and other employees whose time and performance is unsupervised by the employer
including those who are engaged on task or contract basis[.]” Note that unlike Article 82 of the Labor Code, the IRR on holiday and
SIL pay do not exclude employees “engaged on task basis” as a separate and distinct category from employees classified as “field
personnel.” Rather, these employees are altogether merged into one classification of exempted employees. Because of this difference,
it may be argued that the Labor Code may be interpreted to mean that those who are engaged on task basis,  per se, are excluded from
the SIL and holiday payment since this is what the Labor Code provisions, in contrast with the IRR, strongly suggest. The arguable
interpretation of this rule may be conceded to be within the discretion granted to the LA and NLRC as the quasi-judicial bodies with
expertise on labor matters.
Same; Same; Same; Same; Pakyaw Basis; The payment of an employee on task or pakyaw basis alone is insufficient to exclude
one from the coverage of Service Incentive Leave (SIL) and holiday pay.—The payment of an employee on task or pakyaw basis alone
is insufficient to exclude one from the coverage of SIL and holiday pay. They are exempted from the coverage of Title I (including the
holiday and SIL pay) only if they qualify as “field personnel.” The IRR therefore validly qualifies and limits the general exclusion of
“workers paid by results” found in Article 82 from the coverage of holiday and SIL pay. This is the only reasonable interpretation
since the determination of excluded workers who are paid by results from the coverage of Title I is “determined by the Secretary of
Labor in appropriate regulations.”
70
70 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
Same; Same; Same; Same; In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and
Service Incentive Leave (SIL) pay, the presence (or absence) of employer supervision as regards the worker’s time and performance
is the key.—In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and SIL pay, the presence (or
absence) of employer supervision as regards the worker’s time and performance is the key: if the worker is simply engaged
on pakyaw or task basis, then the general rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions
specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code. However, if the worker engaged
on pakyaw or task basis also falls within the meaning of “field personnel” under the law, then he is not entitled to these monetary
benefits.
Same; 13th Month Pay; As with holiday and service incentive leave pay, 13 th month pay benefits generally cover all employees;
an employee must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations Implementing
Presidential Decree (P.D.) No. 851 enumerates the exemptions from the coverage of 13th month pay benefits.—The governing law on
13th month pay is PD No. 851. As with holiday and SIL pay, 13th month pay benefits generally cover all employees; an employee
must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations Implementing P.D. No. 851
enumerates the exemptions from the coverage of 13th month pay benefits. Under Section 3(e), “employers of those who are paid on
x x x task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the
performance thereof” are exempted. Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules
and Regulations Implementing PD No. 851 exempts employees “paid on task basis” without any reference to “field personnel.” This
could only mean that insofar as payment of the 13th month pay is concerned, the law did not intend to qualify the exemption from its
coverage with the requirement that the task worker be a “field personnel” at the same time.  
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
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David vs. Macasio
  Chan & Associates Law Office for petitioner.
  Cezar F. Maravilla for respondent. 
BRION, J.:
We resolve in this petition for review on certiorari 1 the challenge to the November 22, 2010 decision 2 and the January 31, 2011
resolution3 of the Court of Appeals (CA) in C.A.-G.R. S.P. No. 116003. The CA decision annulled and set aside the May 26, 2010
decision4 of the National Labor Relations Commission (NLRC)5 which, in turn, affirmed the April 30, 2009 decision 6 of the Labor
Arbiter (LA). The LA’s decision dismissed respondent John G. Macasio’s monetary claims.
The Factual Antecedents
In January 2009, Macasio filed before the LA a complaint 7 against petitioner Ariel L. David, doing business under the name and
style “Yiels Hog Dealer,” for nonpayment of overtime pay, holiday pay and 13thmonth pay. He also claimed payment for moral
and exemplary damages and attorney’s fees. Macasio also claimed payment for service incentive leave (SIL).8 
_______________
1 Rollo, pp. 8-30.
2 Penned by Associate Justice Celia C. Librea-Leagogo, and concurred in by Associate Justices Remedios A. Salazar-Fernando
and Michael P. Elbinias;  id., at pp. 32-46.
3 Id., at pp. 47-48.

38
 4 Penned by Presiding Commissioner Herminio V. Suelo; id., at pp. 150-156.
5 In NLRC LAC No. 07-002073-09 (NLRC NCR Case No. 01-00298-09).
6 Penned by Labor Arbiter Daniel J. Cajilig; id., at pp. 119-122.
7 Id., at pp. 61-63.
8 Filed on February 18, 2009; id., at pp. 64-75.
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72 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
Macasio alleged9 before the LA that he had been working as a butcher for David since January 6, 1995. Macasio claimed that
David exercised effective control and supervision over his work, pointing out that David: (1) set the work day, reporting time and hogs
to be chopped, as well as the manner by which he was to perform his work; (2) daily paid his salary of P700.00, which was increased
from P600.00 in 2007, P500.00 in 2006 and P400.00 in 2005; and (3) approved and disapproved his leaves. Macasio added that David
owned the hogs delivered for chopping, as well as the work tools and implements; the latter also rented the workplace. Macasio
further claimed that David employs about twenty-five (25) butchers and delivery drivers. In his defense, 10 David claimed that he
started his hog dealer business in 2005 and that he only has ten employees. He alleged that he hired Macasio as a butcher or chopper
on “pakyaw” or task basis who is, therefore, not entitled to overtime pay, holiday pay and 13th month pay pursuant to the provisions
of the Implementing Rules and Regulations (IRR) of the Labor Code. David pointed out that Macasio: (1) usually starts his work at
10:00 p.m. and ends at 2:00 a.m. of the following day or earlier, depending on the volume of the delivered hogs; (2) received the fixed
amount of P700.00 per engagement, regardless of the actual number of hours that he spent chopping the delivered hogs; and (3) was
not engaged to report for work and, accordingly, did not receive any fee when no hogs were delivered.
Macasio disputed David’s allegations.11 He argued that, first, David did not start his business only in 2005. He pointed to the
Certificate of Employment12 that David issued in his favor which placed the date of his employment, albeit errone-
_______________

9  Ibid.
10 Position Paper filed on February 18, 2009; id., at pp. 80-86.
11 Reply by the Complainant; id., at pp. 87-91.
12 Id., at p. 76.
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VOL. 729, JULY 2, 2014 73
David vs. Macasio
ously, in January 2000. Second, he reported for work every day which the payroll or time record could have easily proved had David
submitted them in evidence.
Refuting Macasio’s submissions,13 David claims that Macasio was not his employee as he hired the latter on “pakyaw” or task basis.
He also claimed that he issued the Certificate of Employment, upon Macasio’s request, only for overseas employment purposes. He
pointed to the “Pinagsamang Sinumpaang Salaysay,”14 executed by Presbitero Solano and Christopher (Antonio Macasio’s co-
butchers), to corroborate his claims. In the April 30, 2009 decision, 15 the LA dismissed Macasio’s complaint for lack of merit. The LA
gave credence to David’s claim that he engaged Macasio on “pakyaw” or task basis. The LA noted the following facts to support this
finding: (1) Macasio received the fixed amount of P700.00 for every work done, regardless of the number of hours that he spent in
completing the task and of the volume or number of hogs that he had to chop per engagement; (2) Macasio usually worked for only
four hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following day; and (3) the P700.00 fixed wage far exceeds the then
prevailing daily minimum wage of P382.00. The LA added that the nature of David’s business as hog dealer supports this “pakyaw”
or task basis arrangement.
The LA concluded that as Macasio was engaged on “pakyaw” or task basis, he is not entitled to overtime, holiday, SIL and 13th
month pay.
_______________

13 Respondent’s Reply; id., at pp. 92-96.

14 Id., at pp. 99-100.
15 Supra note 5.
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74 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
The NLRC’s Ruling
In its May 26, 2010 decision,16 the NLRC affirmed the LA ruling.17 The NLRC observed that David did not require Macasio to
observe an eight-hour work schedule to earn the fixed P700.00 wage; and that Macasio had been performing a non-time work,
pointing out that Macasio was paid a fixed amount for the completion of the assigned task, irrespective of the time consumed in its
performance. Since Macasio was paid by result and not in terms of the time that he spent in the workplace, Macasio is not covered by
39
the Labor Standards laws on overtime, SIL and holiday pay, and 13 th month pay under the Rules and Regulations Implementing the
13th month pay law.18Macasio moved for reconsideration 19 but the NLRC denied his motion in its August 11, 2010
resolution,20 prompting Macasio to elevate his case to the CA via a petition for certiorari.21
The CA’s Ruling
In its November 22, 2010 decision, 22 the CA partly granted Macasio’s certiorari petition and reversed the NLRC’s ruling for
having been rendered with grave abuse of discretion.
While the CA agreed with the LA and the NLRC that Macasio was a task basis employee, it nevertheless found Macasio entitled
to his monetary claims following the doctrine
16 Supra note 4.
17 Rollo, pp. 123-139.
18 Presidential Decree No. 851 – ““Requiring All Employers to Pay Their Employees a 13 th Month Pay.” Enacted on December
16, 1975.
19 Rollo, pp. 160-176.
20 Id., at pp. 157-159.
21 Id., at pp. 180-204.
22 Supra note 2.
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David vs. Macasio
laid down in Serrano v. Severino Santos Transit.23 The CA explained that as a task basis employee, Macasio is excluded from the
coverage of holiday, SIL and 13th month pay only if he is likewise a “field personnel.” As defined by the Labor Code, a “field
personnel” is one who performs the work away from the office or place of work and whose regular work hours cannot be determined
with reasonable certainty. In Macasio’s case, the elements that characterize a “field personnel” are evidently lacking as he had been
working as a butcher at David’s “Yiels Hog Dealer” business in Sta. Mesa, Manila under David’s supervision and control, and for a
fixed working schedule that starts at 10:00 p.m.
Accordingly, the CA awarded Macasio’s claim for holiday, SIL and 13th month pay for three years, with 10% attorney’s fees on
the total monetary award. The CA, however, denied Macasio’s claim for moral and exemplary damages for lack of basis.
David filed the present petition after the CA denied his motion for reconsideration 24 in the CA’s January 31, 2011 resolution.25
The Petition
In this petition,26 David maintains that Macasio’s engagement was on a “pakyaw” or task basis. Hence, the latter is excluded from
the coverage of holiday, SIL and 13th month pay.
David reiterates his submissions before the lower tribunals27 and adds that he never had any control over the
_______________

23 G.R. No. 187698, August 9, 2010, 627 SCRA 483.

24 Rollo, pp. 49-56.
25 Supra note 3.
26 Supra note 1.
27 Although he now claims that he engaged Macasio’s services in 2000 instead of 2005.
76
76 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
manner by which Macasio performed his work and he simply looked on to the “end-result.” He also contends that he never compelled
Macasio to report for work and that under their arrangement, Macasio was at liberty to choose whether to report for work or not as
other butchers could carry out his tasks. He points out that Solano and Antonio had, in fact, attested to their (David and Macasio’s)
established “pakyawan” arrangement that rendered a written contract unnecessary. In as much as Macasio is a task basis employee —
who is paid the fixed amount of P700.00 per engagement regardless of the time consumed in the performance — David argues that
Macasio is not entitled to the benefits he claims. Also, he posits that because he engaged Macasio on “ pakyaw” or task basis then no
employer-employee relationship exists between them.
Finally, David argues that factual findings of the LA, when affirmed by the NLRC, attain finality especially when, as in this case,
they are supported by substantial evidence. Hence, David posits that the CA erred in reversing the labor tribunals’ findings and
granting the prayed monetary claims.
The Case for the Respondent
Macasio counters that he was not a task basis employee or a “field personnel” as David would have this Court believe. 28 He
reiterates his arguments before the lower tribunals and adds that, contrary to David’s position, the P700.00 fee that he was paid for
each day that he reported for work does not indicate a “pakyaw” or task basis employment as this amount was paid daily, regardless of
the number or pieces of hogs that he had to chop. Rather, it indicates a daily-wage method of payment and affirms his regular

40
employment status. He points out that David did not allege or present any evidence as regards the quota or number of hogs that he had
to chop as
_______________

28 Rollo, pp. 223-243.

77
VOL. 729, JULY 2, 2014 77
David vs. Macasio
basis for the “pakyaw” or task basis payment; neither did David present the time record or payroll to prove that he worked for less than
eight hours each day. Moreover, David did not present any contract to prove that his employment was on task basis. As David failed to
prove the alleged task basis or “pakyawan” agreement, Macasio concludes that he was David’s employee.
Procedurally, Macasio points out that David’s submissions in the present petition raise purely factual issues that are not proper for
a petition for review on certiorari. These issues — whether he (Macasio) was paid by result or on “pakyaw” basis; whether he was a
“field personnel”; whether an employer-employee relationship existed between him and David; and whether David exercised control
and supervision over his work — are all factual in nature and are, therefore, proscribed in a Rule 45 petition. He argues that the CA’s
factual findings bind this Court, absent a showing that such findings are not supported by the evidence or the CA’s judgment was
based on a misapprehension of facts. He adds that the issue of whether an employer-employee relationship existed between him and
David had already been settled by the LA29 and the NLRC30 (as well as by the CA per Macasio’s manifestation before this Court
dated November 15, 2012),31 in his favor, in the separate illegal case that he filed against David.
_______________

29 Docketed as NLRC OFW Case No. 06-09181-09. Decision dated January 27, 2010; id., at pp. 260-266.
30 Docketed as LAC No. 03-000566-10(3)(8)(T-7-10). Resolution dated November 12, 2010; id., at pp. 267-272.
31 Id., at pp. 334-338. The CA decision dated November 6, 2012 in C.A.-G.R. S.P. No. 118736 affirmed the LA and NLRC
rulings in the illegal dismissal case (Rollo, pp. 340-346). On May 6, 2013, David assailed the CA’s decision in C.A.-G.R. S.P. No.
118736 before this Court via a petition for certiorari. The case was docketed as G.R. No. 206735. In a Resolution dated July 15, 2013,
the Court dismissed David’s petition for being a wrong remedy and for failure to show any grave abuse of discretion in the assailed
CA decision.
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The Issue
The issue revolves around the proper application and interpretation of the labor law provisions on holiday, SIL and 13 th month pay
to a worker engaged on “pakyaw” or task basis. In the context of the Rule 65 petition before the CA, the issue is whether the CA
correctly found the NLRC in grave abuse of discretion in ruling that Macasio is entitled to these labor standards benefits.
The Court’s Ruling
We partially grant the petition.
Preliminary considerations:
the Montoya ruling and the
factual-issue-bar rule
In this Rule 45 petition for review on certiorari of the CA’s decision rendered under a Rule 65 proceeding, this Court’s power of
review is limited to resolving matters pertaining to any perceived legal errors that the CA may have committed in issuing the assailed
decision. This is in contrast with the review for jurisdictional errors, which we undertake in an original certiorari action. In reviewing
the legal correctness of the CA decision, we examine the CA decision based on how it determined the presence or absence of grave
abuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision on the merits of the case was
correct.32 In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC
decision challenged before it.33
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32 Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009, 597 SCRA 334, 342-343.
33 Career Philippines Shipmanagement, Inc. v. Serna, G.R. No. 172086, December 3, 2012, 686 SCRA 676, 683-684,
citing Montoya v. Transmed Manila Corporation, supra.
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Moreover, the Court’s power in a Rule 45 petition limits us to a review of questions of law raised against the assailed CA decision. 34

41
 In this petition, David essentially asks the question —whether Macasio is entitled to holiday, SIL and 13th month pay. This one is
a question of law. The determination of this question of law however is intertwined with the largely factual issue of whether Macasio
falls within the rule on entitlement to these claims or within the exception. In either case, the resolution of this factual issue
presupposes another factual matter, that is, the presence of an employer-employee relationship between David and Macasio.
In insisting before this Court that Macasio was not his employee, David argues that he engaged the latter on “ pakyaw” or task
basis. Very noticeably, David confuses engagement on “pakyaw” or task basis with the lack of employment relationship. Impliedly,
David asserts that their “pakyawan” or task basis arrangement negates the existence of employment relationship.
At the outset, we reject this assertion of the petitioner. Engagement on “pakyaw” or task basis does not characterize the
relationship that may exist between the parties, i.e., whether one of employment or independent contractorship. Article 97(6) of the
Labor Code defines wages as “x x x the remuneration or earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece, or commission basis, 
_______________

34 See Basay v. Hacienda Consolacion, G.R. No. 175532, April 19, 2010, 618 SCRA 422, 434. “A question of law exists when the
doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts x  x x. In contrast, a question of
fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole
evidence[.]” (Cosmos Bottling Corp. v. Nagrama, Jr., 571 Phil. 281, 296; 547 SCRA 571, 581 (2008), citing Republic v.
Sandiganbayan, G.R. No. 135789, January 31, 2002, 375 SCRA 425).
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David vs. Macasio
or other method of calculating the same, which is payable by an employer to an employee  under a written or unwritten contract
of employment for work done or to be done, or for services rendered or to be rendered[.]” 35In relation to Article 97(6), Article 10136 of
the Labor Code speaks of workers paid by results or those whose pay is calculated in terms of the quantity or quality of their work
output which includes “pakyaw” work and other non-time work.
More importantly, by implicitly arguing that his engagement of Macasio on “pakyaw” or task basis negates employer-employee
relationship, David would want the Court to engage on a factual appellate review of the entire case to determine the presence or
existence of that relationship. This approach however is not authorized under a Rule 45 petition for review of the CA decision
rendered under a Rule 65 proceeding.
First, the LA and the NLRC denied Macasio’s claim not because of the absence of an employer-employee but because of its
finding that since Macasio is paid on pakyawor task basis, then he is not entitled to SIL, holiday and 13 th month pay. Second, we
consider it crucial, that in the separate illegal dismissal case Macasio filed with the LA, the LA, the NLRC and the CA uniformly
found the existence of an employer-employee relationship.37
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35 Emphases ours.
36 Article 101 of the Labor Code reads in full–
“Art. 101. Payment by results.—
The Secretary of Labor and Employment shall regulate the payment of wages by results, including pakyaw, piecework, and other
non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in
consultation with representatives of workers’ and employer’s organizations.”
37 This decision lapsed to finality upon the denial of David’s petition for review filed with the Court.
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In other words, aside from being factual in nature, the existence of an employer-employee relationship is in fact a nonissue in this
case. To reiterate, in deciding a Rule 45 petition for review of a labor decision rendered by the CA under 65, the narrow scope of
inquiry is whether the CA correctly determined the presence or absence of grave abuse of discretion on the part of the NLRC. In
concrete question form, “did the NLRC gravely abuse its discretion in denying Macasio’s claims simply because he is paid on a non-
time basis?”  
At any rate, even if we indulge the petitioner, we find his claim that no employer-employee relationship exists baseless.
Employing the control test,38 we find that such a relationship exist in the present case.  
Even a factual review shows that
Macasio is David’s employee
To determine the existence of an employer-employee relationship, four elements generally need to be considered, namely: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct. These elements or indicators comprise the so-called “four-fold” test of employ-
_______________

42
 38 Of these elements, the power to control is the most important criterion. Under the “control test,” the important question to ask
is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to
the means and methods by which the result is to be accomplished. We should, however, emphasize that the control test simply calls
for the existence of the right to control and not necessarily the actual exercise of this right. To be clear, the test does not require that
the employer actually supervises the performance of duties by the employee. (Javier v. Fly Ace Corporation, 666 SCRA 383, 397-
398; Chavez v. NLRC, 489 Phil. 444, 456; 448 SCRA 478, 490 (2005); See Basay v. Hacienda Consolacion, supra).
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82 SUPREME COURT REPORTS ANNOTATED
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ment relationship. Macasio’s relationship with David satisfies this test.  
First, David engaged the services of Macasio, thus satisfying the element of “selection and engagement of the employee.” David
categorically confirmed this fact when, in his “Sinumpaang Salaysay,” he stated that “nag apply po siya sa akin at kinuha ko siya na
chopper[.]”39 Also, Solano and Antonio stated in their “Pinagsamang Sinumpaang Salaysay”40 that “[k]ami po ay nagtratrabaho sa
Yiels x x x na pag-aari ni Ariel David bilang butcher” and “kilala namin si x x x Macasio na isa ring butcher x x x ni x x x
David at kasama namin siya sa aming trabaho.” Second, David paid Macasio’s wages. Both David and Macasio categorically stated
in their respective pleadings before the lower tribunals and even before this Court that the former had been paying the latter P700.00
each day after the latter had finished the day’s task. Solano and Antonio also confirmed this fact of wage payment in their
“Pinagsamang Sinumpaang Salaysay.”41 This satisfies the element of “payment of wages.”
Third, David had been setting the day and time when Macasio should report for work. This power to determine the work schedule
obviously implies power of control. By having the power to control Macasio’s work schedule, David could
_______________

39 Rollo, pp. 97-98. In paragraph 1 of David’s “Sinumpaang Salaysay,” he stated:

“1. x x x Ang katotohanan po ay nag apply po siya sa akin at kinuha ko siya na chopper sa kasunduan na
pakyawan. P700.00ang binabayad ko sa kanya sa bawat apat (4) na oras na trabaho bilang chopper na mag-uumpisa ng 10:00
P.M. ng gabi at matatapos sa 2:00 A.M. sa madaling araw o mas maaga pa dito kung kaunti lang ang delivery ng baboy.” (emphasis
ours)
40 Supra note 13; underscores ours.
41 Ibid.
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David vs. Macasio
regulate Macasio’s work and could even refuse to give him any assignment, thereby effectively dismissing him.
And fourth, David had the right and power to control and supervise Macasio’s work as to the means and methods of performing it.
In addition to setting the day and time when Macasio should report for work, the established facts show that David rents the place
where Macasio had been performing his tasks. Moreover, Macasio would leave the workplace only after he had finished chopping all
of the hog meats given to him for the day’s task. Also, David would still engage Macasio’s services and have him report for work even
during the days when only few hogs were delivered for butchering.
Under this overall setup, all those working for David, including Macasio, could naturally be expected to observe certain rules and
requirements and David would necessarily exercise some degree of control as the chopping of the hog meats would be subject to his
specifications. Also, since Macasio performed his tasks at David’s workplace, David could easily exercise control and supervision
over the former. Accordingly, whether or not David actually exercised this right or power to control is beside the point as the law
simply requires the existence of this power to control 42 or, as in this case, the existence of the right and opportunity to control and
supervise Macasio.43
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42 Jaime N. Gapayao v. Rosario Fulo, et al., G.R. No. 193493, June 13, 2013, 698 SCRA 485.
43 But, in addition to the above circumstances that clearly meet the “four-fold test,” three other circumstances satisfying the
“economic dependence test” strengthen the conclusion of the parties’ relationship as one of employer and employee ( Dr. Sevilla v.
Court of Appeals, 243 Phil. 340, 348-349; 160 SCRA 171, 179 [1988]). For one, Macasio had been performing work that is usually
necessary and desirable to the usual trade and business of David. The facts show that David is a hog dealer who sells hog meats to his
customers in the wet market. He engages butchers, such as Macasio, to butcher and chop his hogs for distribution to his customers.
Clearly, Maca-
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84 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio

43
 In sum, the totality of the surrounding circumstances of the present case sufficiently points to an employer-employee relationship
existing between David and Macasio.
Macasio is engaged on “pakyaw”
or task basis
At this point, we note that all three tribunals — the LA, the NLRC and the CA — found that Macasio was engaged or paid on
“pakyaw” or task basis. This factual finding binds the Court under the rule that factual findings of labor tribunals when supported by
the established facts and in accord with the laws, especially when affirmed by the CA, is binding on this Court.
A distinguishing characteristic of “pakyaw” or task basis engagement, as opposed to straight-hour wage payment, is the non-
consideration of the time spent in working. In a task-basis work, the emphasis is on the task itself, in the sense that payment is
reckoned in terms of completion of the work, not in terms of the number of time spent in the completion of
sio’s work as a butcher qualifies as necessary and desirable to David’s hog dealer business.  
Another, David had been repeatedly and continuously engaging Macasio’s services to perform precisely the same task of
butchering hogs or hog meats since 2000. David categorically confirmed, in his various pleadings, his continuous and repeated hiring
or engagement of Macasio, albeit, insisting that the engagement is on “pakyaw” or task basis.
Lastly, Macasio regularly reported for work to earn the P700.00 fee. He would likewise ask for cash advances from David for his
and his family’s needs. David’s “Sinumpaang Salaysay” confirms this observation when he stated that he refused to give Macasio
another cash advance as the latter already had several unpaid cash advances. These facts clearly show that Macasio looked on to David
for the former’s daily financial needs in the form of wages.
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David vs. Macasio
work.44 Once the work or task is completed, the worker receives a fixed amount as wage, without regard to the standard measurements
of time generally used in pay computation.
In Macasio’s case, the established facts show that he would usually start his work at 10:00 p.m. Thereafter, regardless of the total
hours that he spent at the workplace or of the total number of the hogs assigned to him for chopping, Macasio would receive the fixed
amount of P700.00 once he had completed his task. Clearly, these circumstances show a “pakyaw” or task basis engagement that all
three tribunals uniformly found.
In sum, the existence of employment relationship between the parties is determined by applying the “four-fold” test; engagement
on “pakyaw” or task basis does not determine the parties’ relationship as it is simply a method of pay computation. Accordingly,
Macasio is David’s employee, albeit engaged on “pakyaw” or task basis.
As an employee of David paid on pakyaw or task basis, we now go to the core issue of whether Macasio is entitled to holiday,
13th month, and SIL pay.
On the issue of Macasio’s entitlement
to holiday, SIL and 13th month pay
The LA dismissed Macasio’s claims pursuant to Article 94 of the Labor Code in relation to Section 1, Rule IV of the IRR of the
Labor Code, and Article 95 of the Labor Code, as well as Presidential Decree (PD) No. 851. The NLRC, on the other hand, relied on
Article 82 of the Labor Code and the Rules and Regulations Implementing PD No. 851. Uniformly, these provisions exempt workers
paid on “pakyaw” or task basis from the coverage of holiday, SIL and 13th month pay.
44 C.A. Azucena, Jr., The Labor Code, Vol. I, p. 186 (8th ed., 2013).
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In reversing the labor tribunals’ rulings, the CA similarly relied on these provisions, as well as on Section 1, Rule V of the IRR of
the Labor Code and the Court’s ruling in Serrano v. Severino Santos Transit.45 These labor law provisions, when read together with
the Serrano ruling, exempt those engaged on “pakyaw” or task basis only if they qualify as “field personnel.”
In other words, what we have before us is largely a question of law regarding the correct interpretation of these labor code
provisions and the implementing rules; although, to conclude that the worker is exempted or covered depends on the facts and in this
sense, is a question of fact: first, whether Macasio is a “field personnel”; and second, whether those engaged on “pakyaw” or task
basis, but who are not “field personnel,” are exempted from the coverage of holiday, SIL and 13thmonth pay.
To put our discussion within the perspective of a Rule 45 petition for review of a CA decision rendered under Rule 65 and framed
in question form, the legal question is whether the CA correctly ruled that it was grave abuse of discretion on the part of the NLRC to
deny Macasio’s monetary claims simply because he is paid on a non-time basis without determining whether he is a field personnel or
not.
To resolve these issues, we need to revisit the provisions involved.
Provisions governing SIL and holiday pay
Article 82 of the Labor Code provides the exclusions from the coverage of Title I, Book III of the Labor Code — provisions
governing working conditions and rest periods.

44
 Art. 82. Coverage.—The provisions of [Title I] shall applyto employees in all establishments and undertakings  whether for
profit or not, but not to govern-
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45 Supra note 23.
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David vs. Macasio
ment 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.
x x x x
“Field personnel” shall refer to nonagricultural 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.
[emphases and underscores ours]
Among the Title I provisions are the provisions on holiday pay (under Article 94 of the Labor Code) and SIL pay (under Article
95 of the Labor Code). Under Article 82, “field personnel” on one hand and “workers who are paid by results” on the other hand, are
not covered by the Title I provisions. The wordings of Article 82 of the Labor Code additionally categorize workers “paid by results”
and “field personnel” as separate and distinct types of employees who are exempted from the Title I provisions of the Labor Code.
The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the IRR46 reads:
Art. 94. Right to holiday pay.—(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than (10) workers[.] [emphasis ours]
x x x x
SECTION 1. Coverage.—This Rule shall apply to all employees except:
x x x x 
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46 Section 1, Rule IV of Book 3.

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88 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
(e) Field personnel and other employees whose time and performance is unsupervised by the employer includingthose
who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof. [emphases ours]
On the other hand, Article 95 of the Labor Code and its corresponding provision in the IRR47 pertinently provides:
Art. 95. Right to service incentive.—(a) 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.
(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave
with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments
exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of
such establishment. [emphases ours]
x x x x
Section 1. Coverage.—This rule shall apply to all employees except:
x x x x
(e) 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 a fixed amount for performing work irrespective
of the time consumed in the performance thereof. [emphasis ours]
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47 Section 1, Rule V of Book 3.

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David vs. Macasio
Under these provisions, the general rule is that holiday and SIL pay provisions cover all employees. To be excluded from their
coverage, an employee must be one of those that these provisions expressly exempt, strictly in accordance with the exemption.
Under the IRR, exemption from the coverage of holiday and SIL pay refer to “field personnel and other employees whose time
and performance is unsupervised by the employer including those who are engaged on task or contract basis[.]” Note that  unlike
Article 82 of the Labor Code, the IRR on holiday and SIL pay do not exclude employees “engaged on task basis” as a separate and

45
distinct category from employees classified as “field personnel.” Rather, these employees are altogether merged into one classification
of exempted employees.
Because of this difference, it may be argued that the Labor Code may be interpreted to mean that those who are engaged on task
basis, per se, are excluded from the SIL and holiday payment since this is what the Labor Code provisions, in contrast with the IRR,
strongly suggest. The arguable interpretation of this rule may be conceded to be within the discretion granted to the LA and NLRC as
the quasi-judicial bodies with expertise on labor matters.
However, as early as 1987 in the case of Cebu Institute of Technology v. Ople48 the phrase “those who are engaged on task or
contract basis” in the rule has already been interpreted to mean as follows:
[the phrase] should however, be related with “field personnel” applying the rule on ejusdem generis that general and unlimited
terms are restrained and limited by the particular terms that they follow. x x x Clearly, petitioner’s teaching personnel cannot be
deemed field personnel which refers “to nonagricultural employees who
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48 No. L-58870, 18 December 1987, 156 SCRA 629.

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90 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
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. [Par. 3, Article 82, Labor Code of the Philippines]. Petitioner’s claim
that private respondents are not entitled to the service incentive leave benefit cannot therefore be sustained.
 
In short, the payment of an employee on task or pakyawbasis alone is insufficient to exclude one from the coverage of SIL and
holiday pay. They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as “field
personnel.” The IRR therefore validly qualifies and limits the general exclusion of “workers paid by results” found in Article 82 from
the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who are
paid by results from the coverage of Title I is “determined by the Secretary of Labor in appropriate regulations.”
The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus Transport Systems, Inc. v. Bautista:
A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited
by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1
of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to employees classified as “field
personnel.” The phrase “other employees whose performance is unsupervised by the employer” must not be understood as a separate
classification of employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the
interpretation of the definition of field personnel under the Labor Code as those “whose actual hours of work in the field cannot be
determined with reasonable certainty.”
The same is true with respect to the phrase “those who are engaged on task or contract basis, purely com-
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David vs. Macasio
mission basis.” Said phrase should be related with “field personnel,” applying the rule on ejusdem generis that general and unlimited
terms are restrained and limited by the particular terms that they follow.
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the CA cited in support of granting Macasio’s
petition.
In Serrano, the Court, applying the rule on ejusdem generis49 declared that “employees engaged on task or contract
basis x x x are not automatically exempted from the grant of service incentive leave, unless, they fall under the classification of
field personnel.”50 The Court explained that the phrase “including those who are engaged on task or contract basis, purely
commission basis” found in Section 1(d), Rule V of Book III of the IRR should not be understood as a separate classification of
employees to which SIL shall not be granted. Rather, as with its preceding phrase — “other employees whose performance is
unsupervised by the employer” — the phrase “including those who are engaged on task or contract basis” serves to amplify the
interpretation of the Labor Code definition of “field personnel” as those “whose actual hours of work in the field cannot be determined
with reasonable certainty.”
In contrast and in clear departure from settled case law, the LA and the NLRC still interpreted the Labor Code provisions and the
IRR as exempting an employee from the coverage of Title I of the Labor Code based simply and solely on the mode of payment of an
employee. The NLRC’s utter disregard of this consistent jurisprudential ruling is a
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49 The general and unlimited terms are restrained and limited by the particular terms that they follow.
50 Supra note 23 at pp. 492-493; emphasis supplied, underscore ours.
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46
 David vs. Macasio
clear act of grave abuse of discretion.51 In other words, by dismissing Macasio’s complaint without considering whether Macasio
was a “field personnel” or not, the NLRC proceeded based on a significantly incomplete consideration of the case. This action
clearly smacks of grave abuse of discretion.
Entitlement to holiday pay
Evidently, the Serrano ruling speaks only of SIL pay. However, if the LA and the NLRC had only taken counsel from Serrano and
earlier cases, they would have correctly reached a similar conclusion regarding the payment of holiday pay since the rule exempting
“field personnel” from the grant of holiday pay is identically worded with the rule exempting “field personnel” from the grant of SIL
pay. To be clear, the phrase “employees engaged on task or contract basis” found in the IRR on both SIL pay and holiday pay should
be read together with the exemption of “field personnel.”
In short, in determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and SIL pay, the presence (or
absence) of employer supervision as regards the worker’s time and performance is the key: if the worker is simply engaged
on pakyaw or task basis, then the general rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions
specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code. However, if the worker engaged
on pakyaw or task basis also falls within the meaning of “field personnel” under the law, then he is not entitled to these monetary
benefits.
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51 In case the LA and the NLRC cites a contrary jurisprudential ruling that creates a real conflict in our existing case law, this is
the only time that the Court may exercise its discretion to have a wider scope of review of a Rule 65 CA decision. In this case, the
wider scope of review is necessitated by the need to create a body of harmonious and workable jurisprudence.
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David vs. Macasio
Macasio does not fall under the
classification of “field personnel”
Based on the definition of field personnel under Article 82, we agree with the CA that Macasio does not fall under the definition of
“field personnel.” The CA’s finding in this regard is supported by the established facts of this case:  first, Macasio regularly performed
his duties at David’s principal place of business; second, his actual hours of work could be determined with reasonable certainty;
and third, David supervised his time and performance of duties. Since Macasio cannot be considered a “field personnel,” then he is not
exempted from the grant of holiday, SIL pay even as he was engaged on “pakyaw” or task basis.
Not being a “field personnel,” we find the CA to be legally correct when it reversed the NLRC’s ruling dismissing Macasio’s
complaint for holiday and SIL pay for having been rendered with grave abuse of discretion.
Entitlement to 13th month pay
With respect to the payment of 13th month pay however, we find that the CA legally erred in finding that the NLRC gravely
abused its discretion in denying this benefit to Macasio.
The governing law on 13th month pay is PD No. 851. 52As with holiday and SIL pay, 13th month pay benefits generally cover all
employees; an employee must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations
Implementing P.D. No. 85153enumerates the exemptions from the coverage of 13 thmonth pay benefits. Under Section 3(e), “employers
of those who are paid on x x x task basis, and those who are paid a fixed amount for
_______________

52 Enacted on December 16, 1975.

53 Issued on December 22, 1975.
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94 SUPREME COURT REPORTS ANNOTATED
David vs. Macasio
performing a specific work, irrespective of the time consumed in the performance thereof”54 are exempted.
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD
No. 851 exempts employees “paid on task basis” without any reference to “field personnel.” This could only mean that insofar as
payment of the 13th month pay is concerned, the law did not intend to qualify the exemption from its coverage with the requirement
that the task worker be a “field personnel” at the same time.
WHEREFORE, in light of these considerations, we hereby PARTIALLY GRANT the petition insofar as the payment of 13th
month pay to respondent is concerned. In all other aspects, we AFFIRM the decision dated November 22, 2010 and the resolution
dated January 31, 2011 of the Court of Appeals in C.A.-G.R. S.P. No. 116003.
SO ORDERED.
Carpio (Chairperson), Del Castillo, Perez and Perlas-Bernabe, JJ., concur.
Petition partially granted, judgment and resolution affirmed. 
______________
47
 54 Section 3(e) of the Rules and Regulations Implementing P.D. No. 851 reads in full:
SEC. 3.  Employers covered.—The Decree shall apply to all employers except to:
x x x x
e) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount
for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid
on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned. [emphases
ours]
 
95
VOL. 729, JULY 2, 2014 95
David vs. Macasio
Notes.—Under Presidential Decree (P.D.) 851 or the Service Incentive Leave (SIL) Law, the exclusion from its coverage of
workers who are paid on a purely commission basis is only with respect to field personnel; An employee who is paid on purely
commission basis is entitled to Service Incentive Leave (SIL). (Serrano vs. Severino Santos Transit, 627 SCRA 483 [2010])
The employer has the burden of proving of paying holiday pay, service incentive leave pay and other benefits. ( Pigcaulan vs.
Security and Credit Investigation, Inc., 663 SCRA 1 [2012])

——o0o——

48
G.R. No. 94951. April 22, 1991.*
APEX MINING COMPANY, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA
CANDIDO, respondents.
Labor Laws; Domestic Helper, defined.—Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms
“househelper” or “domestic servant” are defined as follows: “The term ‘househelper’ as used herein is synonymous to the term
‘domestic servant’ and shall refer to any person, whether male or female, who renders services in and about the employer’s home and
which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal
comfort and enjoyment of the employer’s family.” The foregoing definition clearly contemplates such househelper or domestic
servant who is employed in the employer’s home to minister exclusively to the personal comfort and enjoyment of the employer’s
family. Such definition covers family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other similar
househelps.
Same; Same; Laundrywoman in staffhouses of a company, not included in the definition of domestic helpers.—The definition
cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the
needs of the company’s guest and other persons availing of said facilities. By the same token, it cannot be considered to extend to the
driver, houseboy, or gardener exclusively working in the company, the staffhouses and its premises. They may not be considered as
within the meaning of a “househelper” or “domestic servant” as above-defined by law.
Same; Same; Same; Laundrywoman not actually serving the family of the employer but working in the staffhouses or within the
premises of the business of the employer is a regular employee.—The criteria is the personal comfort and enjoyment of the family of
the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or
laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the
former instance they are actually 
_______________
*
 FIRST DIVISION.
252
252  SUPREME COURT REPORTS ANNOTATED 
Apex Mining Company, Inc. vs. NLRC
serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry
or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the
employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a
regular employee. Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the
business of the employer that such househelper or domestic servant may be considered as such an employee. The Court finds no merit
in making any such distinction. The mere fact that the househelper or domestic servant is working within the premises of the business
of the employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and
employees, warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee of
the employer and not as a mere family househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3 of the
Labor Code, as amended.

PETITION for certiorari to review the decision of the National Labor Relations Commission.

The facts are stated in the opinion of the Court.

      Bernabe B. Alabastro for petitioner.
      Angel Fernandez for private respondent.

GANCAYCO, J.:

49
Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm? This is the
novel issue raised in this petition.

Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to perform laundry
services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece rate basis. However, on
January 17, 1982, she was paid on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month.

On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally slipped and hit
her back on a stone. She reported the accident to her immediate supervisor Mila de la Rosa and to the personnel officer, Florendo D.
Asirit. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for medication. De la
Rosa offered her the amount of P 2,000.00 which was eventually increased to P5,000.00 to persuade her to quit her job, but she
refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her on February 4, 1988.

On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and Employment. After the parties
submitted their position papers as required by the labor arbiter assigned to the case on August 24, 1988 the latter rendered a decision,
the dispositive part of which reads as follows:

WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the respondent, Apex Mining
Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit:

1 Salary

Differential –– P16,289.20

2. Emergency Living

Allowance –– 12,430.00

3. 13th Month Pay

Differential –– 1,322.32

4. Separation Pay

(One-month for

every year of

service [1973-19881) –– 25,119.30

or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55,161.42).

SO ORDERED.1

Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations Commission (NLRC), wherein in due
course a decision was rendered by the Fifth Division thereof on July 20, 1989 dismissing the appeal for lack of merit and affirming the
appealed decision. A motion for reconsideration thereof was denied in a resolution of the NLRC dated June 29, 1990.

Hence, the herein petition for review by certiorari, which appopriately should be a special civil action for certiorari, and which in the
interest of justice, is hereby treated as such.2 The main thrust of the petition is that private respondent should be treated as a mere
househelper or domestic servant and not as a regular employee of petitioner.

The petition is devoid of merit.

Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are defined as
follows:

50
 The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether
male or female, who renders services in and about the employer's home and which services are usually necessary or desirable
for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the
employer's family.3

The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to
minister exclusively to the personal comfort and enjoyment of the employer's family. Such definition covers family drivers, domestic
servants, laundry women, yayas, gardeners, houseboys and other similar househelps.

The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who
attends to the needs of the company's guest and other persons availing of said facilities. By the same token, it cannot be considered to
extend to then driver, houseboy, or gardener exclusively working in the company, the staffhouses and its premises. They may not be
considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true
that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar
in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter
case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit,
service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are
employees of the company or employer in the business concerned entitled to the privileges of a regular employee.

Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the
employer that such househelper or domestic servant may be considered as such as employee. The Court finds no merit in making any
such distinction. The mere fact that the househelper or domestic servant is working within the premises of the business of the
employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and employees,
warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer
and not as a mere family househelper or domestic servant as contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as
amended.

Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her work.1âwphi1This
argument notwithstanding, there is enough evidence to show that because of an accident which took place while private respondent
was performing her laundry services, she was not able to work and was ultimately separated from the service. She is, therefore,
entitled to appropriate relief as a regular employee of petitioner. Inasmuch as private respondent appears not to be interested in
returning to her work for valid reasons, the payment of separation pay to her is in order.

WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are hereby
AFFIRMED. No pronouncement as to costs.

SO ORDERED.

51
G.R. No. 96078. January 9,1992.*
HILARIO RADA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR
CONSULTANTS AND PLANNERS, INC., respondents.
Labor Law; Appeals; Technical rules not binding and prior resort to amicable settlement; An appeal by the employer may be
perfected only upon the posting of a cash or surety bond.—While it is true that the payment of the supersedeas bond is an essential
requirement in the perfection of an appeal, however, where the fee had been paid although payment was delayed, the broader interests
of justice and the desired objective of resolving controversies on the merits demands that the appeal be given due course. Besides, it
was within the inherent power of the NLRC to have allowed late payment of the bond, considering that the aforesaid decision of the
labor arbiter was received by private respondent on October 3, 1989 and its appeal was duly filed on October 13, 1989. However, said
decision did not state the amount awarded as backwages and overtime pay, hence the amount of the supersedeas bond could not be
determined. It was only in the order of the NLRC of February 16,1990 that the amount of the supersedeas bond was specified and
which bond, after an extension granted by the NLRC, was timely filed by private respondent.
Same; Termination of Employment; Where the employment has been fixed for a specific project or undertaking the completion
or termination of which has been determined at the time of the engagement of the employee, the employment is not to be deemed
regular.—A non-project employee is different in that the employee is hired for more than one project. A non-project employee, vis-a-
vis a project employee, is best exemplified in the case of Fegurin, et al. vs. National Labor Relations Commission, et al. wherein four
of the petitioners had been working with the company for nine years, one for eight years, another for six years, the shortest term being
three years. In holding that petitioners are regular employees, this Court therein explained: "Considering the nature of the work of
petitioners, that of carpenter, laborer or mason, their respective jobs would actually be continuous and on-going. When a project to
which they are individually assigned is completed, they would be assigned to the next project or a phase thereof. In other words, they
belonged to a 'work pool' from which the 
_______________
*
 SECOND DIVISION.
70
70  SUPREME COURT REPORTS ANNOTATED 
Rada vs. NLRC
company would draw workers for assignment to other projects at its discretion. They are, therefore, actually 'non-project
employees.'" From the foregoing, it is clear that petitioner is a project employee considering that he does not belong to a "work pool"
from which the company would draw workers for assignment to other projects at its discretion. It is likewise apparent from the facts
52
obtaining herein that petitioner was utilized only for one particular project, the MNEE Stage 2 Project of respondent company. Hence,
the termination of herein petitioner is valid by reason of the completion of the project and the expiration of his employment contract.
Same; Conditions of Employment; Hours of Work; Hours worked shall include all time during which an employee is suffered
or permitted to work.—Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The fact that he
picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points
on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to petitioner's job as a driver. On
the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for
the benefit of the employer, herein private respondent. This fact is inevitably deducible from the Memorandum of respondent
company: "The herein Respondent resorted to the above transport arrangement because from its previous project construction
supervision experiences, Respondent found out that project delays and inefficiencies resulted from employees' tardiness; and that the
problem of tardiness, in turn, was aggravated by transportation problems, which varied in degrees in proportion to the distance
between the project site and the employees' residence. In view of this lesson from experience, and as a practical, if expensive, solution
to employees' tardiness and its concomitant problems, Respondent adopted the policy of allowing certain employees—not necessarily
project drivers—to bring home project vehicles, so that employees could be afforded fast, convenient and free transportation to and
from the project field office. x x x."

SPECIAL CIVIL ACTION for certiorari to review the decision of the National Labor Relations Commission.

The facts are stated in the opinion of the Court.

     Caballero, Calub, Aumentado & Associates Law Offices for petitioner.

REGALADO, J.:

In this special civil action for certiorari, petitioner Rada seeks to annul the decision of respondent National Labor Relations
Commission (NLRC), dated November 19, 1990, reversing the decision of the labor arbiter which ordered the reinstatement of
petitioner with backwages and awarded him overtime pay. 1

The facts, as stated in the Comment of private respondent Philnor Consultants and Planners, Inc. (Philnor), are as follows:

Petitioner's initial employment with this Respondent was under a "Contract of Employment for a Definite Period"
dated July 7, 1977, copy of which is hereto attached and made an integral part hereof as Annex A whereby Petitioner
was hired as "Driver" for the construction supervision phase of the Manila North Expressway Extension, Second
Stage (hereinafter referred to as MNEE Stage 2) for a term of "about 24 months effective July 1, 1977.

xxx xxx xxx

Highlighting the nature of Petitioner's employment, Annex A specifically provides as follows:

It is hereby understood that the Employer does not have a continuing need for the services of the
Employee beyond the termination date of this contract and that the Employee's services shall
automatically, and without notice, terminate upon the completion of the above specified phase of
the project; and that it is further understood that the engagement of his/her services is coterminus
with the same and not with the whole project or other phases thereof wherein other employees of
similar position as he/she have been hired. (Par. 7, emphasis supplied)

Petitioner's first contract of employment expired on June 30, 1979. Meanwhile, the main project, MNEE Stage 2,
was not finished on account of various constraints, not the least of which was inadequate funding, and the same was
extended and remained in progress beyond the original period of 2.3 years. Fortunately for the Petitioner, at the time
the first contract of employment expired, Respondent was in need of Driver for the extended project. Since
Petitioner had the necessary experience and his performance under the first contract of employment was found
satisfactory, the position of Driver was offered to Petitioner, which he accepted. Hence a second Contract of
Employment for a Definite Period of 10 months, that is, from July 1, 1979 to April 30, 1980 was executed between
Petitioner and Respondent on July 7, 1979. . . .

In March 1980 some of the areas or phases of the project were completed, but the bulk of the project was yet to be
finished. By that time some of those project employees whose contracts of employment expired or were about to
expire because of the completion of portions of the project were offered another employment in the remaining
portion of the project. Petitioner was among those whose contract was about to expire, and since his service
performance was satisfactory, respondent renewed his contract of employment in April 1980, after Petitioner agreed
53
 to the offer. Accordingly, a third contract of employment for a definite period was executed by and between the
Petitioner and the Respondent whereby the Petitioner was again employed as Driver for 19 months, from May 1,
1980 to November 30, 1981, . . .

This third contract of employment was subsequently extended for a number of times, the last extension being for a
period of 3 months, that is, from October 1, 1985 to December 31, 1985, . . .

The last extension, from October 1, 1985 to December 31, 1985 (Annex E) covered by an "Amendment to the
Contract of Employment with a Definite Period," was not extended any further because Petitioner had no more work
to do in the project. This last extension was confirmed by a notice on November 28, 1985 duly acknowledged by the
Petitioner the very next day, . . .

Sometime in the 2nd week of December 1985, Petitioner applied for "Personnel Clearance" with Respondent dated
December 9, 1985 and acknowledged having received the amount of P3,796.20 representing conversion to cash of
unused leave credits and financial assistance. Petitioner also released Respondent from all obligations and/or claims,
etc. in a "Release, Waiver and Quitclaim" . . . 2

Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National Capital Region, Department of
Labor and Employment, a Complaint for non-payment of separation pay and overtime pay. On June 3, 1987, Philnor filed its Position
Paper alleging, inter alia, that petitioner was not illegally terminated since the project for which he was hired was completed; that he
was hired under three distinct contracts of employment, each of which was for a definite period, all within the estimated period of
MNEE Stage 2 Project, covering different phases or areas of the said project; that his work was strictly confined to the MNEE Stage 2
Project and that he was never assigned to any other project of Philnor; that he did not render overtime services and that there was no
demand or claim for him for such overtime pay; that he signed a "Release, Waiver and Quitclaim" releasing Philnor from all
obligations and claims; and that Philnor's business is to provide engineering consultancy services, including supervision of
construction services, such that it hires employees according to the requirements of the project manning schedule of a particular
contract. 3

On July 2, 1987, petitioner filed an Amended Complaint alleging that he was illegally dismissed and that he was not paid overtime pay
although he was made to render three hours overtime work form Monday to Saturday for a period of three years.

On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed since he was a regular employee entitled to
security of tenure; that he was not a project employee since Philnor is not engaged in the construction business as to be covered by
Policy Instructions No. 20; that the contract of employment for a definite period executed between him and Philnor is against public
policy and a clear circumvention of the law designed merely to evade any benefits or liabilities under the statute; that his position as
driver was essential, necessary and desirable to the conduct of the business of Philnor; that he rendered overtime work until 6:00 p.m.
daily except Sundays and holidays and, therefore, he was entitled to overtime pay. 4

In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular employee pursuant to Article 278(c) of the Labor
Code and, thus, he cannot be terminated except for a just cause under Article 280 of the Code; and that the public respondent's ruling
in Quiwa vs. Philnor Consultants and Planners, Inc. 5 is not applicable to his case since he was an administrative employee working
as a company driver, which position still exists and is essential to the conduct of the business of Philnor even after the completion of
his contract of employment. 6Petitioner likewise avers that the contract of employment for a definite period entered into between him
and Philnor was a ploy to defeat the intent of Article 280 of the Labor Code.

On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper, alleging therein that petitioner was not a company
driver since his job was to drive the employees hired to work at the MNEE Stage 2 Project to and from the filed office at Sto.
Domingo Interchange, Pampanga; that the office hours observed in the project were from 7:00 a.m. to 4:00 p.m. Mondays through
Saturdays; that Philnor adopted the policy of allowing certain employees, not necessarily the project driver, to bring home project
vehicles to afford fast and free transportation to and from the project field office considering the distance between the project site and
the employees' residence, to avoid project delays and inefficiency due to employee tardiness caused by transportation problem; that
petitioner was allowed to use a project vehicle which he used to pick up and drop off some ten employees along Epifanio de los Santos
Avenue (EDSA), on his way home to Marikina, Metro Manila; that when he was absent or on leave, another employee living in Metro
Manila used the same vehicle in transporting the same employees; that the time used by petitioner to and from his residence to the
project site from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m., or about three hours daily, was not overtime work as he was
merely enjoying the benefit and convenience of free transportation provided by Philnor, otherwise without such vehicle he would have
used at least four hours by using public transportation and spent P12.00 daily fare; that in the case of Quiwa vs. Philnor Consultants
and Planners, Inc., supra, the NLRC upheld Philnor's position that Quiwa was a project employee and he was not entitled to
termination pay under Policy Instructions No. 20 since his employment was coterminous with the completion of the project.
54
On August 25, 1987, Philnor filed its Respondent's Reply/Comments to Complainant's Rejoinder and Reply, submitting therewith two
letters dated January 5, 1985 and February 6, 1985, signed by MNEE Stage 2 Project employees, including herein petitioner, where
they asked what termination benefits could be given to them as the MNEE Stage 2 Project was nearing completion, and Philnor's
letter-reply dated February 22, 1985 informing them that they are not entitled to termination benefits as they are contractual/project
employees.

On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision 7 with the following dispositive portion:

WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered:

(1) Ordering the respondent company to reinstate the complainant to his former position without loss of seniority
rights and other privileges with full backwages from the time of his dismissal to his actual reinstatement;

(2) Directing the respondent company to pay the complainant overtime pay for the three excess hours of work
performed during working days from January 1983 to December 1985; and

(3) Dismissing all other claims for lack of merit.

SO ORDERED.

Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November 19, 1990, setting aside the labor arbiter's
aforequoted decision and dismissing petitioner's complaint.

Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion amounting to lack of jurisdiction for
the following reasons:

1. The decision of the labor arbiter, dated August 31, 1989, has already become final and executory;

2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is it applicable to this case;

3. The petitioner is a regular employee with eight years and five months of continuous services for his employer, private respondent
Philnor;

4. The claims for overtime services, reinstatement and full backwages are valid and meritorious and should have been sustained; and

5. The decision of the labor arbiter should be reinstated as it is more in accord with the facts, the law and evidence.

The petition is devoid of merit.

1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of the appeal filed by Philnor in spite of the latter's
failure to file a supersedeas bond within ten days from receipt of the labor arbiter's decision, by reason of which the appeal should be
deemed to have been filed out of time. It will be noted, however, that Philnor was able to file a bond although it was made beyond the
10-day reglementary period.

While it is true that the payment of the supersedeas bond is an essential requirement in the perfection of an appeal, however, where the
fee had been paid although payment was delayed, the broader interests of justice and the desired objective of resolving controversies
on the merits demands that the appeal be given due course. Besides, it was within the inherent power of the NLRC to have allowed
late payment of the bond, considering that the aforesaid decision of the labor arbiter was received by private respondent on October 3,
1989 and its appeal was duly filed on October 13, 1989. However, said decision did not state the amount awarded as backwages and
overtime pay, hence the amount of the supersedeas bond could not be determined. It was only in the order of the NLRC of February
16, 1990 that the amount of the supersedeas bond was specified and which bond, after an extension granted by the NLRC, was timely
filed by private respondent.

Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before the Commission or any of the Labor Arbiters, the
rules of evidence prevailing in Courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the
Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case
speedily and objectively without regard to technicalities of law or procedure, all in the interest of due process. 8 Finally, the issue of
55
timeliness of the appeal being an entirely new and unpleaded matter in the proceedings below it may not now be raised for the first
time before this Court. 9

2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he cannot be terminated without cause.
Private respondent Philnor believes otherwise and asserts that petitioner is merely a project employee who was terminated upon the
completion of the project for which he was employed.

In holding that petitioner is a regular employee, the labor arbiter found that:

. . . There is no question that the complainant was employed as driver in the respondent company continuously from
July 1, 1977 to December 31, 1985 under various contracts of employment. Similarly, there is no dispute that
respondent Philnor Consultant & Planner, Inc., as its business name connotes, has been engaged in providing to its
client(e)le engineering consultancy services. The record shows that while the different labor contracts executed by
the parties stipulated definite periods of engaging the services of the complainant, yet the latter was suffered to
continue performing his job upon the expiration of one contract and the renewal of another. Under these
circumstances, the complaint has obtained the status of regular employee, it appearing that he has worked without
fail for almost eight years, a fraction of six months considered as one whole year, and that his assigned task as driver
was necessary and desirable in the usual trade/business of the respondent employer. Assuming to be true, as spelled
out in the employment contract, that the Employer has no "continuing need for the services of the Employe(e)
beyond the termination date of this contract and that the Employee's services shall automatically, and without notice,
terminate upon completion of the above specified phase of the project," still we cannot see our way clear why the
complainant was hired and his services engaged contract after contract straight from 1977 to 1985 which, to our
considered view, lends credence to the contention that he worked as regular driver ferrying early in the morning
office personnel to the company main office in Pampanga and bringing back late in the afternoon to Manila, and
driving company executives for inspection of construction workers to the jobsites. All told, we believe that the
complainant, under the environmental facts obtaining in the case at bar, is a regular employee, the provisions of
written agreement to the 
contrary notwithstanding and regardless of the oral understanding of the parties . . . 10

On the other hand, respondent NLRC declared that, as between the uncorroborated and unsupported assertions of petitioners and those
of private respondent which are supported by documents, greater credence should be given the latter. It further held that:

Complainant was hired in a specific project or undertaking as driver. While such project was still on-going he was
hired several times with his employment period fixed every time his contract was renewed. At the completion of the
specific project or undertaking his employment contract was not renewed.

We reiterate our ruling in the case of (Quiwa) vs. Philnor Consultants and Planners, Inc., NLRC RAB III 5-1738-
84, it is being applicable in this case, viz.:

. . . While it is true that the activities performed by him were necessary or desirable in the usual
business or trade of the respondent as consultants, planners, contractor and while it is also true that
the duration of his employment was for a period of about seven years, these circumstances did not
make him a 
regular employee in contemplation of Article 281 of (the) Labor Code. . . . 11

Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et al.  12 is applicable to the case at bar. Thus:

We hold that private respondents were project employees whose work was coterminous with the project or which
they were hired. Project employees, as distinguished from regular or non-project employees, are mentioned in
section 281 of the Labor Code as those "where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the engagement of the employee."

Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer-employee relations in
the construction industry, provides:

Project employees are those employed in connection with a particular construction project. Non-
project (regular) employees are those employed by a construction company without reference to
any particular project.

56
 Project employees are not entitled to termination pay if they are terminated as a result of the
completion of the project or any phase thereof in which they are employed, regardless of the
number of projects in which they have been employed by a particular construction company.
Moreover, the company is not required to obtain clearance from the Secretary of Labor in
connection with such termination.

The petitioner cited three of its own cases wherein the National Labor Relations Commission, Deputy Minister of
Labor and Employment Inciong and the Director of the National Capital Region held that the layoff of its project
employees was lawful. Deputy Minister Inciong in TFU Case No. 1530, In Re Sandoval Shipyards, Inc. Application
for Clearance to Terminate Employees, rendered the following ruling on February 26, 1979;

We feel that there is merit in the contention of the applicant corporation. To our mind, the
employment of the employees concerned were fixed for a specific project or undertaking.For the
nature of the business the corporation is engaged into is one which will not allow it to employ
workers for an indefinite period.

It is significant to note that the corporation does not construct vessels for sale or otherwise which
will demand continuous productions of ships and will need permanent or regular workers. It
merely accepts contracts for shipbuilding or for repair of vessels form third parties and, only, on
occasion when it has work contract of this nature that it hires workers to do the job which,
needless to say, lasts only for less than a year or longer.

The completion of their work or project automatically terminates their employment, in which case,
the employer is, under the law, only obliged to render a report on the termination of the
employment. (139-140, Rollo of G.R. No. 65689) (Emphasis supplied)

In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., 13 we likewise held that:

As an electrical contractor, the private respondent depends for its business on the contracts it is able to obtain from
real estate developers and builders of buildings. Since its work depends on the availability of such contracts or
"projects," necessarily the duration of the employment's of this work force is not permanent but co-terminus with the
projects to which they are assigned and from whose payrolls they are paid. It would be extremely burdensome for
their employer who, like them, depends on the availability of projects, if it would have to carry them as permanent
employees and pay them wages even if there are no projects for them to work on. (Emphasis supplied.)

It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the fact that his services were
rendered only for a particular project which took that same period of time to complete categorizes him as a project employee.
Petitioner was employed for one specific project.

A non-project employee is different in that the employee is hired for more than one project. A non-project employee, vis-a-vis a
project employee, is best exemplified in the case of Fegurin, et al. vs. National Labor Relations Commission, et al.  14 wherein four of
the petitioners had been working with the company for nine years, one for eight years, another for six years, the shortest term being
three years. In holding that petitioners are regular employees, this Court therein explained:

Considering the nature of the work of petitioners, that of carpenter, laborer or mason, their respective jobs would
actually be continuous and on-going. When a project to which they are individually assigned is completed, they
would be assigned to the next project or a phase thereof. In other words, they belonged to a "work pool" from which
the company would draw workers for assignment to other projects at its discretion. They are, therefore, actually
"non-project employees."

From the foregoing, it is clear that petitioner is a project employee considering that he does not belong to a "work pool" from which
the company would draw workers for assignment to other projects at its discretion. It is likewise apparent from the facts obtaining
herein that petitioner was utilized only for one particular project, the MNEE Stage 2 Project of respondent company. Hence, the
termination of herein petitioner is valid by reason of the completion of the project and the expiration of his employment contract.

3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The fact that he picks up employees of
Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from
the field office going home to Marikina, Metro Manila is not merely incidental to petitioner's job as a driver. On the contrary, said

57
transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of the
employer, herein private respondent. This fact is inevitably deducible from the Memorandum of respondent company:

The herein Respondent resorted to the above transport arrangement because from its previous project construction
supervision experiences, Respondent found out that project delays and inefficiencies resulted from employees'
tardiness; and that the problem of tardiness, in turn, was aggravated by transportation problems, which varied in
degrees in proportion to the distance between the project site and the employees' residence. In view of this lesson
from experience, and as a practical, if expensive, solution to employees' tardiness and its concomitant problems,
Respondent adopted the policy of allowing certain employees — not necessarily project drivers — to bring home
project vehicles, so that employees could be afforded fast, convenient and free transportation to and from the project
field office. . . . 15

Private respondent does not hesitate to admit that it is usually the project driver who is tasked with picking up or dropping off his
fellow employees. Proof thereof is the undisputed fact that when petitioner is absent, another driver is supposed to replace him and
drive the vehicle and likewise pick up and/or drop off the other employees at the designated points on EDSA. If driving these
employees to and from the project site is not really part of petitioner's job, then there would have been no need to find a replacement
driver to fetch these employees. But since the assigned task of fetching and delivering employees is indispensable and consequently
mandatory, then the time required of and used by petitioner in going from his residence to the field office and back, that is, from 5:30
a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter rounded off as averaging three hours each working
day, should be paid as overtime work. Quintessentially, petitioner should be given overtime pay for the three excess hours of work
performed during working days from January, 1983 to December, 1985.

WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the decision appealed from is
AFFIRMED in all other respects.

SO ORDERED.

G.R. Nos. 64821-23. January 29, 1993.*

UNIVERSITY OF PANGASINAN FACULTY UNION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
UNIVERSITY OF PANGASINAN, respondents.
Special Civil Actions; Mandamus; Petitioner must state fact with certainty.—As succinctly provided in this section, anyone
who wishes to avail of the remedy of mandamus must state in a verified petition "the facts with certainty." On account of this
requirement, mandamus is never issued in doubtful cases and showing of a clear and certain right on the part of the petitioner is
required. Indeed, while the labor arbiter is duty bound to resolve all complaints referred to him for arbitration and, therefore, he may
be compelled by mandamus to decide them (although not in any particular way or in favor of anyone), we find that the peculiar
circumstances in this case do not merit the issuance of the writ of mandamus.
Labor Laws; Unions; Institution and prosecution of money claims for union members.—Petitioner's contention that the cases
filed by Consuelo Abad as its president should affect, not only herself, but all the other union members similarly situated as she was, is
well taken. The uncontroverted allegation of the petitioner is that it is the holder of Registration Certificate No. 9865-C, having been
registered with 
______________
*
 THIRD DIVISION.
66
66  SUPREME COURT REPORTS ANNOTATED 
University of Pangasinan Faculty Union vs. NLRC
the then Ministry of Labor and Employment on February 16, 1978. As such, petitioner possessed the legal personality to sue and
be sued under its registered name. Corollarily, its president, Consuelo Abad, correctly filed the complaints even if some of them
involved rights and interest purely or exclusively appertaining to individual employees, it appearing that she signed the complaints
"for and in behalf of the University of Pangasinan Faculty Union." The University's contention that petitioner had no legal personality
to institute and prosecute money claims must, therefore, fail. To quote then Associate Justice Teehankee in  Heirs of Teodelo M. Cruz
v. CIR, "[w]hat should be borne in mind is that the interest of the individual worker can be better protected on the whole by a strong
union aware of its moral and legal obligations to represent the rank and file faithfully and secure for them the best wages and working
terms and conditions x x x." Although this was stated within the context of collective bargaining, it applies equally well to cases, such
as the present wherein the union, through its president, presented its individual members' grievances through proper proceedings.
58
While the complaints might not have disclosed the identities of the individual employees claiming monetary benefits, such technical
defect should not be taken against the claimants, especially because the University appears to have failed to demand a bill of
particulars during the proceedings before the Labor Arbiter.
Same; Emergency cost of living allowances (ECOLA); Teachers;"No work, no pay"principle not applicable.—But
more apropos is the ruling of this Court in University of Pangasinan Faculty Union v. University of Pangasinan and NLRC, a case
involving the same parties as in the instant petition and dealing with a complaint filed by the petitioner on December 18, 1981 seeking,
among others, the payment of emergency cost of living allowances for November 7 to December 5, 1981, a semestral break. The
Court held therein: "x x x. The 'No work, no pay' principle does not apply in the instant case. The petitioner's members received their
regular salaries during this period. It is clear from the x x x law that it contemplates a 'no work' situation where the employees
voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem absent themselves during semestral
breaks. Rather, they are constrained to take mandatory leave from work. For this, they cannot be faulted nor can they be begrudged
that which is due them under the law. To a certain extent, the private respondent can specify dates when no classes would be held.
Surely, it was not the intention of the framers of the law to allow employers to withhold employee benefits by the simple expedient of
unilaterally imposing 'no work' days and conse-
67
VOL. 218, JANUARY 29, 1993  67 
University of Pangasinan Faculty Union vs. NLRC
quently avoiding compliance with the mandate of the law for those days."
PETITION for mandamus and certiorari to review the decision of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
Tanopo & Serafica for petitioner.
Hermogenes S. Decano for private respondent.

ROMERO, J.:

In the instant petition for mandamus and certiorari, petitioner union seeks to enjoin the respondent National Labor Relations
Commission (NLRC) to resolve, or direct the Labor Arbiter to hear and decide, the merits of three of petitioner's unresolved
complaints, and to annul and set aside the resolution of the NLRC affirming the decision of the Executive Labor Arbiter dismissing
the petitioner's complaints for violation of certain labor standards laws but requiring respondent university to integrate the cost of
living allowance into the basic pay of the covered employees and reminding it to pay its employees at intervals not exceeding sixteen
(16) days.

The uncontroverted facts show that on various dates, petitioner filed the following complaints against the University of Pangasinan
(University for brevity) before the Arbitration Branch of the NLRC in Dagupan City:

1. October 14, 1980: for nonpayment of benefits under P.D. No. 1713 and emergency cost of living allowance
(ecola) to part-time teachers, and for prompt and accurate computation of benefits under P.D. No. 451 and the
payment of ecolas;

2. November 7, 1980: for nonpayment of all ecolas to instructors from October 18-31, 1980;

3. November 20, 1980: for nonpayment of ecolas under P.D. Nos. 525, 1123, 1614, 1634, 1678 and 1713 for
November 1-15, 1980, and extra loads during typhoons "Nitang" and "Osang" on July 21 and 25, 1980, respectively;

4. April 13, 1981: for violation of P.D. No. 1751 and nonpayment of extra loads on February 12-13, 1980
(Anniversary celebration);

5. April 27, 1981: for nonpayment of all ecolas for April 1-15, 1981 to faculty members who were also members of
the union;

6. May 21, 1981: for violation of Wage Order No. 1 and delayed payment of salaries; and

7. June 17, 1981: for nonpayment of salary differentials for summer under P.D. No. 451.1

The Regional Director in San Fernando, La Union certified six (6) of these complaints to Labor Arbiter Pedro Fernandez of the
Dagupan City District Office of the then Ministry of Labor and Employment for compulsory arbitration. 2 According to the petitioner,
it was made to understand by Fernandez that the seventh complaint should also be discussed in its position paper. Accordingly,
petitioner filed a position paper discussing the merits of all the seven complaints. On the other hand, the University limited its
59
discussion to only four: the complaints filed on April 13, 1981, April 27, 1981, May 21, 1981 and June 17, 1981. Petitioner was of the
view that Executive Labor Arbiter Sotero L. Tumang adopted the stand of the University on the four complaints and accordingly
dismissed them in his decision of January 25, 1982.3

Observing that in its position paper, the petitioner included matters which were "beyond the scope of the issues alleged in the
complaints," said Labor Arbiter discussed the four complaints individually. On the April 13, 1981 complaint, he ruled that because at
the time P.D. No. 1123 took effect on May 1, 1977, the University had not increased its tuition fees, there was of "nothing to
integrate."4 However, from June 16, 1979 when the University increased its tuition fees, it was obligated to cause the integration of the
across-the-board increase of P60.00 in emergency allowance into the basic pay as mandated by P.D. Nos. 1123 and 1751.

On the alleged nonpayment of extra loads handled by the employees on February 12 and 13, 1981 when classes were suspended,
Tumang stated that Consuelo Abad, the petitioner's president, had no cause to complain because her salary was fully paid and that,
since there were "no complainants for the alleged nonpayment of extra loads for two days," the issue had become academic.

With respect to the April 27, 1981 complaint, Tumang said that since the salary paid to Consuelo Abad and other faculty members for
the April 1-15, 1981 period had been earned "as part of their salary for the ten-month period," she was no longer entitled to an
emergency cost of living allowance. He added that "payment of emergency cost of living allowance is based on actual work performed
except when they (employees) are on leave with pay." Hence, because classes ended in March 1981, the teachers who did not report
for work could not be considered on leave with pay and, therefore, they were not entitled to an emergency cost of living allowance.

As regards the May 21, 1981 complaint alleging violation of Wage Order No. 1, Tumang found that the University had actually
implemented the additional living allowance of P2.00 a day required therein. On the alleged delay in the payment of salaries of the
employees, he rationalized that delays could not be avoided but he reminded the University to pay its employees on time.

The June 17, 1981 complaint was also resolved in favor of the University. Stating that P.D. No. 451 which mandates salary increases
is dependent on enrollment and allowable deductions, Tumang ruled that, again, Consuelo Abad had no cause to complain as she had
been paid out of the allowable 12.74% for distribution which was a "substantial compliance with P.D. No. 451." 5 The dispositive
portion of the decision states:

IN THE LIGHT OF THE FOREGOING CONSIDERATION, the above-entitled cases are dismissed for lack of
merit. Respondent however, is required to integrate the allowance of P60.00 under P.D. 1123 into the basic pay of
the covered employees if the same has not as yet been complied with. Respondent is also reminded to pay the
employees at intervals not exceeding sixteen (16) days pursuant to Article 102 of the Labor Code.

SO ORDERED.

The petitioner appealed the said decision to the NLRC. In its resolution of June 20, 1993, the NLRC affirmed the decision of
Executive Labor Article Tumang. Hence, the instant petition for mandamus and certiorari with the following prayer:

WHEREFORE, the foregoing premises considered, it is respectfully prayed that this petition be given due course
and that judgment issue:

1. Declaring petitioner as possessed with capacity to represent its members in the complaints it filed thru its
president, Miss Consuelo Abad, against private respondent, and the complaints are pertaining to the members who
are entitled under the law to the claims sought herein, not to Miss Abad alone;

2. Annulling and setting aside the appealed resolution insofar as the issues of nonpayment of Ecola for April 1-15,
1981 and nonpayment of salary differentials for summer of 1981 under P.D. No. 451 are concerned;

3. Ordering private respondent to pay covered members of petitioner their Ecola for April 1-15, 1981 and their
salary differentials for summer of 1981 pursuant to the mandate of P.D. 451;

4. Enjoining public respondent to resolve on the merits the issues of nonpayment of extra loads of February 12-13,
1980 and violation of Wage Order No. 1 which were properly brought on appeal to said office;

5. Enjoining public respondent to resolve on the merits the issues or grievances alleged in the complaints filed on
October 14, November 7 and November 20, all in 1980, which were not resolved by the labor arbiter but nonetheless
appealed to public respondents, or
60
 6. Enjoining public respondent to order or direct the labor arbiter to resolve on the merits the said issues or
grievances alleged in the complaints mentioned in the next preceding paragraph;

7. Attorney's fee in such amount as this Honorable Tribunal may deem just and reasonable in the premises;

8. Ordering private respondent to pay costs of suit, including this appeal.

Petitioner further prays for safeguards and/or measures to insure the correct computation of the amount of claims
herein sought due to each covered member of petitioner, and for such other reliefs just and equitable in the
premises.6

We shall first deal with the propriety of the special civil action of mandamus. In this regard, petitioner contends that the NLRC should
have, in the exercise of its appellate jurisdiction, resolved the issues raised in the three (3) complaints filed on October 14, November
7 and November 20, 1980 or, in the alternative, ordered the Labor Arbiter to hear and decide the aforementioned three (3) complaints,
it having the power of supervision over Labor Arbiters.

Sec. 3, Rule 65 of the Rules of Court provides:

Sec. 3. Petition for Mandamus. — When any tribunal, corporation, board, or person unlawfully neglects the
performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there
is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered
commanding the defendant, immediately or at some other specified time, to do the act required to be done to protect
the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the
defendant.

As succinctly provided in this section, anyone who wishes to avail of the remedy of mandamus must state in a verified petition "the
facts with certainty." On account of this requirement, mandamus is never issued in doubtful cases and showing of a clear and certain
right on the part of the petitioner is required. 7 Indeed, while the labor arbiter is duty bound to resolve all complaints referred to him
for arbitration and, therefore, he may be compelled by mandamus to decide them (although not in any particular way or in favor of
anyone),8 we find that the peculiar circumstances in this case do not merit the issuance of the writ of mandamus.

Petitioner admits that only six of the complaints were certified to Labor Arbiter Fernandez for compulsory arbitration. It failed,
however, to allege why this was the case or whether it had exerted any effort to include the remaining complaint in the certification.
What it stresses is the alleged assurance of Labor Arbiter Fernandez that the seventh complaint may be discussed in its position paper.
It turned out, however, that, according to the unrebutted allegation of the Solicitor General, Labor Arbiter Fernandez inhibited himself
from handling the cases referred to him as he was teaching at the University. Hence, Labor Arbiter Fernandez forwarded the
complaints to the Assistant Director for Arbitration in Regional Office No. 1 in San Fernando, La Union for appropriate action. He
should have forwarded all of the complaints to the said Assistant Director, but it appears that Fernandez turned over only four of
them. In turn, the Assistant Director referred only complaints Nos. 5, 6 and 7, which had been docketed as RBI-C-24-81, LS-42-81
and LS-43-81, to Executive Labor Arbiter Sotero L. Tumang for compulsory arbitration. However, while only these three docket
numbers appear on the caption of the decision, the same actually resolved four complaints, as earlier mentioned. 9

From these facts, one may infer that there must have been a mishandling of the complaints and/or the records of the cases. However,
the petitioner failed to substantiate by evidence such negligence on the part of the public respondents as to warrant the issuance of a
writ of mandamus. 10 Its officials even neglected the simple act of verifying from the MOLE office in Dagupan City whether the
records of all the cases filed had been forwarded to the proper official who should resolve them. 11 Infact, nowhere in its pleadings 12 is
there an allegation to that effect.

On the contrary, the petitioner took Fernandez' words seriously and allowed the proceedings to reach its inevitable conclusion. When
it received a copy of the decision, the petitioner should have taken note of Executive Labor Arbiter Tumang's observation therein that
it had discussed matters "beyond the scope of the issues alleged in the complaints." In its memorandum of appeal, it should have
prayed for the inclusion of the three complaints inasmuch as in labor cases, an appeal may be treated as a motion for reconsideration
or
vice-versa. 13 The fact that three complaints had been omitted did not escape the attention of the NLRC which stated in its resolution
that "since those cases were not consolidated it is now too late to consolidate them" with the four decided cases. 14 We agree with the
NLRC that the said complaints should proceed separately as long as their resolution would not conflict with the resolved

61
cases.15 It should be added that under Art. 217(b) of the Labor Code, the NLRC has "exclusive appellate jurisdiction over all cases
decided by the Labor Arbiters." Needless to say, the NLRC could not have acted on matters outside of the cases appealed to it.

Petitioner's contention that the cases filed by Consuelo Abad as its president should affect, not only herself, but all the other union
members similarly situated as she was, is well taken. The uncontroverted allegation of the petitioner is that it is the holder of
Registration Certificate No. 9865-C, having been registered with the then Ministry of Labor and Employment on February 16, 1978.
As such, petitioner possessed the legal personality to sue and be sued under its registered name. 16 Corollarily, its president, Consuelo
Abad, correctly filed the complaints even if some of them involved rights and interest purely or exclusively appertaining to individual
employees, it appearing that she signed the complaints "for and in behalf of the University of Pangasinan Faculty Union." 17

The University's contention that petitioner had no legal personality to institute and prosecute money claims must, therefore, fail. To
quote then Associate Justice Teehankee in Heirs of Teodelo M. Cruz v. CIR,18 "[w]hat should be borne in mind is that the interest of
the individual worker can be better protected on the whole by a strong union aware of its moral and legal obligations to represent the
rank and file faithfully and secure for them the best wages and working terms and conditions. . . . Although this was stated within the
context of collective bargaining, it applies equally well to cases, such as the present wherein the union, through its president, presented
its individual members' grievances through proper proceedings. While the complaints might not
have disclosed the identities of the individual employees claiming monetary benefits, 19 such technical defect should not be taken
against the claimants, especially because the University appears to have failed to demand a bill of particulars during the proceedings
before the Labor Arbiter.

On the merits of the petition, the NLRC did not abuse its discretion in resolving the appeal from the decision of Executive Labor
Arbiter Tumang except for the disallowance of the emergency cost of living allowance to members of the petitioner. The Rules
Implementing P.D. No. 1713 which took effect on August 18, 1980 provide:

Sec. 6. Allowances of full-time and part-time employees. — Employees shall be paid in full the monthly allowance
on the basis of the scales provided in Section 3 hereof, regardless of the number of their regular working days if they
incur no absences during the month. If they incur absences without pay, the amounts corresponding to the absences
may be deducted from the monthly allowance provided that in determining the equivalent daily allowance of such
deduction, the applicable monthly allowance shall be divided by thirty (30) days.

xxx xxx xxx

(Emphasis supplied).

This Section, which is a virtual reproduction of Section 12 of the old Rules Implementing P.D. No. 1123, has been interpreted by this
Court as requiring that the full amount of the cost of living allowance mandated by law should be given monthly to each employee if
the latter has worked continuously for each month, regardless of the number of the regular working days.20 But more apropos is the
ruling of this Court in University of Pangasinan Faculty Union v. University of Pangasinan and NLRC,21 a case involving the same
parties as in the instant petition and dealing with a complaint filed by the petitioner on December 18, 1981 seeking, among others, the
payment of emergency cost of living allowances for November 7 to December 5, 1981, a semestral break. The Court held therein:

. . . The "No work, no pay" principle does not apply in the instant case. The petitioner's members received their
regular salaries during this period. It is clear from the . . . law that it contemplates a "no work" situation where the
employees voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem absent
themselves during semestral breaks. Rather, they are constrained to take mandatory leave from work. For this, they
cannot be faulted nor can they be begrudged that which is due them under the law. To a certain extent, the private
respondent can specify dates when no classes would be held. Surely, it was not the intention of the framers of the
law to allow employers to withhold employee benefits by the simple expedient of unilaterally imposing "no work"
days and consequently avoiding compliance with the mandate of the law for those days.

As interpreted and emphasized in the same case, the law granting emergency cost of living allowances was designed to augment the
income of the employees to enable them to cope with the rising cost of living and inflation. Clearly, it was enacted in pursuance of the
State's duty to protect labor and to alleviate the plight of the workers. To uphold private respondent's interpretation of the law would
be running counter to the intent of the law and the Constitution.

WHEREFORE, the petition for mandamus is hereby DISMISSED. The decision of the NLRC is AFFIRMED subject to the
MODIFICATION that private respondent University of Pangasinan shall pay its regular and fulltime teachers and employees
emergency cost of living allowance for the period April 1-15, 1981. Costs against private respondent.

62
No. L-17068. December 30, 1961.
NATIONAL SHIPYARDS AND STEEL CORPORATION, petitioner, vs. COURT OF INDUSTRIAL RELATIONS and
DOMINADOR MALONDRAS, respondents.
Employer and employee; Sailors; Overtime compensation;Criterion in determining.—The correct criterion in determining
whether or not sailors are entitled to overtime pay is not whether they were on board and can not leave ship beyond the regular eight
working hours a day, but whether they actually rendered service in excess of said number of hours. (Luzon Stevedoring Co., Inc. vs.
Luzon Marine Department Union, et al., L-9265, April 29, 1957).
Same; Same; Same; Subsistence allowance not deductible—Inasmuch as the stipulation of facts of the parties show that the
subsistence allowance is independent of and has nothing to do with whatever additional compensation for overtime work was due the
petitioner, the same should not be deducted from his overtime compensation.

PETITION for review by certiorari of the orders of the Court of Industrial Relations.

The facts are stated in the opinion of the Court.

     N. C. Virata for petitioner.
     Mariano B. Tuason for respondent Court.
     Manuel P. Calanog for respondent Dominador Malondras.

REYES, J.B.L., J.:

Petition filed by the National Shipyards and Steel Corporation (otherwise known as the NASSCO) to review certain orders of the
respondent Court of Industrial Relations requiring it to pay its bargeman Dominador Malondras overtime service of 16 hours a day for
a period from January 1, 1954 to December 31, 1956, and from January 1, 1957 to April 30, 1957, inclusive.

The petitioner NASSCO, a government-owned and controlled corporation, is the owner of several barges and tugboats used in the
transportation of cargoes and personnel in connection with its business of shipbuilding and repair. In order that its bargeman could
immediately be called to duty whenever their services are needed, they are required to stay in their respective barges, for which reason
they are given living quarters therein as well as subsistence allowance of P1.50 per day during the time they are on board. However,
upon prior authority of their superior officers, they may leave their barges when said barges are idle.

On April 15, 1957, 39 crew members of petitioner's tugboat service, including therein respondent Dominador Malondras, filed with
the Industrial Court a complaint for the payment of overtime compensation (Case No. 1059-V). In the course of the proceeding, the
parties entered into a stipulation of facts wherein the NASSCO recognized and admitted —

4. That to meet the exigencies of the service in the performance of the above work, petitioners have to work when so required
in excess of eight (8) hours a day and/or during Sundays and legal holidays (actual overtime service is subject to
determination on the basis of the logbook of the vessels, time sheets and other pertinent records of the respondent).

x x x           x x x          x x x

6. The petitioners are paid by the respondent their regular salaries and subsistence allowance, without additional
compensation for overtime work;

Pursuant to the above stipulation, the Industrial Court, on November 22, 1957, issued an order directing the court examiner to compute
the overtime compensation due the claimants.

On February 14, 1958, the court examiner submitted his report covering the period from January 1 to December 31, 1957. In said
report, the examiner found that the petitioners in Case No. 1058-V, including herein respondent Dominador Malondras, rendered an
average overtime service of five (5) hours each day for the period aforementioned, and upon approval of the report by the Court, all
the claimants, including Malondras, were paid their overtime compensation by the NASSCO.

Subsequently, on April 30, 1958, the court examiner submitted his second partial report covering the period from January 1, 1954 to
December 31, 1956, again giving each crewman an average of five (5) overtime hours each day. Respondent Malondras was not,
however, included in this report as his daily time sheets were not then available. Again upon approval by the Court, the crewmen
concerned were paid their overtime compensation.

Because of his exclusion from the second report of the examiner, and his time sheets having been located in the meantime, Dominador
Malondras, on September 18, 1959, filed petitions in the same case asking for the compensation and payment of his overtime

63
compensation for the period from January 1, 1954 to December 31, 1956, and from January to April 30, 1957 which, he alleged, was
not included in the first report of the examiner because his time sheets for these months could not be found at the time. Malondras'
petition was opposed by the NASSCO upon the argument, among others, that its records do not indicate the actual number of working
hours rendered by Malondras during the periods in question. Acting on the petition and opposition, the Industrial Court ordered the
examiner to examine the log books, daily time sheets, and other pertinent records of the corporation for the purpose of determining
and computing whatever overtime service Malondras had rendered from January 1, 1954 to December 31, 1956.

On January 15, 1960, the chief examiner submitted a report crediting Malondras with a total of 4,349 overtime hours from January 1,
1954 to December 31, 1956, at an average of five (5) overtime hours a day, and after deducting the aggregate amount of subsistence
allowance received by Malondras during this period, recommended the payment to him of overtime compensation in the total sum of
P2,790.90.

On February 20, 1960, the Court ordered the examiner to make a re-examination of the records with a view to determining Malondras'
overtime service from January 1, 1954 to December 31, 1956, and from January 1, 1957 to April 30, 1957, but without deducting from
the compensation to be paid to him his subsistence allowance. Pursuant to this last order, the examiner, on April 23, 1960, submitted
an amended report giving Malondras an average of sixteen (16) overtime hours a day, on the basis of his time sheets, and
recommending the payment to him of the total amount of P15,242.15 as overtime compensation during the periods covered by the
report. This report was, over the NASSCO's vigorous objections, approved by the Court below on May 6, 1960. The NASSCO moved
for reconsideration, which was denied by the Court en banc, with one judge dissenting. Whereupon, the NASSCO appealed to this
Court.

There appears to be no question that respondent Malondras actually rendered overtime services during the periods covered by the
examiner's report. This is admitted in the stipulation of facts of the parties in Case No. 1058-V; and it was on the basis of this
admission that the Court below, in its order of November 22, 1957, ordered the payment of overtime compensation to all the
petitioners in Case No. 1058-V, including respondent Dominador Malondras, after the overtime service rendered by them had been
determined and computed on the basis of the log books, time sheets and other pertinent records of the petitioner corporation.

The only matter to be determined here is, therefore, the number of hours of overtime for which Malondras should be paid for the
periods January 1, 1954 to December 31, 1956, and from January to April 30, 1957. Respondents urge that this is a question of fact
and not subject to review by this Court, there being sufficient evidence to support the Industrial Court's ruling on this point. It appears,
however, that in crediting Malondras with 16 hours of overtime service daily for the periods in question, the court examiner relied
only on his daily time sheets which, although approved by petitioner's officers in charge and its auditors, do not show the actual
number of hours of work rendered by him each day but only indicate, according to the examiner himself, that:

almost everyday Dominador Malondras was on "Detail" or "Detailed on Board". According to the officer in charge of
Dominador Malondras, when he (Dominador Malondras) was on "Detail" or "Detailed on Board", he was in the boat for
twenty-four (24) hours.

In other words, the court examiner interpreted the words "Detail" or "Detailed on Board" to mean that as long as respondent
Malondras was in his barge for twenty-four hours, he should be paid overtime for sixteen hours a day or the time in excess of the legal
eight working hours that he could not leave his barge. Petitioner NASSCO, upon the other hand, argues that the mere fact that
Malondras was required to be on board his barge all day so that he could immediately be called to duty when his services were needed
does not imply that he should be paid overtime for sixteen hours a day, but that he should receive compensation only for the actual
service in excess of eight hours that he can prove. This question is clearly a legal one that may be reviewed and passed upon by this
Court.lawphil.net

We can not agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in excess of
the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work
during those hours. Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason that, in
addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It
could not have been the purpose of our law to require their employers to pay them overtime even when they are not actually working;
otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he had spent all those hours
resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to
overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said number of hours. We have ruled to that effect in Luzon Stevedoring Co., Inc.
vs. Luzon Marine Department Union, et al., L-9265, April 29, 1957:

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 I. Is the definition for "hours of work" as presently applied to dryland laborers equally applicable to seamen? Or should a
different criterion be applied by virtue of the fact that the seaman's employment is completely different in nature as well as in
condition of work from that of a dryland laborer?

x x x           x x x          x x x

Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:

"SEC. 1. 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."

The requisites contained in this section are further implemented by contemporary regulations issued by administrative
authorities (Sections 4 and 5 of Chapter III, Article 1, Code of Rules and Regulations to implement the Minimum Wage
Law).

For the purposes of this case, we do not need to set for seamen a criterion different from that applied to laborers on land, for
under the provisions of the above quoted section, the only thing to be done is to determine the meaning and scope of the term
"working place" used therein. 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.
(Emphasis supplied)

While Malondras' daily time sheets do not show his actual working hours, nevertheless, petitioner has already admitted in the
Stipulation of Facts in this case that Malondras and his co-claimants did render service beyond eight (8) hours a day when so required
by the exigencies of the service; and in fact, Malondras was credited and already paid for five (5) hours daily overtime work during
the period from May 1 to December 31, 1957, under the examiner's first report. Since Malondras has been at the same job since 1954,
it can be reasonably inferred that the overtime service he put in whenever he was required to be aboard his barge all day from 1954 to
1957 would be more or less consistent. In truth, the other claimants who served with Malondras under the same conditions and period
have been finally paid for an overtime of 5 hours a day, and no substantial difference exists between their case and the present one,
which was not covered by the same award only because Malondras' time records not found until later.

The next question is whether or not the subsistence allowance received by Malondras for the periods covered by the report in question
should be deducted from his overtime compensation. We do not think so, for the Stipulation of the Facts of the parties show that this
allowance is independent of and has nothing to do with whatever additional compensation for overtime work was due the petitioner
NASSCO's bargemen. According to the petitioner itself, the reason why their bargemen are given living quarters in their barges and
subsistence allowance at the rate of P1.50 per day was because they were required to stay in their respective barges in order that they
could be immediately called to duty when their services were needed (Petition, par. 5, p. 2). Petitioner having already paid Malondras
and his companions overtime for 1957 without deduction of the subsistence allowances received by them during this period, and
Malondras' companions having been paid overtime for the other years also without deducting their subsistence allowances, there is no
valid reason why Malondras should be singled out now and his subsistence allowance deducted from the overtime compensation still
due him.

The last question involves petitioner's claim that it was error for the examiner to base Malondras' overtime compensation for the whole
year 1954 at P6.16 a day, when he was appointed in the tubgoat service only on October 1, 1954, and before that was a derrick man
with a daily salary of P6.00. In answer, respondent Malondras asserts that the report of the examiner, based on his time sheets from
January 1, 1954, show that he had already been rendering overtime service from that date. This answer does not, however, deny that
Malondras started to get P6.16 a day only in October, 1954, and was before that time receiving only P6.00 daily, as claimed by
petitioner. We think, therefore, that the records should be reexamined to find out Malondras' exact daily wage from January 1, 1954 to
September, 1954, and his overtime compensation for these months computed on the basis thereof.

WHEREFORE, the order appealed from is modified in the sense that respondent Malondras should be credited five (5) overtime hours
instead of sixteen (16) hours a day for the periods covered by the examiner's report. The court below is ordered to determine from the
records the exact daily wage received by respondent Malondras from January 1, 1954 to September, 1954, and to compute accordingly
his overtime compensation for that period. In all other respects, the judgment appealed from is affirmed. No costs in this instance. So
ordered.

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