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AutoBusTransportSystemsIncvsBautista:156367:May16,2005:J.ChicoNazario:SecondDivision:Decision

SECONDDIVISION

[G.R.No.156367.May16,2005]

AUTO BUS TRANSPORT SYSTEMS, INC., petitioner, vs. ANTONIO BAUTISTA,

respondent.
DECISION
CHICONAZARIO,J.:
[1]

[2]

Before Us is a Petition for Review on CertiorariassailingtheDecision andResolution of the

[3]

CourtofAppeals affirming the Decision 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.
THEFACTS
Since 24 May 1995, respondent Antonio Bautista has been employed by petitioner Auto Bus
Transport Systems, Inc. (Autobus), as driverconductor with travel routes ManilaTuguegarao via
Baguio, Baguio Tuguegarao via Manila and ManilaTabuk via Baguio. Respondent was paid on
commissionbasis,sevenpercent(7%)ofthetotalgrossincomepertravel,onatwiceamonthbasis.
On 03 January 2000, while respondent was driving Autobus No. 114 along Sta. Fe, Nueva
Vizcaya,thebushewasdrivingaccidentallybumpedtherearportionofAutobusNo.124,asthelatter
vehiclesuddenlystoppedatasharpcurvewithoutgivinganywarning.
Respondentaverredthattheaccidenthappenedbecausehewascompelledbythemanagement
togobacktoRoxas,Isabela,althoughhehadnotsleptforalmosttwentyfour(24)hours,ashehad
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
repairofthedamagedbusesandthatdespiterespondentspleasforreconsideration,thesamewas
ignoredbymanagement.Afteramonth,managementsenthimaletteroftermination.
Thus, on 02 February 2000, respondent instituted a Complaint for Illegal Dismissal with Money
Claimsfornonpaymentof13thmonthpayandserviceincentiveleavepayagainstAutobus.
Petitioner,ontheotherhand,maintainedthatrespondentsemploymentwasrepletewithoffenses
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
incidentswhereinrespondentwasinvolved.
Furthermore, petitioner avers that in the exercise of its management prerogative, respondents
employmentwasterminatedonlyafterthelatterwasprovidedwithanopportunitytoexplainhisside
regardingtheaccidenton03January2000.
On 29 September 2000, based on the pleadings and supporting evidence presented by the
[4]
parties,LaborArbiterMonroeC.TabinganpromulgatedaDecision, thedispositiveportionofwhich
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reads:
WHEREFORE,allpremisesconsidered,itisherebyfoundthatthecomplaintforIllegalDismissalhasnolegto
standon.ItisherebyorderedDISMISSED,asitisherebyDISMISSED.
However,stillbasedontheabovediscussedpremises,therespondentmustpaytothecomplainantthe
following:
a.his13thmonthpayfromthedateofhishiringtothedateofhisdismissal,presentlycomputedat
P78,117.87
b.hisserviceincentiveleavepayforalltheyearshehadbeeninservicewiththerespondent,
presentlycomputedatP13,788.05.
Allotherclaimsofbothcomplainantandrespondentareherebydismissedforlackofmerit.

[5]

NotsatisfiedwiththedecisionoftheLaborArbiter,petitionerappealedthedecisiontotheNLRC
whichrendereditsdecisionon28September2001,thedecretalportionofwhichreads:
[T]heRulesandRegulationsImplementingPresidentialDecreeNo.851,particularlySec.3provides:
Section3.Employerscovered.TheDecreeshallapplytoallemployersexceptto:
xxxxxxxxx
e)employersofthosewhoarepaidonpurelycommission,boundary,ortaskbasis,performingaspecificwork,
irrespectiveofthetimeconsumedintheperformancethereof.xxx.
Recordsshowthatcomplainant,inhispositionpaper,admittedthathewaspaidonacommissionbasis.
Inviewoftheforegoing,wedeemitjustandequitabletomodifytheassailedDecisionbydeletingtheawardof
13thmonthpaytothecomplainant.
WHEREFORE,theDecisiondated29September2000isMODIFIEDbydeletingtheawardof13thmonthpay.
TheotherfindingsareAFFIRMED.

[6]

Inotherwords,theawardofserviceincentiveleavepaywasmaintained.Petitionerthussoughta
reconsiderationofthisaspect,whichwassubsequentlydeniedinaResolutionbytheNLRCdated31
October2001.
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
Decisiondated06May2002,thedispositiveportionofwhichreads:
WHEREFORE,premisesconsidered,thePetitionisDISMISSEDforlackofmeritandtheassailedDecisionof
[7]

respondentCommissioninNLRCNCRCANo.0265842000isherebyAFFIRMEDintoto.Nocosts.
Hence,theinstantpetition.
ISSUES
1.Whetherornotrespondentisentitledtoserviceincentiveleave
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2. Whether or not the three (3)year prescriptive period provided under Article 291 of the Labor
Code,asamended,isapplicabletorespondentsclaimofserviceincentiveleavepay.
RULINGOFTHECOURT
The disposition of the first issue revolves around the proper interpretation of Article 95 of the
LaborCodevisvisSection1(D),RuleV,BookIIIoftheImplementingRulesandRegulationsofthe
LaborCodewhichprovides:
Art.95.RIGHTTOSERVICEINCENTIVELEAVE
(a)Everyemployeewhohasrenderedatleastoneyearofserviceshallbeentitledtoayearlyservice
incentiveleaveoffivedayswithpay.
BookIII,RuleV:SERVICEINCENTIVELEAVE
SECTION1.Coverage.Thisruleshallapplytoallemployeesexcept:
(d)Fieldpersonnelandotheremployeeswhoseperformanceisunsupervisedbytheemployerincluding
thosewhoareengagedontaskorcontractbasis,purelycommissionbasis,orthosewhoarepaidin
afixedamountforperformingworkirrespectiveofthetimeconsumedintheperformancethereof.
..
A careful perusal of said provisions of law will result in the conclusion that the grant of service
incentiveleavehasbeendelimitedbytheImplementingRulesandRegulationsoftheLaborCodeto
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
notbeunderstoodasaseparateclassificationofemployeestowhichserviceincentiveleaveshallnot
begranted.Rather,itservesasanamplificationoftheinterpretationofthedefinitionoffieldpersonnel
under the Labor Code as those whose actual hours of work in the field cannot be determined with
[8]

reasonablecertainty.

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
ejusdemgeneristhat general and unlimited terms are restrained and limited by the particular terms
[9]
thattheyfollow. Hence,employeesengagedontaskorcontractbasisorpaidonpurelycommission
basisarenotautomaticallyexemptedfromthegrantofserviceincentiveleave,unless,theyfallunder
theclassificationoffieldpersonnel.
Therefore, petitioners contention that respondent is not entitled to the grant of service incentive
leavejustbecausehewaspaidonpurelycommissionbasisismisplaced.Whatmustbeascertained
in order to resolve the issue of propriety of the grant of service incentive leave to respondent is
whetherornotheisafieldpersonnel.
According to Article 82 of 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
reasonablecertainty.ThisdefinitionisfurtherelaboratedintheBureauofWorkingConditions(BWC),
[10]

AdvisoryOpiniontoPhilippineTechnicalClericalCommercialEmployeesAssociation
that:

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whichstates

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Asageneralrule,[fieldpersonnel]arethosewhoseperformanceoftheirjob/serviceisnotsupervisedbythe
employerorhisrepresentative,theworkplacebeingawayfromtheprincipalofficeandwhosehoursanddaysof
workcannotbedeterminedwithreasonablecertaintyhence,theyarepaidspecificamountforrendering
specificserviceorperformingspecificwork.Ifrequiredtobeatspecificplacesatspecifictimes,employees
includingdriverscannotbesaidtobefieldpersonneldespitethefactthattheyareperformingworkawayfrom
theprincipalofficeoftheemployee.[Emphasisours]
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
wayoranother,exercisescontroloverhisemployees.Petitionerfurtherarguesthattheonlycriterion
thatshouldbeconsideredisthenatureofworkoftheemployeeinthat,iftheemployeesjobrequires
that he works away from the principal office like that of a messenger or a bus driver, then he is
inevitablyafieldpersonnel.
Wearenotpersuaded.Atthispoint,itisnecessarytostressthatthedefinitionofafieldpersonnel
isnotmerelyconcernedwiththelocationwheretheemployeeregularlyperformshisdutiesbutalso
withthefactthattheemployeesperformanceisunsupervisedbytheemployer.Asdiscussedabove,
fieldpersonnelarethosewhoregularlyperformtheirdutiesawayfromtheprincipalplaceofbusiness
of the employer and whose actual hours of work in the field cannot be determined with reasonable
certainty.Thus,inordertoconcludewhetheranemployeeisafieldemployee,itisalsonecessaryto
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 employees time and
performanceareconstantlysupervisedbytheemployer.
AsobservedbytheLaborArbiterandconcurredinbytheCourtofAppeals:
Itisofjudicialnoticethatalongtheroutesthatarepliedbythesebuscompanies,thereareitsinspectors
assignedatstrategicplaceswhoboardthebusandinspectthepassengers,thepunchedtickets,andthe
conductorsreports.Thereisalsothemandatoryonceaweekcarbarnorshopday,wherethebusisregularly
checkedastoitsmechanical,electrical,andhydraulicaspects,whetherornotthereareproblemsthereonas
reportedbythedriverand/orconductor.Theytoo,mustbeatspecificplaceas[sic]specifiedtime,asthey
generallyobservepromptdepartureandarrivalfromtheirpointoforigintotheirpointofdestination.Ineach
andeverydepot,thereisalwaystheDispatcherwhosefunctionispreciselytoseetoitthatthebusanditscrew
leavethepremisesatspecifictimesandarriveattheestimatedpropertime.These,arepresentinthecaseatbar.
Thedriver,thecomplainantherein,wasthereforeunderconstantsupervisionwhileintheperformanceofthis
[11]

work.Hecannotbeconsideredafieldpersonnel.

We agree in the above disquisition. Therefore, as correctly concluded by the appellate court,
respondentisnotafieldpersonnelbutaregularemployeewhoperformstasksusuallynecessaryand
desirabletotheusualtradeofpetitionersbusiness.Accordingly,respondentisentitledtothegrantof
serviceincentiveleave.
The question now that must be addressed is up to what amount of service incentive leave pay
respondentisentitledto.
Theresponsetothisqueryinevitablyleadsustothecorrelativeissueofwhetherornotthethree
(3)yearprescriptiveperiodunderArticle291oftheLaborCodeisapplicabletorespondentsclaimof
serviceincentiveleavepay.
Article 291 of the Labor Code states that all money claims arising from employeremployee
relationshipshallbefiledwithinthree(3)yearsfromthetimethecauseofactionaccruedotherwise,
theyshallbeforeverbarred.
IntheapplicationofthissectionoftheLaborCode,thepivotalquestiontobeanswerediswhen
does the cause of action for money claims accrue in order to determine the reckoning date of the
threeyearprescriptiveperiod.
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Itissettledjurisprudencethatacauseofactionhasthreeelements,towit,(1)arightinfavorof
theplaintiffbywhatevermeansandunderwhateverlawitarisesoriscreated(2)anobligationonthe
partofthenameddefendanttorespectornottoviolatesuchrightand(3)anactoromissiononthe
partofsuchdefendantviolativeoftherightoftheplaintifforconstitutingabreachoftheobligationof
thedefendanttotheplaintiff.

[12]

ToproperlyconstrueArticle291oftheLaborCode,itisessentialtoascertainthetimewhenthe
thirdelementofacauseofactiontranspired.Stateddifferently,inthecomputationofthethreeyear
prescriptive period, a determination must be made as to the period when the act constituting a
violationoftheworkersrighttothebenefitsbeingclaimedwascommitted.Forifthecauseofaction
accrued more than three (3) years before the filing of the money claim, said cause of action has
[13]
alreadyprescribedinaccordancewithArticle291.
Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is
establishedthatthebenefitsbeingclaimedhavebeenwithheldfromtheemployeeforaperiodlonger
thanthree(3)years,theamountpertainingtotheperiodbeyondthethreeyearprescriptiveperiodis
thereforebarredbyprescription.Theamountthatcanonlybedemandedbytheaggrievedemployee
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
[15]

monetaryequivalentifnotexhaustedattheendoftheyear. Furthermore,iftheemployeeentitledto
service incentive leave does not use or commute the same, he is entitled upon his resignation or
separationfromworktothecommutationofhisaccruedserviceincentiveleave.Asenunciatedbythe
[16]

CourtinFernandezv.NLRC:

TheclearpolicyoftheLaborCodeistograntserviceincentiveleavepaytoworkersinallestablishments,
subjecttoafewexceptions.Section2,RuleV,BookIIIoftheImplementingRulesandRegulationsprovides
that[e]veryemployeewhohasrenderedatleastoneyearofserviceshallbeentitledtoayearlyserviceincentive
leaveoffivedayswithpay.Serviceincentiveleaveisarightwhichaccruestoeveryemployeewhohasserved
within12months,whethercontinuousorbrokenreckonedfromthedatetheemployeestartedworking,
includingauthorizedabsencesandpaidregularholidaysunlesstheworkingdaysintheestablishmentasamatter
ofpracticeorpolicy,orthatprovidedintheemploymentcontracts,islessthan12months,inwhichcasesaid
periodshallbeconsideredasoneyear.Itisalsocommutabletoitsmoneyequivalentifnotusedorexhaustedat
theendoftheyear.Inotherwords,anemployeewhohasservedforoneyearisentitledtoit.Hemayuseitas
leavedaysorhemaycollectitsmonetaryvalue.Tolimittheawardtothreeyears,asthesolicitorgeneral
[17]

recommends,istoundulyrestrictsuchright.

[Italicssupplied]

Correspondingly, it can be conscientiously deduced that the cause of action of an entitled

employeetoclaimhisserviceincentiveleavepayaccruesfromthemomenttheemployerrefusesto
remunerateitsmonetaryequivalentiftheemployeedidnotmakeuseofsaidleavecreditsbutinstead
chosetoavailofitscommutation.Accordingly,iftheemployeewishestoaccumulatehisleavecredits
andoptsforitscommutationuponhisresignationorseparationfromemployment,hiscauseofaction
toclaimthewholeamountofhisaccumulatedserviceincentiveleaveshallarisewhentheemployer
failstopaysuchamountatthetimeofhisresignationorseparationfromemployment.
ApplyingArticle291oftheLaborCodeinlightofthispeculiarityoftheserviceincentiveleave,we
canconcludethatthethree(3)yearprescriptiveperiodcommences,notattheendoftheyearwhen
theemployeebecomesentitledtothecommutationofhisserviceincentiveleave,butfromthetime
when the employer refuses to pay its monetary equivalent after demand of commutation or upon
terminationoftheemployeesservices,asthecasemaybe.
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TheaboveconstrualofArt.291,visvistherulesonserviceincentiveleave,isinkeepingwiththe
rudimentaryprinciplethatintheimplementationandinterpretationoftheprovisionsoftheLaborCode
and its implementing regulations, the workingmans welfare should be the primordial and paramount
[18]

consideration. The policy is to extend the applicability of the decree to a greater number of
employeeswhocanavailofthebenefitsunderthelaw,whichisinconsonancewiththeavowedpolicy
[19]

oftheStatetogivemaximumaidandprotectiontolabor.

Inthecaseatbar,respondenthadnotmadeuseofhisserviceincentiveleavenordemandedfor
itscommutationuntilhisemploymentwasterminatedbypetitioner.Neitherdidpetitionercompensate
hisaccumulatedserviceincentiveleavepayatthetimeofhisdismissal.Itwasonlyuponhisfilingofa
complaintforillegaldismissal,onemonthfromthetimeofhisdismissal,thatrespondentdemanded
fromhisformeremployercommutationofhisaccumulatedleavecredits.Hiscauseofactiontoclaim
thepaymentofhisaccumulatedserviceincentiveleavethusaccruedfromthetimewhenhisemployer
dismissedhimandfailedtopayhisaccumulatedleavecredits.
Therefore, the prescriptive period with respect to his claim for service incentive leave pay only
commencedfromthetimetheemployerfailedtocompensatehisaccumulatedserviceincentiveleave
payatthetimeofhisdismissal.Sincerespondenthadfiledhismoneyclaimafteronlyonemonthfrom
thetimeofhisdismissal,necessarily,hismoneyclaimwasfiledwithintheprescriptiveperiodprovided
forbyArticle291oftheLaborCode.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed
DecisionoftheCourtofAppealsinCAG.R.SP.No.68395isherebyAFFIRMED.NoCosts.
SOORDERED.
Puno,(Chairman),AustriaMartinez,Callejo,Sr.,andTinga,JJ.,concur.
[1]

[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]

CAG.R.SPNo.68395,dated06May2002,pennedbyAssociateJusticeAndresB.Reyes,Jr.withAssociateJustices
ConradoM.Vasquez,Jr.andMarioL.Guaria,III,concurring.
Dated12December2002.
NLRCNCRCANo.0265842000(NLRCCaseNo.RABCAR02008800),dated28September2001.
NLRCCaseNo.RABCAR02008800.
Rollo,pp.4647.
Rollo,pp.5253.
CADecision,p.10Rollo,p.24.
SeeMercidarFishingCorporationv.NLRC,G.R.No.112574,08October1998,297SCRA440.
CebuInstituteofTechnologyv.Ople,G.R.No.L58870,18December1987,156SCRA629,672,citingVerav.Cuevas,
G.R.No.L33693,31May1979,90SCRA379.

[10]
[11]

06April1989Rollo.p.20.

Rollo,pp.4546.

[12]

[13]

Baliwag Transit, Inc. v. Ople, G.R. No. 57642, 16 March 1989, 171 SCRA 250, citing Agric. Credit & Cooperative
FinancingAdministrationv.AlphaIns.&SuretyCo.,Inc.,G.R.No.L24566,29July1968,24SCRA151Summit
Guaranty and Insurance Co., Inc. v. De Guzman, G.R. No. L50997, 30 June 1987, 151 SCRA 389 Tormon v.
Cutanda,G.R.No.L18785,23December1963,9SCRA698.
SeeDeGuzman,etal.v.CAandNasipitLumberCo.,G.R.No.132257,12October1998,297SCRA743.

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[14]
[15]
[16]
[17]
[18]

[19]

AutoBusTransportSystemsIncvsBautista:156367:May16,2005:J.ChicoNazario:SecondDivision:Decision

SeeE.Ganzon,Inc.v.NLRC,G.R.No.123769,22December1999,321SCRA434.
Fernandezv.NLRC,G.R.No.105892,28January1998,349Phil65.
Ibid.
Ibid.,pp.9495.
Abella v. NLRC, G.R. No. L71813, 20 July 1987, 152 SCRA 140, citingVolkschel Labor Union v. Bureau of Labor
Relations,G.R.No.L45824,19June1985,137SCRA43.
Sarmiento v. Employees Compensation Commission, G.R. No. L68648, 24 September 1986, 144 SCRA 421, citing
Cristobalv.EmployeesCompensationCommission,G.R.No.L49280,26February1981,103SCRA329Acosta
v.EmployeesCompensationCommission,G.R.No.L55464,12November1981,109SCRA209.

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