National Sugar Refineries Corporation v.

NLRC

Facts:

Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully

owned and controlled by the Government, operates three (3) sugar refineries located at
Bukidnon, Iloilo and Batangas. Private respondent union represents the former supervisors of
the NASUREFCO Batangas Sugar Refinery.

In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from
rank-and-file to department heads. We glean from the records that for about ten years prior to
the JE Program, the members of respondent union were treated in the same manner as rank-
and file employees. As such, they used to be paid overtime, rest day and holiday pay
pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended.

With the implementation of the JE Program, members of respondent union were re-classified
under levels S-5 to S-8 which are considered managerial staff for purposes of compensation
and benefits.

In May 1990, petitioner NASUREFCO recognized herein respondent union, which was
organized pursuant to Republic Act NO. 6715 allowing supervisory employees to form their
own unions, as the bargaining representative of all the supervisory employees at the
NASUREFCO Batangas Sugar Refinery.

In June 1990, the members of herein respondent union filed a complainant with the executive
labor arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation of
Article 100 of the Labor Code.

In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages
complained of.

On appeal, in a decision promulgated on July 1991, respondent National Labor Relations

Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the
members of respondent union are not managerial employees, and, therefore, they are entitled
to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory
employees are merely exercising recommendatory powers subject to the evaluation, review
and final action by their department heads.

Issue:

W/N the Supervisors are considered Managerial Employees and should no longer receive
overtime, rest day and holiday pay.

Ruling:

Yes

Ratio:

"Art. 82 Coverage. — The provisions of this title shall apply to employees in all establishments
and undertakings whether for profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer who are dependent on
him for support, domestic helpers, persons in the personal service of another, and workers
who are paid by results as determined by the Secretary of Labor in Appropriate regulations.

"As used herein, 'managerial employees' refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department or
subdivision thereof, and to other officers or members of the managerial staff." (Emphasis
supplied.)
It is the submission of petitioner that while the members of respondent union, as supervisors,
may not be occupying managerial positions, they are clearly officers or members of the
managerial staff because they meet all the conditions prescribed by law and, hence, they are
not entitled to overtime, rest day.

Quintessentially, with the promotion of the union members, they are no longer entitled to the
benefits which attach and pertain exclusively to their positions. Entitlement to the benefits
provided for by law requires prior compliance with the conditions set forth therein. With the
promotion of the members of respondent union, they occupied positions which no longer met
the requirements imposed by law. Their assumption of these positions removed them from
the coverage of the law, ergo, their exemption therefrom.

As correctly pointed out by petitioner, if the union members really wanted to continue
receiving the benefits which attach to their former positions, there was nothing to prevent
them from refusing to accept their promotions and their corresponding benefits. As the saying
goes by, they could not, as a simple matter of law and fairness, get the best of both worlds at
the expense of NASUREFCO.

Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of

management, provided it is done in good faith. In the case at bar, private respondent union
has miserably failed to convince this Court that the petitioner acted implementing the JE
Program. There is no showing that the JE Program was intended to circumvent the law and
deprive the members of respondent union of the benefits they used to receive.
Manila Terminal Co Inc. V. CIR

Facts:

Manila Terminal Company, Inc. hereinafter to be referred as to the petitioner, undertook the
arrastre service in some of the piers in Manila's Port Area at the request and under the control
of the United States Army. The petitioner hired some thirty men as watchmen on twelve-hour
shifts at a compensation of P3 per day for the day shift and P6 per day for the night shift.

The watchmen of the petitioner continued in the service with a number of substitutions and
additions, their salaries having been raised during the month of February to P4 per day for the
day shift and P6.25 per day for the nightshift. The private respondent sent a letter to
Department of Labor requesting that the matter of overtime pay be investigated. But nothing
was done by the Dept of Labor.

Later on, the petitioner instituted the system of strict eight-hour shifts.

The private respondent filed an amended petition with the Court of Industrial Relations
praying, among others, that the petitioner be ordered to pay its watchmen or police force
overtime pay from the commencement of their employment.

By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the
President of the Philippines, the entire police force of the petitioner was consolidated with the
Manila Harvor Police of the Customs Patrol Service, a Government agency under the
exclusive control of the Commissioner of Customs and the Secretary of Finance The Manila
Terminal Relief and Mutual Aid Association will hereafter be referred to as the Association.

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision ordered the
petitioner to pay to its police force but regards to overtime service after the watchmen had
been integrated into the Manila Harbor Police, the has no jurisdiction because it affects the
Bureau of Customs, an instrumentality of the Government having no independent personality
and which cannot be sued without the consent of the State.
The petitioner filed a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Both resolutions were denied.

The public respondent decision was to pay the private respondents their overtime on regular
days at the regular rate and additional amount of 25 percent, overtime on Sundays and legal
holidays at the regular rate only, and watchmen are not entitled to night differential pay for
past services. The petitioner has filed a present petition for certiorari.

Issues:

a. Whether or not the CIR has no jurisdiction to render a money judgment involving obligation
in arrears.

b. Whether or not the agreement under which its police force were paid certain specific wages
for twelve-hour shifts, included overtime compensation.

c. Whether or not the Association is barred from recovery by estoppel and laches.

d. Whether or not the nullity or invalidity of the employment contract precludes any recovery
by the Association.

e. whether or not the Commonwealth Act No. 4444 does not authorize recovery of back
overtime pay.
Held:

The Supreme Court affirmed the appealed decision that the petitioner's watchmen will be
entitled to extra compensation only from the dates they respectively entered the service of the
petitioner, hereafter to be duly determined by the Court of Industrial Relations.

On the first issue, the Court of Industrial Relations has no jurisdiction to award a money
judgment was already overruled by this Court on the case of Detective & protective Bureau,
Inc. vs. Court of Industrial Relations and United Employees Welfare Association that under
Commonwealth Act No. 103 the Court is empowered to make the order for the purpose of
settling disputes between the employer and employee.

On the second issue, based on the case of Detective & Protective Bureau, Inc. vs. Court of
Industrial Relations and United Employees Welfare Association, the law gives them the right
to extra compensation. And they could not be held to have impliedly waived such extra
compensation, for the obvious reason that could not have expressly waived it.

On the third issue, the principle of estoppel and the laches cannot well be invoked against the
Association. it would be contrary to the spirit of the Eight Hour Labor Law, under which as
already seen, the laborers cannot waive their right to extra compensation. If the principle of
estoppel and laches is to be applied, the employee may be compelled to accomplish the
same thing by mere silence or lapse of time, thereby frustrating the purpose of law by
indirection.

On the fourth issue, the employee in rendering extra service at the request of his employer
has a right to assume that the latter has complied with the requirement of the law, and
therefore has obtained the required permission from the Department of Labor. This was
based on the case of Gotamo Lumber Co. vs. Court of Industrial Relations, wherein both
parties are in pari delicto. Moreover, the Eight-Hour Law, in providing that "any agreement or
contract between the employer and the laborer or employee contrary to the provisions of this
Act shall be null avoid ab initio.”

On the fifth issue, based on Fair Labor Standards Act of the United States which provides that
"any employer who violates the provisions of section 206 and section 207 of this title shall be
liable to the employee or employees affected in the amount of their unpaid minimum wages or
their unpaid overtime compensation as the case may be," — a provision not incorporated in
Commonwealth Act No. 444, our Eight-Hour Labor Law.

We cannot agree to the proposition, because sections 3 and 5 of Commonwealth Act 444
expressly provides for the payment of extra compensation in cases where overtime services
are required, with the result that the employees or laborers are entitled to collect such extra
compensation for past overtime work. To hold otherwise would be to allow an employer to
violate the law by simply, as in this case, failing to provide for and pay overtime
compensation.
International Pharmaceuticals v. NLRC
San Miguel Brewery, Inc. V. Democratic Labor Organization
Far East Agricultural Supply Inc. V. Labatique

FACTS:

In March 1996, Lebatique was hired as a driver by FAR EAST AGRICULTURAL SUPPLY,
INC. with a daily wage of P223.50. His job as a driver includes the delivery of animal feeds to
the clients of the company. He must report either in the morning or in the afternoon to make
the deliveries.

On January 24, 2000, Lebatique was suspended by Manuel Uy (brother of FEASI’s General
Manager Alexander Uy) for allegedly using the company vehicle illegally.

On the same day, Lebatique filed a complaint for nonpayment of overtime pay against
Alexander Uy.

Uy summoned Lebatique and asked why he was claiming overtime pay. Lebatique said since
he started working with the company he has never been paid OT pay. Uy consulted with his
brother. On January 29, 2000, Uy told Lebatique to look for another job.

Lebatique then filed an Illegal Dismissal case against the company.

The Labor Arbiter ruled in favor of Lebatique. Uy was ordered to reinstate Lebatique and at
the same time to pay Lebatique his 13th month pay, back wages (time when case was
pending), service incentive leave pay and OT pay – all amounting to P196,659.72.

Uy argued that Lebatique was not dismissed and that he was merely suspended; that he
abandoned his job; and that Lebatique was a field personnel not entitled to overtime pay and
service incentive leave.

ISSUE: Whether or not Lebatique is a field personnel.

HELD: No. Lebatique is a regular employee.

Uy illegally dismissed Lebatique when he told him to look for another job. Judging at the
sequence of event, Lebatique earned the ire of Uy when he filed a complaint for nonpayment
of OT pay on the day Lebatique was suspended by Manuel Uy. Such is not a valid reason for
dismissing Lebatique.

Uy cannot therefore claim that he merely suspended Lebatique.

Further, Lebatique did not abandon his job. His filing of this case is proof enough that he had
no intention to abandon his job.

To constitute abandonment as a just cause for dismissal, there must be:

(a) absence without justifiable reason; and

(b) a clear intention, as manifested by some overt act, to sever the employer-employee
relationship.

None of the above was proven by Uy.

Also, Lebatique is not a field personnel as defined above for the following reasons:
(1) company drivers, including Lebatique, are directed to deliver the goods at a specified time
and place;

(2) they are not given the discretion to solicit, select and contact prospective clients; and

(3) Far East issued a directive that company drivers should stay at the client’s premises
during truck-ban hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.
As a regular employee, Lebatique is entitled to service incentive leave and OT pay.

The Supreme Court affirmed the Labor Arbiter’s decision but remanded the case for properly
computing Lebatique’s OT pay taking in to consideration the company’s time keeping records.

Field Personnel Defined

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.
Mercidar Fishing Corp. V. NLRC

FACTS: This case originated from a complaint filed by Agao against petitioner for illegal
dismissal, violation of P.D. No. 851, and non-payment of five days SIL. Private respondent
had been employed as a “bodegero” or ship’s quartermaster. He complained that he had
been constructively dismissed by petitioner when the latter refused him assignments aboard
its boats. Private respondent alleged that he had been sick and thus allowed to go on leave
without pay for one month 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.

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 .

Labor Arbiter Amansec rendered a decision ordering respondents to reinstate complainant

with backwages, pay him his 13th month pay and incentive leave pay.

Petitioner appealed to the NLRC which dismissed the appeal for lack of merit. The NLRC
dismissed petitioner’s claim that it cannot be held liable for SIL pay by fishermen in its employ
as the latter supposedly are “field personnel” and thus not entitled to such pay under the
Labor Code.

ISSUE: is Agao a field employee, hence not entitled to SIL pay?

HELD: WHEREFORE, the petition is DISMISSED

NO; Agao is NOT a field employee, he is entitled to SIL pay

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.

xxx xxx xxx

“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 SIL pay.

In the case of Union of Pilipro 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

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

xxx xxx xxx

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

Petitioner in said case is contending that such rule added another element not found in the
law. 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

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.
Labor Congress of the Philippines v. NLRC