1.1 penaranda vs baganga plywood G.R.

# 159577 "WHEREFORE, premises considered, the decision of the Labor Arbiter below awarding overtime
site: complainant is hereby REVERSED and SET ASIDE, and the complaint in the above-entitled case di
https://www.lawphil.net/judjuris/juri2006/may2006/gr_159577_2006.htm
l The Facts
LAWPHIL
Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywo
the operations and maintenance of its steam plant boiler.6 In May 2001, Peñaranda filed a Compla
against BPC and its general manager, Hudson Chua, before the NLRC.7

After the parties failed to settle amicably, the labor arbiter8 directed the parties to file their positi
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 [B
salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was illegally terminated on Dec
his services [were] terminated without the benefit of due process and valid grounds in accordanc
FIRST DIVISION
his overtime pay, premium pay for working during holidays/rest days, night shift differentials and f
attorney’s fees having been forced to litigate the present complaint.
G.R. No. 159577 May 3, 2006
"Upon the other hand, respondent [BPC] is a domestic corporation duly organized and existing u
CHARLITO PEÑARANDA, Petitioner, herein by its General Manager HUDSON CHUA, [the] individual respondent. Respondents thru c
vs. from service was done pursuant to Art. 283 of the Labor Code. The respondent [BPC] was on te
BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, Respondents.maintenance and it applied for clearance with the Department of Labor and Employment, Regiona
dismiss employees (par. 2 position paper). And due to the insistence of herein complainant he wa
DECISION and D, ibid). Consequently, when respondent [BPC] partially reopened in January 2001, [Peñarand
terminated from employment much less illegally. He opted to severe employment when he insiste
PANGANIBAN, CJ: Furthermore, being a managerial employee he is not entitled to overtime pay and if ever he rende
work, [there] was no office order/or authorization for him to do so. Finally, respondents allege th
Managerial employees and members of the managerial staff are exempted from the provisions factualofbasis and that
the Labor the on
Code instant
laborcomplaint
standards.must necessarily fail for lack of merit."10
Since
petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.
The labor arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint was pre
The Case BPC.11 The temporary closure of BPC’s plant did not terminate his employment, hence, he need n

According
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the January to2 the
27, 2003 andlabor
July 4,arbiter, petitioner’s money
20033 Resolutions of the claims for illegal dismissal was also weakened b
Court of Appeals (CA) in CA-GR SP No. 74358. The earlier Resolution disposed as follows: clarificatory conference that he accepted separation benefits, sick and vacation leave conversions

"WHEREFORE, premises considered, the instant petition is hereby DISMISSED."4 Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay for worki
total amount of P21,257.98.13
The latter Resolution denied reconsideration.
Ruling of the NLRC
On the other hand, the Decision of the National Labor Relations Commission (NLRC) challenged in the CA disposed as follows:
Respondents filed an appeal to the NLRC, which deleted the award of overtime pay and In premium
Atillo v.pay
Bombay,
for working
19 the Court
on restheld
days.
that
According
the crucial issue is whether the documents accompanyin
supported
to the Commission, petitioner was not entitled to these awards because he was a managerial the allegations
employee. 14 therein. Citing this case, Piglas-Kamao v. NLRC20 stayed the dismissal of
jurisdiction to order the adjudication on the merits.
Ruling of the Court of Appeals
The Petition filed with the CA shows a prima facie case. Petitioner attached his evidence to challe
employee.
In its Resolution dated January 27, 2003, the CA dismissed Peñaranda’s Petition for Certiorari. In his Motion
The21appellate court for
heldReconsideration,
that he failed to:petitioner
1) also submitted the pleadings before the
thewhy
attach copies of the pleadings submitted before the labor arbiter and NLRC; and 2) explain CA the
rules. 22 Evidently, the CA could have ruled on the Petition on the basis of these attachme
filing and service of the Petition was not
done by personal service.15 substantial compliance with the procedural requirements.

Under
In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground that these extenuating
petitioner still failed tocircumstances, the Court does not hesitate to grant liberality in favor of
submit the pleadings
filed before the NLRC. 16 arguments in the present case. Rules of procedure must be adopted to help promote, not frustrat
upon the practice of dismissing cases purely on procedural grounds.24 Considering that there was
Hence this Petition.17 interpretation of procedural rules in this labor case is more in keeping with the constitutional ma

The Issues First Issue:

Petitioner states the issues in this wise: Timeliness of Appeal

Underwhen
"The [NLRC] committed grave abuse of discretion amounting to excess or lack of jurisdiction the Rules of Procedure
it entertained of the NLRC,
the APPEAL of the an appeal from the decision of the labor arbiter shou
respondent[s] despite the lapse of the mandatory period of TEN DAYS. thereof.
1avv phil. net
27

Petitioner’s
"The [NLRC] committed grave abuse of discretion amounting to an excess or lack of jurisdiction claim
when that respondents
it rendered filed their appeal beyond the required period is not substantia
the assailed
fails to indicate
RESOLUTIONS dated May 8, 2002 and AUGUST 16, 2002 REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL FINDINGS when respondents received the Decision
of of the labor arbiter. Neither did the pet
the [labor arbiter] with respect to the following: appeal. Thus, this Court has no means to determine from the records when the 10-day period co
utterly failed to support his claim that respondents’ appeal was filed out of time, we need not bela
the burden of substantiating their allegations.28
"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].
Second Issue:
"II. The finding that [Peñaranda] is entitled to the payment of OVERTIME PAY and OTHER MONETARY BENEFITS."18
Nature of Employment
The Court’s Ruling
Petitioner claims that he was not a managerial employee, and therefore, entitled to the award gra
The Petition is not meritorious.
Article 82 of the Labor Code exempts managerial employees from the coverage of labor standard
conditions of employees, including entitlement to overtime pay and premium pay for working on
Preliminary Issue:
managerial employees are "those whose primary duty consists of the management of the establish
department or subdivision."30
Resolution on the Merits
The Implementing Rules of the Labor Code state that managerial employees are those who meet
The CA dismissed Peñaranda’s Petition on purely technical grounds, particularly with regard to the failure to submit supporting documents.
 "(1) Their primary duty consists of the management of the establishment in which they are"7.employed
To recommend
or of apersonnel
departmentactions
or such as: promotion, or disciplinary action.
subdivision thereof;
"8. To check water from the boiler, feedwater and softener, regenerate softener
"(2) They customarily and regularly direct the work of two or more employees therein;
"9. Implement Chemical Dosing.
"(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
"10. Perform other particular
task as required by the superior from time to time."34
weight."31
The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner was a mem
The Court disagrees with the NLRC’s finding that petitioner was a managerial employee.responsibilities
However, petitioner
conformwastoa the
member of the
definition of a member of a managerial staff under the Implementin
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
Petitioner of the Labor
supervised Code define
the engineering members
section of steam plant boiler. His work involved overse
of the
a managerial staff as those with the following duties and responsibilities: performance of the workers in the engineering section. This work necessarily required the use of
ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is deemed a me
"(1) The primary duty consists of the performance of work directly related to management policies of the employer;
Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he stated t
"(2) Customarily and regularly exercise discretion and independent judgment;operation of the boiler.36 The term foreman implies that he was the representative of managemen
the department.37 Petitioner’s evidence also showed that he was the supervisor of the steam plan
"(3) (i) Regularly and directly assist a proprietor or a managerial employeeevident
whosefrom
primary
the manner
duty consists
his salary
of the
wasmanagement
paid. He belonged to the 10% of respondent’s 354 employ
of the establishment in which he is employed or subdivision thereof; or (ii) execute
others wereunder general
paid only on asupervision
daily basis.39work along
specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision
special assignments and tasks; and On the basis of the foregoing, the Court finds no justification to award overtime pay and premium

"(4) who do not devote more than 20 percent of their hours worked inWHEREFORE,
a workweek tothe activities
Petitionwhich are not Costs
is DENIED. directly and petitioner.
against
closely related to the performance of the work described in paragraphs (1), (2), and (3) above."33
SO ORDERED.
As shift engineer, petitioner’s duties and responsibilities were as follows:
ARTEMIO V. PANGANIBAN
"1. To supply the required and continuous steam to all consuming units Chief
at minimum
Justice cost.
Chairman, First Division
"2. To supervise, check and monitor manpower workmanship as well as operation of boiler and accessories.
WE CONCUR:
"3. To evaluate performance of machinery and manpower.

"4. To follow-up supply of waste and other materials for fuel. CONSUELO YNARES-SANTIAGO MA. ALICIA A
Associate Justice Assc
"5. To train new employees for effective and safety while working.

"6. Recommend parts and supplies purchases. ROMEO J. CALLEJO, SR. MINITA V.
Associate Justice Assc
 14 NLRC Resolution dated May 8, 2002, p. 2; rollo, p. 33.
CERTIFICATION
15 Assailed CA Resolution dated January 27, 2003, pp. 1-2; rollo, pp. 298-299.
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s Division. 16 Assailed CA Resolution dated July 4, 2003, p. 1; id. at 51.

ARTEMIO V. PANGANIBAN 17This Petition was deemed submitted for decision on June 29, 2005 upon this C
Chief Justice Memorandum, which he signed with the assistance of Atty. Angela A. Librado. Re
Leo N. Caubang, was received by this Court on May 26, 2005.

18 Petitioner’s Memorandum, pp. 5-6; rollo, pp. 268-269.

Footnotes
19 351 SCRA 361, February 7, 2001.
1 Rollo, pp. 4-11.
357 SCRA 640, May 9, 2001.
20

2 Id. at 64-65 & 298-299. Former Sixteenth Division. Penned by Justice Rodrigo V. Cosico (Division chairperson), with the
concurrence of Justices Rebecca de Guia-Salvador and Regalado E. Maambong (members). 21 Petitioner attached his pay slips and job designation, and the company’s manpo

(CA rollo, pp. 20-31).

3 Id. at 51-52.

22 Petitioner submitted the parties’ position papers before the labor arbiter and t

4 Id. at 65 & 299. rollo, pp. 43-64).

5 Id. at 34. 23Chua v. Absolute Management Corporation, 412 SCRA 547, October 16, 2003
Sison, 359 Phil. 332, November 20, 1998; Gregorio v. Court of Appeals, 72 SCR
6 Petitioner’s Memorandum, p. 3; rollo, p. 266.
24Pacific Life Assurance Corporation v. Sison, id.; Empire Insurance Company v.
7 Id. at 2; id. at 265. Phil. 694, August 14, 1998; People Security Inc. v. National Labor Relations Com
1993; Tamargo v. Court of Appeals, 209 SCRA 518, June 3, 1992.
8 The labor arbiter assigned to the case was Arturo L. Gamolo.
25 Chua v. Absolute Management Corporation, supra note 23; Cusi-Hernandez v
9 Decision of the Labor Arbiter, p. 1; rollo, p. 21.
26Constitution Art. II, Sec. 18 and Art. XIII, Sec. 3. See Ablaza v. Court of Indust
21, 1983.
10 Id. at 2; id. at 22.
27 New Rules of Procedure of the National Labor Relations Commission, Rule VI
11 Id. at 3; id. at 23.
28 Rules of Court, Rule 131, Sec. 1.
12 Id. at 4; id. at 24.
29 Labor standards is found in Book 3 of the Labor Code, entitled "Conditions of
13 Id. at 5; id. at 25.
 "Arts. 87. Overtime work. – Work may be performed beyond eight (8) hours a day 36 Petitioner’s
provided that
Position
the employee
Paper, p. 1;
is rollo, p. 14.
paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five
(25%) per cent thereof. Work performed beyond eight hours on a holiday or rest day shall beThird
37 Webster’s paid an
Newadditional
International Dictionary, 889 (1976).
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent
thereof." 38 Servicing Schedule, submitted as petitioner’s Annex to his Memorandum; rollo

"Art. 93. Compensation for rest day, Sunday or holiday work. – (a) Where an employee is made Termination
39 Respondent’s or permittedReport
to submitted to the Department of Labor and
work on his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only
when it is his established rest day.
The Lawphil Project - Arellano Law Foundation
(b) When the nature of the work of the employee is such that he has no regular workdays and no regular
rest days can be scheduled, he shall be paid an additional compensation of at least thirty percent (30%) of
his regular wage for work performed on Sundays and holidays.

(c) Work performed on any special holiday shall be paid an additional compensation of at least thirty
percent (30%) of the regular wage of the employee. Where such holiday work falls on the employees
scheduled rest day, he shall be entitled to an additional compensation of at least fifty percent (50%) of his
regular wage.

(d) Where the collective bargaining agreement or other applicable employment contract stipulates the
payment of a higher premium pay than that prescribed under this 1.2Article,
San Miguel Corp vs.shall
the employer Layoc
payJr,such
et all GR# 149640
higher rate." Site:
http://sc.judiciary.gov.ph/jurisprudence/2007/october2007/149640.htm
30 The other definition of a managerial employee found in the Labor Code Art. 212(m) is in connection with labor relations
Supreme Court of the Philippines
or the right to engage in unionization. Under this provision, a managerial employee is one "vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay off, recall, discharge, assign
or discipline employees." C. Azucena, Everyone’s Labor Code, 58 (2001 ed.).

31 Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(b). SECOND DIVISION
32 Labor Code, Art. 82.

33 Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(c).

34 Job Description, submitted as petitioner’s Annex to his Memorandum; rollo, p. 312.

35See Quebec v. National Labor Relations Commission, 361 Phil. 555, January 22, 1999; Salazar v. National Labor Relations
Commission, 326 Phil. 288, April 17, 1996; National Sugar Refineries Corporation v. National Labor Relations Commission,
220 SCRA 452, March 24, 1993.
SAN MIGUEL G.R. No. 149640
CORPORATION, ANDRES
SORIANO III, Present:
FRANCISCO C. EIZMENDI,
JR., and FAUSTINO F. QUISUMBING, J.,
GALANG, Chairperson,
Petitioners, CARPIO,
CARPIO MORALES,
TINGA, and
- versus - VELASCO, JR., JJ.

NUMERIANO LAYOC, JR.,

CARLOS APONESTO,
PAULINO BALDUGO,
QUEZON BARIT,
BONIFACIO BOTOR,
HERMINIO CALINA,
DANILO CAMINGAL,
JUAN DE MESA,
REYNOLD DESEMBRANA,
BERNARDITO DEUS,
EDUARDO FILLARTA,
MAXIMIANO
FRANCISCO, MARIO Promulgated:
MARILIM, DEMETRIO
MATEO, FILOMENO October 19, 2007
MENDOZA, CONRADO
NIEVA, FRANCISCO
PALINES, FELIPE
POLINTAN, MALCOLM
SATORRE, and
ALEJANDRO TORRES,
 Respondents. do Nieva, Francisco Palines, Felipe Polintan,
Malcolm Satorre, and Alejandro Torres (collectively,
X---------------------------------------
-----------x respondents) P10,000 each as nominal damages.

DECISION
The Facts
CARPIO, J.:
The Case The appellate court stated the facts as follows:

[Respondents] were among the Supervisory Security

This is a petition for review[1] of the decision[2] promulgated Guards of the Beer Division of the San Miguel
on Corporation (p. 10, Rollo), a domestic corporation duly
organized and existing under and by virtue of the laws
of the Republic of the Philippines with offices at No. 40
29 August 2001 by the Court of Appeals (appellate court) in San Miguel Avenue, Mandaluyong City. They started
CA-G.R. SP No. 55838. The appellate courts decision set working as guards with the petitioner San
aside the decision[3] in NLRC NCR Case No. 00-12-08656- Miguel Corporationassigned to the Beer Division on
94 dated 23 March 1998, the decision[4] dated 27 November
1998, and the resolution[5] dated 31 August 1999 in NLRC
CA No. 015710-98. The appellate court ordered San Miguel different dates until such time that they were promoted
Corporation (SMC), Andres Soriano III, Francisco as supervising security guards. The dates of their
employment commenced as follows (Ibid., pp. 87-89):
C. Eizmendi, Jr., and Faustino F. Galang (collectively,
petitioners) to pay respondent Numeriano Layoc, Jr. As guards As supervising
(Layoc) P125,000, representing overtime pay for services guards
that he could have rendered from January 1993 up to his
a. Aponesto, Carlos June 1970 February 1983
retirement on 30 June 1997, and respondents b. Baldugo, Paulino November May 1984
Carlos Aponesto, Paulino Baldugo, Quezon Barit, Bonifacio 1978
Botor, Herminio Calina, Danilo Camingal, Juan de c. Barit, Quezon January 1969 May 1984
d. Botor, Bonifacio April 1980 January 1987
Mesa, Reynold Desembrana, Bernardito Deus, e. De Mesa, Juan November May 1984
Eduardo Fillarta, MaximianoFrancisco, 1977
Mario Marilim, Demetrio Mateo, Filomeno Mendoza, Conra f. Calina, Herminio February 1976 May 1984
 g. Desembrana, Reynold November April 1983 4. Physically checks and accounts for all company
1976 property within his area of responsibility
h. Camingal, Danilo December December 1985 immediately upon assumption of duty;
1975
i. Deus, Bernardito July 1976 May 1983 5. Updates compilation of local security rules,
j. Fillarta, Eduardo January 1979 May 1989 policies and regulations and ensures that all his
k. Francisco, Maximiano October 1977 May 1984 guards are posted thereon;
l. Layoc, Numeriano June 1974 January 1982
m. Marilim, Mario December June 1984 6. Conducts regular and irregular inspection to
1977 determine his guards compliance with all guard
n. Mateo, Demetrio November March 1984 force instructions, corporate security standards
1976 and procedures;
o. Mendoza, Filomena March 1980 May 1983
p. Palines, Francisco May 1979 May 1985 7. Passes on all official communications, requests,
q. Nieva, Conrado January 1977 June 1987 applications of leaves, etc. and makes his
r. Polintan, Felipe June 1972 May 1983 comments and/or recommendations to his
s. Satorre, Malcolm September May 1984 superior;
1970
t. Torres, Alejandro January 1974 May 1984 8. Systematically and continuously screens the
good performers from the marginal or poor
among his guards; concentrates on teaching and
As supervising security guards, the private respondents
guiding the latter; determines further what
were performing the following functions (Ibid., pp. 202-204):
training and/or skills that should be learned and
submits appropriate report to superior;
1. Supervises the facility security force under his
shift;
9. Corrects, on the spot, all deficiencies noted and
institutes corrective measures within his
2. Inspects all company-owned firearms and authority; recommends commendations for
ammunition and promptly submits report as those guards who deserves [sic] recognition for
regards to discrepancy and/or state of good work;
doubtful/suspected serviceability;
10. Conducts an investigation of all cases coming to
3. Receives and transfers from outgoing to his attention and promptly submits appropriate
incoming supervising security guard all company report to his superiors;
property, all official papers, documents and/or
cases investigated including pieces of evidence
11. Evaluates individual guard performance and
properly labeled and secured; renders efficiency reports in accordance with
standing instructions;
12. Ensures that all his guards are courteous,
respectful and accommodating at all times;
13. Ensures that even those who have been found
violating the facilitys policies, rules and
procedures are professionally treated with
courtesy and understanding to preclude
embarrassment and humiliation;
14. Ensures the maintenance of [a] logbook of all
incidents, communications, personnel and
materials movements;
15. Responds to all calls for assistance;
16. Conducts continuing physical checks of the
facilitys critical and vulnerable areas;
17. Obtains critical security information and passes
it on to his superiors;
18. Assesses the need for extra guard service
requirements;
19. Continuously monitors the personal needs and
problems of his men to his superiors;
20. Acts as Detachment Commander in the latters
absence;
21. Responds to emergencies and activates the
Corporate Security Alerting System as
appropriate; and
22. Performs such other duties as may be required
by his Detachment Commander/Plant Security
Officer.
From the commencement of their employment, the
private respondents were required to punch their time
cards for purposes of determining the time they would
come in and out of the companys work place. Corollary
[sic], the private respondents were availing the benefits
for overtime, holiday and night premium duty through
time card punching (Rollo, p. 89). However, in the early
1990s, the San Miguel Corporation embarked on a
Decentralization Program aimed at enabling the
separate divisions of the San Miguel Corporation to
pursue a more efficient and effective management of
their respective operations (Ibid., p. 99).
As a result of the Decentralization Program, the Beer
Division of the San Miguel Corporation implemented
on January 1, 1993 a no time card policy whereby the
Supervisory I and II composing of the supervising
security guards of the Beer Division were no longer
required to punch their time cards (Ibid., p. 100).
Consequently, on January 16, 1993, without prior
consultation with the private respondents, the time
cards were ordered confiscated and the latter were no
longer allowed to render overtime work (Ibid., p. 117).
However, in lieu of the overtime pay and the premium
pay, the personnel of the Beer Division of the petitioner
San Miguel Corporation affected by the No Time Card
Policy were given a 10% across-the-board increase on
their basic pay while the supervisors who were assigned
in the night shift (6:00 p.m. to 6:00 a.m.) were given night
shift allowance ranging from P2,000.00 to P2,500.00 a
month (Rollo, p. 12).[6]
On 1 December 1994, respondents filed a complaint for
unfair labor practice, violation of Article 100 of the Labor
Code of the Philippines, and violation of the equal protection
clause and due process of law in relation to paragraphs 6 and
8 of Article 32 of the New Civil Code of
the Philippines. Respondents prayed for actual damages for
two years (1993-1994), moral damages, exemplary damages,
and overtime, holiday, and night premium pay.
In their position paper dated 28 February 1995, respondents
stated that the Beer Division of SMC maliciously and
fraudulently refused payment of their overtime, holiday, and
night premium pay from 1 to 15 January 1993 because of the
no time card policy. Moreover, petitioners had no written
authority to stop respondents from punching their time
cards because the alleged memorandum authorizing such
stoppage did not include supervisory security guards. Thus,
the respondents suffered a diminution of benefits, making
petitioners liable for non-payment of overtime, holiday, and
night premium pay.
In their position paper dated 23 February 1995, petitioners
maintained that respondents were supervisory security
guards who were exempt from the provisions of the Labor
Code on hours of work, weekly rest periods, and rest
days. The no time card policy did not just prevent
respondents from punching their time cards, but it also
granted respondents an across-the-board increase of 10% of
basic salary and either a P2,000 or P2,500 night shift
allowance on top of their yearly merit increase. Petitioners
further asserted that the no time card policy was a valid
exercise of management prerogative and that all supervisors
in the Beer Division were covered by the no time card policy,
which classification was distinct and separate from the other
divisions within SMC.
Respondents filed their reply dated 15 March 1995 to
petitioners position paper. Petitioners, on the other hand,
filed their rejoinder dated 27 March 1995 to respondents
reply.Respondents filed a request for admission dated 2 May
1995 to which petitioners filed their reply dated 15 May
1995.
The Ruling of the Labor Arbiter
In his decision dated 23 March 1998, Labor
Arbiter Potenciano S. Canizares, Jr. (Arbiter Canizares)
stated that the principal issue is whether petitioners can, in
their no time card policy, remove the benefits that
respondents have obtained through overtime
services. Arbiter Canizares then stated that the facts and the
evidence are in respondents favor.Arbiter Canizares ruled
that rendering services beyond the regular eight-hour work
day has become company practice. Moreover, petitioners
failed to show good faith in the exercise of their management
prerogative in altering company practice because petitioners
changed the terms and conditions of employment from hours
of work rendered to result only with respect to respondents
and not with other supervisors in
departments. The dispositive portion
Arbiter Canizares decision reads:
WHEREFORE, the [petitioners] are hereby ordered to
restore to the [respondents] their right to earn for
overtime services rendered as enjoyed by the other
employees.
The [petitioners] are further ordered to indemnify the
[respondents] for lost earnings after their terms and
conditions of employment have been unilaterally altered
by the [petitioners], namely in the amount
of P500,000.00 each as computed by the [respondents],
and the [petitioners] failed to refute.
[Petitioners] are furthermore ordered to pay the
[respondents] P100,000.00 each as moral and
exemplary damages.
All other claims are hereby dismissed for lack of
evidence.
SO ORDERED.[7]
On 26 May 1998, petitioners filed their notice of appeal and
memorandum of appeal with the National Labor Relations
Commission (NLRC).
The Ruling of the NLRC
On 27 November 1998, the NLRC affirmed with
modification the ruling of Arbiter Canizares that
other respondents suffered a diminution of benefits as a result of
of the adoption of the no time card policy. The NLRC cited a
well-established rule that employees have a vested right over
existing benefits voluntarily granted to them by their
employer, who may not unilaterally withdraw, eliminate, or
diminish such benefits. In the present case, there was a
company practice which allowed the enjoyment of substantial
additional remuneration.Furthermore, there is no rule
excluding managerial employees from the coverage of the
principle of non-diminution of benefits.
The NLRC ruled thus:
WHEREFORE, the decision appealed from is hereby
AFFIRMED, with slight modification deleting the award
of moral and exemplary damages.
SO ORDERED.[8]
Both petitioners and respondents filed their respective
motions for reconsideration. Petitioners stated that the
NLRC erred in sustaining the award of overtime pay despite
its finding that respondents were managerial
personnel. Furthermore, there was no evidence that
respondents rendered overtime work and respondents
admitted that they never or seldom rendered overtime
work. The award of overtime pay was thus contrary to the
principle of no work, no pay. For their part, respondents
stated that the NLRC erred in deleting the award of moral
and exemplary damages. The implementation of the no time
card policy, the discrimination against them vis-a-vis the
supervising security officers in other divisions of SMC, and
the execution of quitclaims and releases during
the pendency of the case were all attended with bad faith,
thus warranting the award of moral and exemplary damages.
On 31 August 1999, the NLRC further modified
Arbiter Canizares decision. The NLRC ruled thus:
WHEREFORE, the November 27, 1998 Decision of this
Commission is hereby REITERATED with a slight
modification to the effect that the computation of the
[respondents] withdrawn benefits at P125,000.00 yearly
from 1993 should terminate in 1996 or the date of each
complainants retirement, whichever came first.
SO ORDERED.[9]
Petitioners then filed their petition for certiorari before the
appellate court on 16 November 1999.
The Ruling of the Appellate Court
On 29 August 2001, the appellate court set aside the ruling
of the NLRC and entered a new judgment in favor of
respondents. The appellate court stated that there is no legal
issue that respondents, being the supervisory security guards
of the Beer Division of SMC, were performing duties and
responsibilities being performed by those who were
considered as officers or members of the managerial staff as
defined under Section 2, paragraph (c), Rule 1, Book III of the
Implementing Rules of the Labor Code.[10] The appellate
court ruled that while the implementation of the no time
card policy was a valid exercise of management prerogative,
the rendering of overtime work by respondents was a long-
accepted practice in SMC which could not be peremptorily
withdrawn without running afoul with the principles of
justice and equity. The appellate court affirmed the deletion
of the award of actual, moral, and exemplary damages. With
the exception of Layoc, respondents did not present proof
of previous earnings from overtime work and were not
awarded with actual damages. Moreover, the appellate court
did not find that the implementation of the no time card
policy caused any physical suffering, moral shock, social
humiliation, besmirched reputation, and similar injury to
respondents to justify the award of moral and exemplary
damages. Nonetheless, in the absence of competent proof on
the specific amounts of actual damages suffered by
respondents, the appellate court awarded them nominal
damages.
The dispositive portion of the appellate courts decision
reads thus:
WHEREFORE, foregoing considered, the instant
petition is hereby GIVEN DUE COURSE and is
GRANTED. The Decision issued in NLRC NCR CASE
No. 00-12-08656-94 dated March 23, 1998, the
Decision issued in NLRC CA No. 015710-98 dated
November 27, 1998 and the Resolution dated August
 31, 1999, are hereby ANNULLED and SET ASIDE, and
a new judgment is hereby entered ordering the
petitioners to pay as follows:
1) the private respondent Numeriano Layoc, Jr., the
amount of One Hundred Twenty-Five Thousand
(P125,000.00) Pesos per year, representing overtime
pay for overtime services that he could have rendered
computed from the date of the implementation of the
no time card policy or on January 1993 and up to the
date of his retirement on June 30, 1997; and
2) the other private respondents, the amount of Ten
Thousand (P10,000.00) Pesos each as nominal damages.
SO ORDERED.[11]
Dissatisfied with the appellate courts ruling, petitioners filed
a petition before this Court.
The Issues
Petitioners ask whether the circumstances in the present
case constitute an exception to the rule that supervisory
employees are not entitled to overtime pay.
Respondents, on the other hand, question petitioners
procedure. Respondents submit that the Court should
dismiss the present petition because petitioners did not file
a motion for reconsideration before the appellate court.
The Ruling of the Court
The petition has merit.
Requirement of Prior Filing of a
Motion for Reconsideration
It appears that respondents confuse certiorari as a mode of
appeal under Rule 45 of the 1997 Rules of Civil Procedure
with certiorari as an original special civil action under Rule
65 of the same Rules. In Paa v. Court of Appeals,[12] we stated
that:
There are, of course, settled distinctions between a
petition for review as a mode of appeal and a special civil
action for certiorari, thus:
a. In appeal by certiorari, the petition is based on
questions of law which the appellant desires the
appellate court to resolve. In certiorari as an original
action, the petition raises the issue as to whether the
lower court acted without or in excess of jurisdiction
or with grave abuse of discretion.
b. Certiorari, as a mode of appeal, involves the review of
the judgment, award or final order on the merits. The
original action for certiorari may be directed against an
interlocutory order of the court prior to appeal from
the judgment or where there is no appeal or any other
plain, speedy or adequate remedy.
c. Appeal by certiorari must be made within
the reglementary period for appeal. An original action
for certiorari may be filed not later than sixty (60) days
from notice of the judgment, order or resolution sought
to be assailed.
d. Appeal by certiorari stays the judgment, award or
order appealed from. An original action for certiorari,
unless a writ of preliminary injunction or a temporary
restraining order shall have been issued, does not stay
the challenged proceeding.
e. In appeal by certiorari, the petitioner and respondent
are the original parties to the action, and the lower
court or quasi-judicial agency is not to be impleaded.
In certiorari as an original action, the parties are the
aggrieved party against the lower court or quasi-
judicial agency and the prevailing parties, who thereby
respectively become the petitioner and respondents.
f. In certiorari for purposes of appeal, the prior
filing of a motion for reconsideration is not
required (Sec. 1, Rule 45); while in certiorari as an
original action, a motion for reconsideration is a
condition precedent (Villa-Rey Transit vs. Bello, L-
18957, April 23, 1963), subject to certain
exceptions.
g. In appeal by certiorari, the appellate court is in the
exercise of its appellate jurisdiction and power of review
for, while in certiorari as an original action, the higher
court exercises original jurisdiction under its power of
control and supervision over the proceedings of lower
courts. (Emphasis added)
Respondents contention that the present petition should be
denied for failure to file a motion for reconsideration before
the appellate court is, therefore, incorrect.
Overtime Work and Overtime Pay
for Supervisory Employees
Both petitioners and respondents agree that respondents are
supervising security guards and, thus, managerial
employees. The dispute lies on whether respondents are
entitled to render overtime work and receive overtime pay
despite the institution of the no time card policy because (1)
SMC previously allowed them to render overtime work and
paid them accordingly, and (2) supervising security guards in
other SMC divisions are allowed to render overtime work
and receive the corresponding overtime pay.
Article 82[13] of the Labor Code states that the provisions of
the Labor Code on working conditions and rest periods shall
not apply to managerial employees. The other provisions in
the Title include normal hours of work (Article 83), hours
worked (Article 84), meal periods (Article 85), night shift
differential (Article 86), overtime work (Article
87), undertime not offset by overtime (Article 88),
emergency overtime work (Article 89), and computation of
additional compensation (Article 90). It is thus clear that,
generally, managerial employees such as respondents are not
entitled to overtime pay for services rendered in excess of
eight hours a day. Respondents failed to show that the
circumstances of the present case constitute an exception to 1981 474.00 1,781.81
this general rule. 1982 Appointment as No record No record
supervising security guard
1983 947.50 6,304.33
First, respondents assert that Article 100[14] of the Labor
1984 889.00 8,937.00
Code prohibits the elimination or diminution of 1985 898.00 12,337.47
benefits. However, contrary to the nature of benefits, 1986 1,086.60 18,085.34
petitioners did not freely give the payment for overtime 1987 1,039.50 32,109.85
work to respondents. Petitioners paid respondents overtime 1988 633.00 29,126.10
pay as compensation for services rendered in addition to 1989 723.50 39,594.55
the regular work hours.Respondents rendered overtime 1990 376.50 21,873.33
work only when their services were needed after their 1991 149.50 12,694.97
regular working hours and only upon the instructions of their 1992 144.00 17,403.38
superiors. Respondents even differ as to the amount of 1993 0.50 47.69
overtime pay received on account of the difference in the 1994 0.00 0.00
additional hours of services rendered. To 1995 0.00 0.00
[15]
illustrate, Layocs records show the varying number of
hours of overtime work he rendered and the varying Aside from their allegations, respondents were not able to
amounts of overtime pay he received from the years 1978 to present anything to prove that petitioners were obliged to
1981 and from 1983 to 1994: permit respondents to render overtime work and give them
the corresponding overtime pay. Even if petitioners did not
Number of Hours Overtime Pay institute a no time card policy, respondents could not
Worked Overtime Received (in Pesos) demand overtime pay from petitioners if respondents did not
1974 Appointment No record No record render overtime work. The requirement of rendering
as guard
additional service differentiates overtime pay from benefits
1975 No record No record
such as thirteenth month pay or yearly merit increase. These
1976 No record No record
1977 No record No record
benefits do not require any additional service from their
1978 1,424.00 5,214.88 beneficiaries. Thus, overtime pay does not fall within the
1979 1,312.56 5,189.30 definition of benefits under Article 100 of the Labor Code.[16]
1980 1,357.50 5,155.71
Second, respondents allege that petitioners discriminated
against them vis-a-vis supervising security guards in other
SMC divisions. Respondents state that they should be
treated in the same manner as supervising security guards in
the Packaging Products Division, who are allowed to render
overtime work and thus receive overtime pay. Petitioners
counter by saying that the no time card policy was applied to
all supervisory personnel in the Beer Division. Petitioners
further assert that there would be discrimination if
respondents were treated differently from other supervising
security guards within the Beer Division or if other
supervisors in the Beer Division are allowed to render
overtime work and receive overtime pay. The Beer Division
merely exercised its management prerogative of treating its
supervisors differently from its rank-and-file employees, both
as to responsibilities and compensation, as they are not
similarly situated.
We agree with petitioners position that given the discretion
granted to the various divisions of SMC in the management
and operation of their respective businesses and in the
formulation and implementation of policies affecting their
operations and their personnel, the no time card policy
affecting all of the supervisory employees of the Beer
Division is a valid exercise of management prerogative. The
no time card policy undoubtedly caused pecuniary loss to
respondents.[17] However, petitioners granted to
respondents and other supervisory employees a 10% across-
the-board increase in pay and night shift allowance, in
addition to their yearly merit increase in basic salary, to
cushion the impact of the loss. So long as a companys
management prerogatives are exercised in good faith for the
advancement of the employers interest and not for the
purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements, this
Court will uphold them.[18]
WHEREFORE, the petition is GRANTED. The Decision
dated 29 August 2001 of the Court of Appeals in CA-G.R. SP
No. 55838 ordering petitioners San Miguel Corporation,
Andres Soriano III, Francisco C. Eizmendi, Jr., and Faustino
F. Galang to pay Numeriano Layoc, Jr. overtime pay and the
other respondents nominal damages is SET ASIDE. The
complaint of respondents is DISMISSED.
SO ORDERED.
ANTON
IO T.
CARPIO
Associate
Justice
WE CONCUR:
LEONARDO A. QUISUMBING
 Associate Justice
Chairperson
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and

CONCHITA CARPIO DANTE O. TINGA the Division Chairpersons Attestation, I certify that the
MORALES Associate Justice conclusions in the above Decision had been reached in
Associate Justice consultation before the case was assigned to the writer of
the opinion of the Courts Division.

PRESBITERO J. VELASCO, JR.

Associate Justice
REYNATO S.
PUNO
Chief Justice

ATTESTATION
[1]
Under Rule 45 of the 1997 Rules of Civil Procedure.
I attest that the conclusions in the above Decision had been [2]
Rollo, pp. 370-383. Penned by Associate Justice Bennie A. Adefuin-De La Cruz with
reached in consultation before the case was assigned to the Associate Justices Andres B. Reyes, Jr. and Mercedes Gozo-Dadole, concurring.
[3]
writer of the opinion of the Courts Division. [4]
Id. at 128-135.
Id. at 137-146.
[5]
Records, pp. 789-795.

[6]
Rollo, pp. 371-373.
[7]
Id. at 135.
LEONARDO A. [8]
Id. at 145.
QUISUMBING [9]
Records, p. 795.
Associate Justice [10]
Sec. 2. Exemption. The provisions of this rule shall not apply to the following
persons if they qualify for exemption under the conditions set forth herein:
Chairperson xxx
(b) Managerial employees, x x x
(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; 1.3 Ariel David vs. John Macasio GR#195486
(2) Customarily and regularly exercise discretion and independent judgment; Site:
(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
https://www.lawphil.net/judjuris/juri2014/jul2014/gr_195466_2014
employed or subdivision thereof; or (ii) execute under general supervision work .html
along specialized or technical lines requiring special training, experience, or Law Phil
knowledge; or (iii) execute under general supervision special assignments and tasks;
and
(4) Who do not devote more than 20% of their hours worked in a work-week to Republic of the Philippines
activities which are not directly and closely related to the performance of the SUPREME COURT
work described in paragraphs (1), (2) and (3) above. Manila
[11]
Rollo, p. 383.
SECOND DIVISION
[12]
347 Phil. 122, 136-137 (1997) citing FLORENZ D. REGALADO, REMEDIAL LAW
COMPENDIUM 543-544 (6th ed. 1997). G.R. No. 195466 July 2, 2014
[13]
Art. 82. Coverage. The provisions of this Title [Working Conditions and Rest
ARIEL L.whether
Periods] shall apply to employees in all establishments and undertakings DAVID,fordoing business under the name and style "YIELS HOG DEALER," Petitioner,
profit or not, but not to government employees, managerial vs. employees, field
personnel, members of the family of the employer who are JOHN dependentG. MACASIO,
on him for Respondent.
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 DECISION
regulations.
As used herein, managerial employees refer to those whose primary duty
BRION, J.:
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. We resolve in this petition for review on certiorari1 the challenge to the November 22, 2010 decision2 and the January
xxxx resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 116003. The CA decision annulled and set aside the May 2
[14] the National
Article 100. Prohibition Against Elimination or Diminution of Benefits. Labor
Nothing Relations Commission (NLRC)5 which, in turn, affirmed the April 30, 2009 Decision6 of the Labor A
in this
decision
Book [Conditions of Employment] shall be construed to eliminate or in any way dismissed respondent John G. Macasio's monetary claims.
diminish supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code. The Factual Antecedents
[15]
Records, pp. 131-138.
[16]
See Manila Jockey Club Employees Labor Union PTGWO v. Manila Jockey
In January Club,Macasio
2009, Inc., filed before the LA a complaint7 against petitioner Ariel L. David, doing business under the nam
G.R. No. 167760, 7 March 2007, 517 SCRA 707.
[17] Hog Dealer," for non-payment of overtime pay, holiday pay and 13th month pay. He also claimed payment for moral an
See Records, pp. 49-86.
[18]
San Miguel Brewery Sales Force Union (PTGWO) v. Ople, G.R. and No. attorney’s fees. Macasio also claimed payment for service incentive leave (SIL).8
53515, 8 February
1989, 170 SCRA 25.
Macasio alleged9 before the LA that he had been working as a butcher for David since January 6, 1995. Macasio claimed
effective control and supervision over his work, pointing out that David: (1) set the work day, reporting time and hogs
well as the manner by which he was to perform his work; (2) daily paid his salary of ₱700.00, which was increased from
₱500.00 in 2006 and ₱400.00 in 2005; and (3) approved and disapproved his leaves. Macasio added that David owned t
he work tools and implements; the latter also rented the workplace.InMacasio
its November
further22,
claimed
2010 that
decision,
David
22 the
employs
CA partly
aboutgranted Macasio’s certiorari petition and reversed the NLRC’s ruling
hers and delivery drivers. rendered with grave abuse of discretion.

claimed that he started his hog dealer business in 2005 and that heWhile only has
theten
CAemployees.
agreed withHethe alleged
LAandthat
theheNLRC
hiredthat Macasio was a task basis employee, it nevertheless found Macasio
or chopper on "pakyaw" or task basis who is, therefore, not entitledmonetary
to overtime
claimspay,following
holiday pay
the doctrine
and 13th laid
month
downpayin Serrano v. Severino Santos Transit.23 The CA explained that as a ta
sions of the Implementing Rules and Regulations (IRR) of the Labor Macasio
Code. David
is excluded
pointedfromout the
thatcoverage
Macasio: of(1)holiday,
usually SIL and 13th month pay only if he is likewise a "field personnel." As d
00 p.m. and ends at 2:00 a.m. of the following day or earlier, depending Code,
onathe
"field
volume
personnel"
of the is
delivered
one whohogs;
performs
(2) the work away from the office or place of work and whose regular wor
ount of ₱700.00 per engagement, regardless of the actual number of determined
hours thatwith reasonable
he spent certainty.
chopping In Macasio’s
the delivered hogs; case, the elements that characterize a "field personnel" are evidently
ged to report for work and, accordingly, did not receive any fee when been
no working
hogs were as adelivered.
butcher at David’s "Yiels Hog Dealer" business in Sta. Mesa, Manila under David’s supervision and co
working schedule that starts at 10:00 p.m.
id’s allegations.11 He argued that, first, David did not start his business only in 2005. He pointed to the Certificate of
vid issued in his favor which placed the date of his employment, albeit Accordingly,
erroneously,the in
CA January
awarded
2000.
Macasio’s
Second,claim
he for holiday, SIL and 13th month pay for three years, with 10% attorney’s
ery day which the payroll or time record could have easily proved had monetary
David submitted
award. Thethem CA, in
however,
evidence.denied Macasio’s claim for moral and exemplary damages for lack of basis.

bmissions,13 David claims that Macasio was not his employee as he hired
Davidthe
filed
latter
the on
present
"pakyaw"
petition
or task
afterbasis.
the CAHe also
denied his motion for reconsideration24 in the CA’s January 31, 2011 resol
d the Certificate of Employment, upon Macasio’s request, only for overseas employment purposes. He pointed to the
aang Salaysay,"14 executed by Presbitero Solano and Christopher (Antonio Macasio’s co-butchers), to corroborate his The Petition

In this petition,26 David maintains that Macasio’s engagement was on a "pakyaw" or task basis. Hence, the latter is exclud
decision,15 the LA dismissed Macasio’s complaint for lack of merit. The LA gave
coverage of credence to and
holiday, SIL David’s
13thclaim
month that heDavid reiterates his submissions before the lower tribunals27 and adds that
pay.
pakyaw" or task basis. The LA noted the following facts to support control
this finding:
over(1)
theMacasio
mannerreceived
by whichthe fixed amount
Macasio performed his work and he simply looked on to the "end-result." He also co
work done, regardless of the number of hours that he spent in completing the task and
never compelled of thetovolume
Macasio reportorfornumber
work andof that under their arrangement, Macasio was at liberty to choose whet
hop per engagement; (2) Macasio usually worked for only four hours, beginning
work or notfrom 10:00
as other p.m. upcould
butchers to 2:00 a.m.out
carry of the
his tasks. He points out that Solano and Antonio had, in fact, attested to
the ₱700.00 fixed wage far exceeds the then prevailing daily minimumMacasio’s) ₱382.00. The
wage ofestablished LA added
"pakyawan" that the nature
arrangement that rendered a written contract unnecessary. In as much as Macasio is
hog dealer supports this "pakyaw" or task basis arrangement. employee – who is paid the fixed amount of ₱700.00 per engagement regardless of the time consumed in the performa
that Macasio is not entitled to the benefits he claims. Also, he posits that because he engaged Macasio on "pakyaw" or t
employer-employee
at as Macasio was engaged on "pakyaw" or task basis, he is not entitled relationship
to overtime, holiday, SIL and exists between
13th month pay.them.

The NLRC’s Ruling Finally, David argues that factual findings of the LA, when affirmed by the NLRC, attain finality especially when, as in this
supported by substantial evidence. Hence, David posits that the CA erred in reversing the labor tribunals’ findings and g
ecision, the NLRC affirmed the LA ruling. The NLRC observed that
16 17 monetary claims.
David did not require Macasio to observe an
dule to earn the fixed ₱700.00 wage; and that Macasio had been performing a non-time work, pointing out that
Thetime
xed amount for the completion of the assigned task, irrespective of the Caseconsumed
for the Respondent
in its performance. Since
result and not in terms of the time that he spent in the workplace, Macasio is not covered by the Labor Standards laws
holiday pay, and 13th month pay under the Rules and Regulations Implementing the 13th
Macasio counters thatmonth
he waspay
notlaw.
a task
18
basis employee or a "field personnel" as David would have this Court believe.28
arguments before the lower tribunals and adds that, contrary to David’s position, the ₱700.00 fee that he was paid for
reported
consideration19 but the NLRC denied his motion in its August 11, 2010 for work
resolution, does notMacasio
20 prompting indicatetoa "pakyaw"
elevate hisor task basis employment as this amount was paid daily, regardless of t
petition for certiorari.21 of hogs that he had to chop. Rather, it indicates a daily-wage method of payment and affirms his regular employment sta
that David did not allege or present any evidence as regards the quota or number of hogs that he had to chop as basis f
The CA’s Ruling task basis payment; neither did David present the time record or payroll to prove that he worked for less than eight ho
Moreover, David did not present any contract to prove that his employment was on task basis. As David failed to prov
basis or "pakyawan" agreement, Macasio concludes that he was David’s employee. Procedurally, Macasio points out tha
in the present petition raise purely factual issues that are not proper for a petition for review on certiorari. These issue
 result or on "pakyaw" basis; whether he was a "field personnel"; whether
rendered[.]"
an employer-employee
35 In relation to Articlerelationship
97(6), Article
existed10136 of the Labor Code speaks of workers paid by results or those w
vid; and whether David exercised control and supervision over his work – areofall
in terms the factual in nature
quantity and of
or quality are,their
therefore,
work output which includes "pakyaw" work and other non-time work.
45 petition. He argues that the CA’s factual findings bind this Court, absent a showing that such findings are not
ence or the CA’s judgment was based on a misapprehension of facts. MoreHe importantly,
adds that theby issue of whether
implicitly anthat
arguing employer-
his engagement of Macasio on "pakyaw" or task basis negates employer-emp
p existed between him and David had already been settled by the LADavid 29 and the NLRC30 (as well as by the CA per
would want the Court to engage on a factual appellate review of the entire case to determine the presence or ex
on before this Court dated November 15, 2012),31 in his favor, in therelationship.
separate illegal
Thiscase that hehowever
approach filed against
is notDavid.
authorized under a Rule 45 petition for review of the CA decision rendered
proceeding.
The Issue
First, the LA and the NLRC denied Macasio’s claim not because of the absence of an employer-employee but because o
ound the proper application and interpretation of the labor law provisions
Macasioon is holiday,
paid on pakyaw
SIL and 13th
or task month
basis,paythen
to he
a is not entitled to SIL, holiday and 13th month pay. Second, we conside
pakyaw" or task basis. In the context of the Rule 65 petition before separate
the CA, theillegal
issue
dismissal
is whether
case the
Macasio
CA correctly
filed with the LA, the LA, the NLRC and the CA uniformly found the existence o
rave abuse of discretion in ruling that Macasio is entitled to these labor
employee
standards
relationship.
benefits. 37

The Court’s Ruling In other words, aside from being factual in nature, the existence of an employer-employee relationship is in fact a non-i
reiterate, in deciding a Rule 45 petition for review of a labor decision rendered by the CA under 65, the narrow scope
e petition. the CA correctly determined the presence or absence of grave abuse of discretion on the part of the NLRC. In concre
"did the NLRC gravely abuse its discretion in denying Macasio’s claims simply because he is paid on a non-time basis?"
tions: the Montoya ruling and the factual-issue-bar rule
At any rate, even if we indulge the petitioner, we find his claim that no employer-employee relationship exists baseless.
control
n for review on certiorari of the CA’s decision rendered under a Rule test,38 we find
65 proceeding, thisthat such power
Court’s a relationship exist
of review is in the present case.
atters pertaining to any perceived legal errors that the CA may have committed in issuing the assailed decision. This is
Even a factual
eview for jurisdictional errors, which we undertake in an original certiorari action.review shows the
In reviewing thatlegal
Macasio is David’s
correctness of employee
examine the CA decision based on how it determined the presence or absence of grave abuse of discretion in the
e it and not on the basis of whether the NLRC decision on the merits To of
determine
the case the
wasexistence
correct.32 of
In an
other
employer-employee
words, we relationship, four elements generally need to be considered, nam
are that the CA undertook a Rule 65 review, not a review on appeal, and
of engagement
the NLRC decision
of the employee;
challenged(2)before
the payment
it.33 of wages; (3) the power of dismissal; and (4) the power to control th
conduct. These elements or indicators comprise the so-called "four-fold" test of employment relationship. Macasio’s re
satisfies
s power in a Rule 45 petition limits us to a review of questions of law raisedthis test. the assailed CA decision.34
against

First,
essentially asks the question – whether Macasio is entitled to holiday, SILDavid engaged
and 13th thepay.
month services of Macasio,
This one thus satisfying the element of "selection and engagement of the employee.
is a question
confirmed this fact when, in his "Sinumpaang
ation of this question of law however is intertwined with the largely factual issue of whether Macasio falls within the Salaysay," he stated that "nag apply po siya sa akin at kinuha ko siya na cho
Solano and Antonio stated in their "Pinagsamang
o these claims or within the exception. In either case, the resolution of this factual issue presupposes another factual Sinumpaang Salaysay"40 that "[k]ami po ay nagtratrabaho sa Yiels xxx na
esence of an employer-employee relationship between David and Macasio.David bilang butcher" and "kilalanamin si xxx Macasio na isa ring butcher xxx ni xxx David at kasama namin siya sa amin

Second,the
s Court that Macasio was not his employee, David argues that he engaged David
latterpaid
on Macasio’s
"pakyaw" or wages.Both
task basis.David
Very and Macasio categorically stated in their respective pleadings before the
even before this Court that the former
fuses engagement on "pakyaw" or task basis with the lack of employment relationship. Impliedly, David asserts that had been paying the latter ₱700.00 each day after the latter had finished the day
Antonio
ask basis arrangement negates the existence of employment relationship. also confirmed this fact of wage payment in their "Pinagsamang Sinumpaang Salaysay."41 This satisfies the elemen
wages."
ect this assertion of the petitioner. Engagement on "pakyaw" or task basis does not characterize the relationship that
Third, David
e parties, i.e., whether one of employment or independent contractorship. Articlehad beenofsetting
97(6) the day
the Labor Code anddefines
time when Macasio should report for work. This power to determine the wo
muneration or earnings, however designated, capable of being expressedobviously implies
in terms power of
of money, control.
whether By having
fixed or the power to control Macasio’s work schedule, David could regulate Mac
could
, task, piece, or commission basis, or other method of calculating the even
same, refuse
which to give by
is payable himanany assignment,
employer to anthereby effectively dismissing him.
itten or unwritten contract of employment for work done or to be done, or for services rendered or to be
d the right and power to control and supervise Macasio’s work as toLabor the means
Code and methods
the Rulesofand performing
Regulationsit. In
Implementing PD No. 851. Uniformly, these provisions exempt workers pai
e day and time when Macasio should report for work, the established facts
task show
basis fromthat
theDavid rentsofthe
coverage place where
holiday, SIL and 13th month pay.
forming his tasks. Moreover, Macasio would leave the workplace only after he had finished chopping all of the hog
r the day’s task. Also, David would still engage Macasio’s services and have him report
In reversing fortribunals’
the labor work even duringthe
rulings, theCAdays
similarly relied on these provisions, as well as on Section 1, Rule V of th
were delivered for butchering. Code and the Court’s ruling in Serrano v. Severino Santos Transit.46 These labor law provisions, when read together wi
exempt those engaged on "pakyaw" or task basis only if they qualify as "field personnel."
up, all those working for David, including Macasio, could naturally be expected to observe certain rules and
vid would necessarily exercise some degree of control as the chopping of thewords,
In other hog meats
what would
we have be before
subjectustoishis
largely a question of law regarding the correct interpretation of these labor
nce Macasio performed his tasks at David’s workplace, David couldthe easily exercise control
implementing rules; and supervision
although, over the
to conclude that the worker is exempted or covered depends on the facts and in this
whether or not David actually exercised this right or power to control is beside
of fact: the pointMacasio
first, whether as the law
is a simply requires and second, whether those engaged on "pakyaw" or task basis, but
"field personnel";
power to control 4243 or, as in this case, the existence of the right andpersonnel,"
opportunity aretoexempted
control and supervise
from Macasio.
the coverage of 44holiday, SIL and 13th month pay.

the surrounding circumstances of the present case sufficiently points Totoput

anour
employer-employee
discussion within relationship existing
the perspective of a Rule 45 petition for review of a CA decision rendered under Rule 65
acasio. question form, the legal question is whether the CA correctly ruled that it was grave abuse of discretion on the part of
Macasio’s monetary claims simply because he is paid on a non-time basis without determining whether he is a field pers
n "pakyaw" or task basis
To resolve these issues, we need tore-visit the provisions involved.
e that all three tribunals – the LA, the NLRC and the CA – found that Macasio was engaged or paid on "pakyaw" or
finding binds the Court under the rule that factual findings of laborProvisions
tribunals when supported
governing byholiday
SIL and the established
pay facts
e laws, especially when affirmed by the CA, is binding on this Court.
Article 82 of the Labor Code provides the exclusions from the coverage of Title I, Book III of the Labor Code - provisi
cteristic of "pakyaw" or task basis engagement, as opposed to straight-hour
working wage payment,
conditions is theperiods.
and rest non-consideration of
king. In a task-basis work, the emphasis is on the task itself, in the sense that payment is reckoned in terms of
rk, not in terms of the number of time spent in the completion of work. 45 Once the work or task is completed, the
Art. 82. Coverage.— The provisions of [Title I] shall apply to employees in all establishments and undertakings whether
ed amount as wage, without regard to the standard measurements of but notgenerally
time used inemployees,
to government pay computation.
managerial employees, field personnel, members of the family of the employer who
him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as
established facts show that he would usually start his work at 10:00Secretary
p.m. Thereafter,
of Laborregardless of theregulations.
in appropriate total hours that
place or of the total number of the hogs assigned to him for chopping, Macasio would receive the fixed amount of
completed his task. Clearly, these circumstances show a "pakyaw" or task basis engagement that all three tribunals xxxx

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal p
of employment relationship between the parties is determined by applying the "four-fold"
branch office test; engagement
of the employer and whoseonactual hours of work in the field cannot be determined with reasonable certai
s does not determine the parties’ relationship as it is simply a method of pay computation.
underscores ours] Accordingly, Macasio is
eit engaged on "pakyaw" or task basis.
Among the Title I provisions are the provisions on holiday pay (under Article 94 of the Labor Code) and SIL pay (under
avid paid on pakyaw or task basis, we now go to the core issue of whether Macasio
Labor Code). is entitled
Under Articleto82,"field
holiday,personnel"
13th month,
on one hand and "workers who are paid by results" on the other hand
the Title I provisions. The wordings of Article82 of the Labor Code additionally categorize workers "paid by results" an
separate and distinct types of employees who are exempted from the Title I provisions of the Labor Code.
sio’s entitlement to holiday, SIL and 13th month pay
The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the IRR47 reads:
casio’s claims pursuant to Article 94 of the Labor Code in relation to Section 1, Rule IV of the IRR of the Labor Code,
Labor Code, as well as Presidential Decree (PD) No. 851. The NLRC, on the other hand, relied on Article 82 of the
day pay. (a) Every worker shall be paid his regular daily wage during The
regular
arguable
holidays,
interpretation
except in retail
of this
andrule
service
may be conceded to be within the discretion granted to the LA and NLRC as th
rly employing less than (10) workers[.] [emphasis ours] bodies with expertise on labor matters.

xxxx However, as early as 1987 in the case of Cebu Institute of Technology v. Ople49 the phrase "those who are engaged on
basis" in the rule has already been interpreted to mean as follows:
e. – This Rule shall apply to all employees except:
[the phrase] should however, be related with "field personnel" applying the rule on ejusdem generis that general and un
xxxx restrained and limited by the particular terms that they follow xxx Clearly, petitioner's teaching personnel cannot be de
which refers "to non-agricultural employees who regularly perform their duties away from the principal place of busine
d other employees whose time and performance is unsupervised bythe theemployer
employer and whosethose
including actualwho
hours
areofengaged
work inonthe field cannot be determined with reasonable certainty. [Par. 3, Arti
, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the timeprivate respondents are not entitled to the service incentive leave benefit can
of the Philippines]. Petitioner's claim that
ormance thereof. [emphases ours] sustained.

In short,
rticle 95 of the Labor Code and its corresponding provision in the IRR the payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of
48 pertinently provides:

They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as "field personne
validly qualifies and limits the general exclusion of "workers paid by results" found in Article 82 from the coverage of ho
ce incentive. (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service
This is the only reasonable interpretation since the determination of excluded workers who are paid by results from th
days with pay.
is "determined by the Secretary of Labor in appropriate regulations."
ll not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at
The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus Transport Systems, Inc., v. Bautista:
ose employed in establishments regularly employing less than ten employees or in establishments exempted from
y the Secretary of Labor and Employment after considering the viability or financial condition of such establishment.
A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been
Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Sec
According to the Implementing Rules, Service Incentive Leave shall not apply to employees classified as "field personnel
xxxx
employees whose performance is unsupervised by the employer" must not be understood as a separate classification of
service incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of
– This rule shall apply to all employees except: under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable certain

xxxx The same is true with respect to the phrase "those who are engaged on task or contract basis, purely commission basis
be related with "field personnel," applying the rule on ejusdem generis that general and unlimited terms are restrained a
d other employees whose performance is unsupervised by the employer including
particular termsthose who follow.
that they are engaged on task or
commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in
eof. [emphasis ours] The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the CA cited in support of granting Macasio

ns, the general rule is that holiday and SIL pay provisions cover all employees.
In Serrano,TothebeCourt,
excluded fromthe
applying their coverage,
rule an generis50 declared that "employees engaged on task or contract bas
on ejusdem
e of those that these provisions expressly exempt, strictly in accordance with the exemption. Under the IRR,
automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field person
coverage of holiday and SIL pay refer to "field personnel and other employees whose
explained that thetime and"including
phrase performancethoseis who are engaged on task or contract basis, purely commission basis" found in
mployer including those who are engaged on task or contract basis[.]" Note that unlike Article 82 of the Labor
of Book III of the IRR should not be understood Code,as a separate classification of employees to which SIL shall not be grant
d SIL pay do not exclude employees "engaged on task basis" as a separate and distinct category from employees
its preceding phrase - "other employees whose performance is unsupervised by the employer" - the phrase "including t
sonnel." Rather, these employees are altogether merged into one classification
engaged on of exempted
task employees.
or contract basis" serves to amplify the interpretation of the Labor Code definition of "field personnel"
actual hours of work in the field cannot be determined with reasonable certainty."
ence, it may be argued that the Labor Code may be interpreted to mean that those who are engaged on task basis, per
the SIL and holiday payment since this is what the Labor Code provisions, in contrast with the IRR, strongly suggest.
ar departure from settled case law, the LA and the NLRC still interpretedcoveragetheofLabor
13th Code
monthprovisions
pay benefits.
andUnder
the IRRSection
as 3(e), "employers of those who are paid on xxx task basis, and thos
ee from the coverage of Title I of the Labor Code based simply andfixed solelyamount
on the for
mode of payment
performing of an employee.
a specific work, irrespective of the time consumed in the performance thereof"55 are exem
regard of this consistent jurisprudential ruling is a clear act of grave abuse of discretion.52 In other words, by dismissing
without considering whether Macasio was a "field personnel" or not,Note the NLRC proceeded
that unlike the IRRbased onLabor
of the a significantly
Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implemen
tion of the case. This action clearly smacks of grave abuse of discretion.
exempts employees "paid on task basis" without any reference to "field personnel." This could only mean that insofar as
month pay is concerned, the law did not intend to qualify the exemption from its coverage with the requirement that t
y pay "field personnel" at the same time.

o ruling speaks only of SIL pay. However, if the LA and the NLRC had WHEREFORE,
only taken counsel
in lightfrom
of these
Serrano
considerations,
and earlier we hereby PARTIALLY GRANT the petition insofar as the payment of 1
e correctly reached a similar conclusion regarding the payment of holiday
respondent
pay since
is concerned.
the rule exempting
In all other"field
aspects, we AFFIRM the decision dated November 22, 2010 and the resolution da
grant of holiday pay is identically worded with the rule exempting "field personnel"
of the Court offrom the in
Appeals grant of SIL SP
CA-G.R. pay. To116003.
No. be
ployees engaged on task or contract basis "found in the IRR on both SIL pay and holiday pay should be read together
f "field personnel." SO ORDERED.

ng whether workers engaged on "pakyaw" or task basis" is entitled to holiday and

ARTURO D.SIL pay, the presence (or absence) of
BRION
as regards the worker’s time and performance is the key: if the worker is simply
Associate engaged on pakyaw or task basis,
Justice
is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under
y) and Article95 (SIL pay) of the Labor Code. However, if the worker WEengaged
CONCUR: on pakyaw or task basis also falls within
personnel" under the law, then he is not entitled to these monetary benefits.
ANTONIO T. CARPIO
under the classification of "field personnel" Associate Justice
Chairperson
n of field personnel under Article 82, we agree with the CA that Macasio does not fall under the definition of "field
finding in this regard is supported by the established facts of this case: first, Macasio regularly performed his duties at
MARIANO C. DEL CASTILLO JOSE PORTUGAL PEREZ
e of business; second, his actual hours of work could be determined with reasonable certainty; and, third, David
Associate Justice Associate Justice
nd performance of duties. Since Macasio cannot be considered a "field personnel," then he is not exempted from the
ay even as he was engaged on "pakyaw" or task basis.
ESTELA M. PERLAS-BERNABE
sonnel," we find the CA to be legally correct when it reversed the NLRC’s ruling dismissing Macasio’s complaint for Associate Justice
r having been rendered with grave abuse of discretion.
ATTESTATION
month pay
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the
opinion
payment of 13th month pay however, we find that the CA legally erred of thethat
in finding Court's Division.
the NLRC gravely abused its
this benefit to Macasio. 1âwphi1

ANTONIO T. CARPIO
13th month pay is PD No. 851.53 Associate Justice
Chairperson, Second Division
IL pay, 13th month pay benefits generally cover all employees; an employee must be one of those expressly
empted. Section 3 of the Rules and Regulations Implementing P.D. No. 85154enumerates the exemptions from the CERTIFICATION
3, Article VIII of the Constitution, and the Division Chairperson's attestation, I certify
16 Supra
that the
note
conclusions
4. in the above
ached in consultation before the case was assigned to the writer of the opinion of the Court's Division.
17 Rollo, pp. 123-139.

P. A. SERENO
18 Presidential Decree No. 851 - "Requiring All Employers to Pay Their Employees a 13th Month Pay."

December 16, 1975.

19 Rollo, pp. 160-176.

20 Id. at 157-159.
lo, pp. 8-30.
Id. at 180-204.
21

ned by Associate Justice Celia C. Librea-Leagogo, and concurred in by Associate Justices Remedios A. Salazar-
ando and Michael P. Elbinias; id. at 32-46. 22 Supra note 2.

at 47-48. 23 G.R. No. 187698, August 9, 2010, 627 SCRA 483.

ned by Presiding Commissioner Herminio V. Suelo; id. at 150-156. 24 Rollo, pp. 49-56.

NLRC LAC No. 07-002073-09 (NLRC NCR Case No. 01-00298-09). 25 Supra note 3.

ned by Labor Arbiter Daniel J. Cajilig; id. at 119-122. 26 Supra note 1.

at 61-63. 27 Although he now claims that he engaged Macasio’s services in 2000 instead of 2005.

d on February 18, 2009; id. at 64-75. 28 Rollo, pp. 223-243.

. 29 Docketed as NLRC OFW Case No. 06-09181-09. Decision dated January 27, 2010; id. at 260- 266.

sition Paper filed on February 18, 2009; id. at 80-86. 30 Docketed as LAC No. 03-000566-10(3)(8)(T-7-10). Resolution dated November 12, 2010; id. at 267

ply by the Complainant; id. at 87-91. 31Id. at 334-338. The CA decision dated November 6, 2012 in CA-G.R. SP No. 118736 affirmed the LA
in the illegal dismissal case (rollo, pp. 340-346). On May 6, 2013, David assailed the CA’s decision in CA
at 76. 118736 before this Court via a petition for certiorari. The case was docketed as G.R. No. 206735. In a
July 15, 2013, the Court dismissed David’s petition for being a wrong remedy and for failure to show a
spondent’s Reply; id. at 92-96. discretion in the assailed CA decision.

at 99-100. 32 Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009, 597 SCRA 334, 342-3

pra note 5.
 reer Philippines Shipmanagement, Inc. v. Serna, G.R. No. 172086, December 3, 2012,42 686 Jaime
SCRAN. Gapayao
676, 683-684,
v. Rosario
citingFulo, et al., G.R. No. 193493, June 13, 2013.
toya v. Transmed Manila Corporation, supra note 30.
43 Ibid.

e Basay v. Hacienda Consolacion, G.R. No. 175532, April 19, 2010, 618 SCRA 422, 434. "A question of law exists when
doubt or controversy concerns the correct application of law or jurisprudence to a certain setaddition
44 But, in of factsto
xxx.
theInabove
contrast,
circumstances that clearly meet the "four-fold test," three other circum
estion of fact exists when the doubt or difference arises as to the truth or falsehood "economic
of facts or dependence
when the querytest"invites
strengthen the conclusion of the parties’ relationship as one of employer
ration of the whole evidence[.]" (Cosmos Bottling Corp. v. Nagrama, Jr., 571 Phil. 281, 296 v.(2008),
Sevilla Courtciting Republic
of Appeals, 243v. Phil. 340, 348-349 [1988]). For one, Macasio had been performing wor
iganbayan, G.R. No. 135789, January 31, 2002, 375 SCRA 425). necessary and desirable to the usual trade and business of David. The facts show that David is a hog de
meats to his customers in the wet market. He engages butchers, such as Macasio, to butcher and chop
phases ours. distribution to his customers. Clearly, Macasio’s work as a butcher qualifies as necessary and desirable
dealer business.
ticle 101 of the Labor Code reads in full -
Another, David had been repeatedly and continuously engaging Macasio’s services to perform
"Art. 101. Payment by results. task of butchering hogs or hog meats since 2000. David categorically confirmed, in his various
continuous and repeated hiring or engagement of Macasio, albeit, insisting that the engagemen
The Secretary of Labor and Employment shall regulate the payment of wages by results, includingtask basis.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’ andLastly, Macasio regularly reported for work to earn the ₱700.00 fee. He would likewise ask fo
employer’s
organizations." David for his and his family’s needs. David’s "Sinumpaang Salaysay"44 confirms this observation
he refused to give Macasio another cash advance as the latter already had several unpaid cash
is decision lapsed to finality upon the denial of David’s petition for review filed with the Court. clearly show that Macasio looked on to David for the former’s daily financial needs in the form

45 I C.A. Azucena, Jr., The Labor Code, 186 (Ed. 8, 2013).

these elements, the power to control is the most important criterion. Under the "control test," the important
tion to ask is whether the employer controls or has reserved the right to control the employee not only as to the
46 Supra note 23.
t of the work but also as to the means and methods by which the result is to be accomplished. We should, however,
hasize that the control test simply calls for the existence of the right to control and not necessarily the actual exercise
is right. To be clear, the test does not require that the employer actually supervises 47the performance
Section of of
1, Rule IV duties
Bookby3.the
oyee. (Javier v. Fly Ace Corporation, supra, at 397-398; Chavez v. NLRC, 489 Phil. 444, 456 (2005); See Basay v.
enda Consolacion, G.R. No. 175532, April 19, 2010, 618 SCRA 422, 434). 48 Section 1, Rule V of Book 3.

llo, pp. 97-98. In paragraph 1 of David’s "Sinumpaang Salaysay," he stated: 49 G.R. No. L- 58870, 18 December 1987.

"1. xxx Ang katotohanan po ay nag apply po siya sa akin at kinuha ko siya na choppersa kasunduan
50 The general and na pakyawan.
unlimited terms are restrained and limited by the particular terms that they follow.
₱700.00 ang 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 medaling araw o mas maaga pa dito kung kaunti lang
51 Serrano ang delivery
v. Severino ng Transit, supra note 22, at 492-493; emphasis supplied, underscore ours.
Santos
baboy." (emphasis ours)
52In case the LA and the NLRC cites a contrary jurisprudential ruling that creates a real conflict in our
pra note 13; underscores ours. this is the only time that the Court may exercise its discretion to have a wider scope of review of a Ru
this case, the wider scope of review is necessitated by the need to create a body of harmonious and w
d. jurisprudence.
acted on December 16, 1975. PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS ORGANIZATION
represented by its President, RENE SORIANO, Petitioner,
ued on December 22, 1975. vs.
PNCC SKYWAY CORPORATION, Respondent.
ction 3(e) of the Rules and Regulations Implementing P.D. No. 851 reads in full:
DECISION
SEC. 3. Employers covered.––The Decree shall apply to all employers except to:
PERALTA, J.:
xxxx
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to set aside the De
Resolution
e) Employers of those who are paid on purely commission, boundary,
2 of the Court of Appeals (CA) in CA-G.R. SP. No. 87069, which annulled and set aside the Decision and Or
or task basis, and those who are paid a fixed
amount for performing a specific work, irrespective of the time Arbitrator
consumed dated
in the July 12, 2004 and
performance August
thereof, 11, 2004, respectively.
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] The factual antecedents are as follows:

Petitioner PNCC Skyway Corporation Traffic Management and Security Division Workers' Organization (PSTMSDWO
Arellano Law Foundation duly registered with the Department of Labor and Employment (DOLE). Respondent PNCC Skyway Corporation is a c
organized and operating under and by virtue of the laws of the Philippines.

On November 15, 2002, petitioner and respondent entered into a Collective Bargaining Agreement (CBA) incorporatin
conditions of their agreement which included vacation leave and expenses for security license provisions.

The pertinent provisions of the CBA relative to vacation leave and sick leave are as follows:

1.4 PNCC SKYWAY TRAFFIC MANAGEMENT AND ARTICLE VIII

SECURITY DIVISION WORKERS ORGANIZATION VACATION LEAVE AND SICK LEAVE
(PSTMSDWOvs.PNCC SKYWAY CORPORATION
Section 1. Vacation Leave.
Site:
https://www.lawphil.net/judjuris/juri2010/feb2010/gr_171231_201 [a] Regular Employees covered by the bargaining unit who have completed at least one [1] yea
0.html service shall be entitled to vacation leave with pay depending on the length of service as follow
Law Phil
1-9 years of service - 15 working days
Republic of the Philippines
10-15 years of service - 16 working days
SUPREME COURT
Manila
16-20 years of service - 17 working days
THIRD DIVISION
21-25 years of service - 18 working days
February 17, 2010
 26 and above years of service - 19 working days. We are furnishing all the departments the leave balances of their respective staff as of January 01, 2004, so as to have th
program the schedule of such leave.
[b] The company shall schedule the vacation leave of employees during the year taking into consideration
the request of preference of the employees.(emphasis supplied) Please consider the leave credit they earned each month [1-2-0], one day and two hours in anticipation of the later sch
targeting the zero conversion comes December 2004, it is suggested that the leave balances as of to date be given prefe
[c] Any unused vacation leave shall be converted to cash and shall be paid to the employees on the first week of
December each year." x x x.

ARTICLE XXI Petitioner also demanded that the expenses for the required in-service training of its member security guards, as a requ
renewal of their license, be shouldered by the respondent. However, the respondent did not accede to petitioner's dem
cense – All covered employees must possess a valid License [Security onGuard
its decision
License]to schedule
issued by all
thethe vacation
Chief, leave of petitioner's members.
Philippine
duly authorized representative, to perform his duties as security guard. All expenses of security guard in
eir licenses shall be for their personal account. Guards, securing/renewing
Due totheir
the disagreement
license must apply
between
for athe
leave
parties,
of petitioner elevated the matter to the DOLE-NCMB for preventive medi
nge of schedule. Any guard who fails to renew his security guard license
settleshould
the issue
be placed
amicably,
on forced
the parties
leaveagreed
until such
to submit the issue before the voluntary arbitrator.
ent a renewed security license.
The voluntary arbitrator issued a Decision dated July 12, 2004, the dispositive portion of which reads:
ted December 29, 2003,3 respondent's Head of the Traffic Management and Security Department (TMSD) published
n leave of its TMSD personnel for the year 2004. Thereafter, the Head of the TMSD
WHEREFORE, issued aallMemorandum
premises 4 dated
considered, declaring that:
TMSD personnel. In the said memorandum, it was provided that:
a) The scheduling of all vacation leaves under Article VIII, Section 6, thereof, shall be under the discret
TION LEAVE WITH PAY. members entitled thereto, and the management to convert them into cash all the leaves which the ma
them to use.
SVL plus 2-day-off) scheduled vacation leave (SVL) with pay for the year 2004 had been published for everyone to take
hich will be our opportunity to enjoy quality time with our families and perform our b) other activities
To pay requiringforour
the expenses the in-service-training of the company security guards, as a requirement fo
d supervision. Swapping of SVL schedule is allowed on a one-on-one basis by submitting a written request at least
shall not be their personal 30 but that of the company.
account
l schedule of SVL duly signed by the concerned parties. However, the undersigned may consider the re-scheduling of
tten request of concerned TMSD personnel at least 30 days before All theother
scheduled
claimsSVL.
are Re-scheduling will be
dismissed for lack evaluated
of merit.
ion the TMSDs operational requirement.
SO ORDERED.6
o the implementation of the said memorandum. It insisted that the individual members of the union have the right to
n leave. It opined that the unilateral scheduling of the employees' vacation leave was done to avoid the monetization of
Respondent filed a motion for reconsideration, which the voluntary arbitrator denied in the Order7 dated August 11, 2
December 2004. This was allegedly apparent in the memorandum issued by the Head HRD,5addressed to all
hich provides:
Aggrieved, on October 22, 2004, respondent filed a Petition for Certiorari with Prayer for Temporary Restraining Ord
Preliminary Injunction with the CA, and the CA rendered a Decision dated October 4, 2005,8annulling and setting aside
s
order of the voluntary arbitrator. The CA ruled that since the provisions of the CBA were clear, the voluntary arbitrat
to interpret the same beyond what was expressly written.

Petitioner filed a motion for reconsideration, which the CA denied through a Resolution dated January 23, 2006.9Hence
nces as of January 01, 2004 assigning the following errors:

04 I
PECT, THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS
"employment
[THIRTEENTH
specialist" DIVISION]
who had not ERRED
even presented
IN any proof of her authority to represent the company; in Novelty
CA, we ruled that a personnel officer who signed the petition but did not attach the authority from the company is aut
verification and non-forum shopping certificate; and in Lepanto Consolidated Mining Company v. WMC Resources Inte
(Lepanto), THE
A) THE MANAGEMENT HAS THE SOLE DISCRETION TO SCHEDULE we ruled that the Chairperson
VACATION of the Board and President of the Company can sign the verification and cert
LEAVE OF HEREIN
PETITIONER. forum shopping even without the submission of the board’s authorization.

In sum, we have
B) THE MANAGEMENT IS NOT LIABLE FOR THE IN-SERVICE-TRAINING OFheld
THE that the following
SECURITY officials or employees of the company can sign the verification and certification
GUARDS.
board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Ma
II General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case.

PUBLIC RESPONDENT ERRED IN OVERSEEING THE CONVERSION While the above

ASPECT OF cases do not provide
THE UNUSED LEAVE.a complete listing of authorized signatories to the verification and certification re
the determination of the sufficiency of the authority was done on a case to case basis. The rationale applied in the foreg
justify the authority of corporate officers or representatives of the corporation to sign the verification or certificate aga
e merits of the petition, We shall first address the objection based on technicality raised by respondent.
being "in a position to verify the truthfulness and correctness of the allegations in the petition."
hat the petition was fatally defective due to the lack of authority of its union president, Rene Soriano, to sign the
In the case at bar, We rule that Rene Soriano has sufficient authority to sign the verification and certification against for
cation against forum shopping on petitioner's behalf. It alleged that the authority of Rene Soriano to represent the
following reasons: First, the resolution dated June 30, 2006 was merely a reiteration of the authority given to the Union
rred on June 30, 2006 by virtue of a board resolution,10 while the Petition for Review had long been filed on February
case before this Court assailing the CBA violations committed by the management, which was previously conferred dur
Soriano did not possess the required authority at the time the petition was filed on February 27, 2006.
October 5, 2005. Thus, it can be inferred that even prior to the filing of the petition before Us on February 27, 2006, th
union was duly authorized to represent the union and to file a case on its behalf. Second, being the president of the unio
ered that the Board Resolution11 dated June 30, 2006 merely reiterated the authority
a position to verifygiven to the unionand
the truthfulness president to of the allegations in the petition. Third, assuming that Mr. Soriano h
correctness
which was conferred as early as October 2005. The resolution provides in part that:
file the petition on February 27, 2006, the passing on June 30, 2006 of a Board Resolution authorizing him to represent
a ratification of his prior execution, on February 27, 2006, of the verification and certificate of non-forum shopping, thu
ng duly called for October 2005, the Union decided to file a Motion for Reconsideration
thereof. Ratificationand if the said
in agency motion
is the be or confirmation by one person of an act performed on his behalf by anoth
adoption
on before the Supreme Court. (Emphasis supplied) authority.14

dent, representing the union, was clothed with authority to file the petition
We nowon goFebruary 27, 2006.
to the merits of the case.

ring verification is to secure an assurance that the allegations in the Petitioner

petition have beenthat
insisted made in good
their unionfaith; or arehave
members truethe preference in scheduling their vacation leave. On the other hand,
ely speculative. This requirement is simply a condition affecting the form of pleadings, and non-compliance therewith
that Article VIII, Section 1 (b) gives the management the final say regarding the vacation leave schedule of its employees
render it fatally defective. Truly, verification is only a formal, not a jurisdictional, requirement.
take into consideration the employees' preferred schedule, but the same is not controlling.

ertification of non-forum shopping, it has been held that the certification requirement
Petitioner is rooted
also requested theinrespondent
the principleto that a and/or shoulder the expenses for the in-service training of their m
provide
be allowed to pursue simultaneous remedies in different fora, as this practice is detrimental to an orderly judicial
requirement for the renewal of the security guards' license. Respondent did not accede to the union's request invoking
this Court has relaxed, under justifiable circumstances, the rule requiring the submission
which states of such of
that all expenses certification
security guards in securing /renewing their license shall be for their personal account. T
ough it is obligatory, it is not jurisdictional. Not being jurisdictional, it can be relaxed under the
further argued that any doubts or rule of ambiguity
substantialin the interpretation of the CBA should be resolved in favor of the laborer

As to the issue on vacation leaves, the same has no merit.

Corporation v. Commissioner of Internal Revenue,13 We said that:
The rule is that where the language of a contract is plain and unambiguous, its meaning should be determined without r
wever, we have recognized the authority of some corporate officersfacts to sign the verification
or aids. andofcertification
The intention the parties against
must be gathered from that language, and from that language alone. Stated diff
actan-Cebu International Airport Authority v. CA, we recognized the authority of a general manager or acting general
erification and certificate against forum shopping; in Pfizer v. Galan, we upheld the validity of a verification signed by an
 contract is clear and unambiguous, the contract must be taken to mean
or actthat
of grace
which,ofonthe
itsemployer
face, it purports
and notto
a matter
mean, of right on the part of the employee.19 Thus, it is well within the powe
son can be assigned to show that the words used should be understood
employer
in a different
to impose sense.
certain
15 conditions, as it deems fit, on the grant of vacation leaves, such as having the option to sche

contested provision of the CBA is clear and unequivocal. Article VIII, Along
Section
that 1line,
(b)since
of thethe
CBAgrant
categorically
of vacationprovides
leave is a prerogative of the employer, the latter can compel its employees t
vacation leave shall be under the option of the employer. The preferencevacation requested
leave credits.
by the Ofemployees
course, anyis not
vacation leave credits left unscheduled by the employer, or any scheduled vacatio
espondent retains its power and prerogative to consider or to ignore enjoyed
said request.
by the employee upon the employer's directive, due to exigencies of the service, must be converted to cash, as
CBA. However, it is incorrect to award payment of the cash equivalent of vacation leaves that were already used and e
a CBA are clear and leave no doubt upon the intention of the contracting employees. By the
parties, directing
literal the conversion
meaning to cash of all utilized and paid vacation leaves, the voluntary arbitrator has licen
of its stipulation
the CBA must be strictly adhered to and respected if its ends have enrichment
to be achieved, in favor
beingofthe
thelaw
petitioner
betweenand thecaused undue financial burden on the respondent. Evidently, the Court canno
ciation of Mapua Institute of Technology (FAMIT) v. Court of Appeals,17 this Court held that the CBA during its lifetime
The provisions of the CBA must be respected since its terms and conditionsIt would seem
constitute
that petitioner's
the law between
goal inthe
relentlessly
parties. arguing that its members preferred vacation leave schedule should be
e allowed to change the terms they agreed upon on the ground thatnot the allowed
same aretonot them
favorable
to availto
themselves
them. of their respective vacation leave credits at all but, instead, to convert these in

the CA: In Cuajo v. Chua Lo Tan,20 We said that the purpose of a vacation leave is to afford a laborer a chance to get a much-nee
his worn-out energy and acquire a new vitality to enable him to efficiently perform his duties, and not merely to give hi
A were unequivocal when it provided that "The company shall scheduleand bounty.
the vacation leave of employees during the
deration the request of preference of the employees." The word shall in this instance connotes an imperative
g nothing to show a different intention. The only concession given under
This purpose
the subject
is manifest
clause was
in the
thatMemorandum
the companydated January 9, 200421 addressed to all TMSD Personnel which provides
ideration the preferences of the employees in scheduling the vacations; but certainly, the concession never diminished
management to schedule the vacation leaves in accordance with whatSCHEDULED
had been agreed and stipulated
VACATION LEAVE upon
WITHin the
PAYCBA.

is for the Voluntary Arbitrator to interpret the subject provision relating

The 17todays
the (15
schedule of vacation
days SVL leaves asscheduled
plus 2-Day-Off) being vacation leave (SVL) with pay for the year 2004 had been publishe
on of the union members. There is simply nothing in the CBA which grants the union members this right.
take a vacation with pay which will be our opportunity to enjoy quality time with our families and perform ou
requiring our personal attention and supervision.(Emphasis ours.)
grant to management of the right to schedule vacation leaves is not without good reason. Indeed, if union members
eral discretion to schedule their vacation leaves, the same may resultAccordingly,
in significantly
thecrippling
vacationthe number
leave of key
privilege was not intended to serve as additional salary, but as a non-monetary benefit. T
tioner manning the toll ways on holidays and other peak seasons, where unionthe
employees members
option may wittingly
not to consume or unwittingly
it with the aim of converting it to cash at the end of the year would defeat the v
ation. Put another way, the grant to management of the right to schedule vacation
vacation leave. leaves ensures that there would
ople manning and servicing the toll ways, which in turn assures the public plying the same orderly and efficient toll way
Petitioner's contention that labor contracts should be construed in favor of the laborer is without basis and, therefore,
present case. This rule of construction does not benefit petitioners because, as stated, there is here no room for interp
or scarcity of personnel manning the tollways should not rest uponCBAthe option
is clearofand
theunambiguous,
employees, asitsthe public
terms usingbe implemented as they are written.
should
ould be assured of its safety, security and convenience.
This brings Us to the issue of who is accountable for the in-service training of the security guards. On this point, We fin
ed vacation leave schedule of petitioner's members should be given priority, they cannot demand, as a matter of right,
meritorious.
automatically granted by the respondent. If the petitioners were given the exclusive right to schedule their vacation
hould have been incorporated in the CBA. In the absence of such right and initview
Although of the
is a rule mandatory
that a contractprovision in the into between the parties should be respected, since a contract is the
freely entered
nt the right to schedule the vacation leave of its employees, compliance therewith is mandated by law.
parties, there are, however, certain exceptions to the rule, specifically Article 1306 of the Civil Code, which provides:

on leave privileges to an employee, the employer is given the leewayThe to impose conditions
contracting partiesonmay
theestablish
entitlement
suchtostipulations,
and clauses, terms and conditions as they may deem convenient, pro
ame, as the grant of vacation leave is not a standard of law, but a prerogative of management. 18 It is a mere concession
contrary to law, morals, good customs, public order, or public policy.
 ns between capital and labor are not merely contractual. "They are WHEREFORE,
so impressed withthe petition
public interest
is PARTIALLY
that laborGRANTED. The Decision and Resolution of the Court of Appeals, dated Oc
o the common good x x x."22 The supremacy of the law over contracts January
is explained
23, 2006,by respectively,
the fact thatinlabor
CA-G.R.
contracts
SP. No. are87069 is MODIFIED. The cost of in-service training of the respond
s; they are imbued with public interest and therefore are subject tosecurity
the police
guards
powershallof be
theatstate.
the expense
23 However,
of the
it should
respondent company. This case is remanded to the voluntary arbitrator fo
that provisions agreed upon in the CBA are absolutely beyond the of ambit
the expenses
of judicial incurred
review andby nullification.
the security Ifguards
the for their in-service training, and respondent company is directed to reim
A run contrary to law, public morals, or public policy, such provisions
guards
may very
for the
wellexpenses
be voided.incurred.

SOguards
Article XXI, Section 6 of the CBA provides that "All expenses of security ORDERED.
in securing /renewing their licenses shall be
unt." A reading of the provision would reveal that it encompasses all possible expenses a security guard would pay or
re or renew his license. In-service training is a requirement for the DIOSDADO
renewal of a security guard’s license.24 Hence,
M. PERALTA
entioned CBA provision, the expenses for the same must be on the Associate
personal account
Justice of the employee. However, the
nd Regulations Implementing Republic Act No. 5487 provides the following:
WE CONCUR:
bility for Training and Progressive Development. It is the primary responsibility of all operators private security agency
forces to maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel. RENATO C. CORONA
ch duly licensed private security agency and company security force shall establish a staff position for training and Associate Justice
cer whose primary functions are to determine the training needs of the agency/guards in relation to the needs of the Chairperson
ry, and to supervise and conduct appropriate training requirements. All private security personnel shall be re-trained at
ears.
PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHU
1av v phi1

Associate Justice Associate Justice

training. - a. To maintain and/or upgrade the standard of efficiency, discipline and competence of security guards and
security force and private security agencies upon prior authority shall conduct-in-service training at least two (2) weeks
anic members by increments of at least two percent (2%) of their total strength. Where the quality of training is JOSE CATRAL MENDOZA
tralization, the CSFD Directors may activate a training staff from local talents to assist. The cost of training Associate Justice
mong the participating agencies/private companies. All security officer must undergo in-service training at least
ears preferably two months before his or her birth month. ATTESTATION

responsibility of operators of company security forces to maintain Iand attest that the
upgrade theconclusions
standards ofinefficiency,
the abovediscipline,
Decision had been reached in consultation before the case was assigned to the
mpetence of their personnel, it follows that the expenses to be incurred opinion of the
therein Court’s
shall be forDivision.
the personal account of the
e intent of the law to impose upon the employer the obligation to pay for the cost of its employees’ training is
ementioned law’s provision that Where the quality of training is betterRENATOserved by centralization,
C. CORONA the CFSD Directors may
from local talents to assist. The cost of training shall be pro-rated amongAssociate
the participating
Justiceagencies/private companies. It can be
provision that cost of training shall be pro-rated among participating agencies
Third and companies
Division, Chairpersonif the training is best
on. The law mandates pro-rating of expenses because it would be impracticable and unfair to impose the burden of
all participants on only one participating agency or company. Thus, it follows that if there is no centralization, there can CERTIFICATION
the company that has its own security forces shall shoulder the entire cost for such training. If the intent of the law
individual employees the cost of training, the provision on the pro-rating of expenses
Pursuant to Sectionwould not have
13, Article VIII found
of the print in
Constitution, it is hereby certified that the conclusions in the above Decision
consultation before the case was assigned to the writer of the opinion of the Court’s Division.

eged that prior to the inking of the CBA, it was the respondent company
REYNATOproviding for the in-service training of the
S. PUNO
never controverted the said allegation and is thus deemed to have admitted the
Chief Justice same. 26 Implicit from respondent's

nowledgment of its legally mandated responsibility to shoulder the expenses for in-service training.
 18 Sobrepeña, Jr. v. Court of Appeals, 345 Phil. 714, 728 (1997).

Virginia A. Sugue and the Heirs of Renato S. Valderrama v. Triumph International (Phils.), Inc., G.R. No. 164
19

2009; Triumph
nned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Rosmari D. Carandang International
and Monina (Phils.), Inc., v. Virginia A. Sugue and the Heirs of Renato S. Valderrama, G.R. No
Arevalo-
arosa, concurring; rollo, pp. 32-43. 2009, 577 SCRA 339.

at 45. 20 No. L-16298, September 29, 1962, 6 SCRA 136, 138.

cords, pp.4-9. 21 Supra note 1, at 76-77.

pra note 1, at 76-77. 22 Article 1700, New Civil Code.

pra note 3, at 3. 23 Villa v. National Labor Relations Commission, G.R. No. 117043, January 14, 1998, 284 SCRA 105, 127,12

pra note 1, at 113-118. 24Revised Rules and Regulations Implementing Republic Act No. 5487, Rule X, Section 12(b). The cert
training issued by company security force/private security agency shall be a pre-requisite for the renew
pra note 1, 120-124. exercise profession.

32-43.
25Petition for Review, supra note 1, at 21; Petitioner's Memorandum, id. at 220; Petitioner's Motion fo
with the CA, CA records, pp. 181.
45.
26Sec. 32, Rule 130 of the Rules of Court - Admission by silence. - An act or declaration made in the p
the hearing or observation of a party who does or says nothing when the act or declaration is such as
pra note 1, at 154-155.
action or comment if not true, and when proper and possible for him to do so, may be given in eviden
at 172-173.
The Lawphil Project - Arellano Law Foundation
ople of the Philippines v. Joven de Grano, Armando de Grano, Domingo Landicho and Estanislao Lacaba, G.R. No. 167710, June
09.

R. No. 151413, February 13, 2008, 545 SCRA 10, 17-19.

pinas Life Assurance Company v. Pedroso, G.R. No. 159489, February 4, 2008, 543 SCRA 542, 547.

utista v. Court of Appeals, 379 Phil. 386, 399 (2000), citing 17A Am. Jur. 2D 348-349. 1.5 AUTO BUS TRANSPORT SYSTEMS, INC., vs.
ANTONIO BAUTISTA GR # 156367
M Corporation-Flour Division and SFI Feeds Division v. Kasapian ng Manggagawang Pinagkaisa-RFM (KAMPI-NAFLU-KMU) and
igan at Ugnayan ng Manggagawang Pinagkaisa-SFI (SUMAPI-NAFLU-KMU) G.R. No. 162324, February 4, 2009, Site :578 SCRA
https://www.lawphil.net/judjuris/juri2005/may2005/gr_156367_20
05.html
R. No. 164060, June 15, 2007, 524 SCRA 709, 716. Law Phil
 Thus, on 02 February 2000, respondent instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment
and service incentive leave pay against Autobus.

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

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

SECOND DIVISION On 29 September 2000, based on the pleadings and supporting evidence presented by the parties, Labor Arbiter Monro
promulgated a Decision,4 the dispositive portion of which reads:
May 16, 2005
WHEREFORE, all premises considered, it is hereby found that the complaint for Illegal Dismissal has n
SPORT SYSTEMS, INC., petitioner, is hereby ordered DISMISSED, as it is hereby DISMISSED.

STA, respondent. However, still based on the above-discussed premises, the respondent must pay to the complainant th

DECISION a. his 13th month pay from the date of his hiring to the date of his dismissal, presently compute

O, J.: b. his service incentive leave pay for all the years he had been in service with the respondent,
at P13,788.05.
n for Review on Certiorari assailing the Decision and Resolution of the Court of Appeals affirming the Decision3 of the
1 2

ons Commission (NLRC). The NLRC ruling modified the Decision of the Labor Arbiter All other claims
(finding of both entitled
respondent complainant
to and respondent are hereby dismissed for lack of merit.5
nth pay and service incentive leave pay) by deleting the award of 13 month pay to respondent.
th

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

[T]he Rules
espondent Antonio Bautista has been employed by petitioner Auto Bus Transport Systems, and Regulations
Inc. (Autobus), Implementing Presidential Decree No. 851, particularly Sec. 3 provides:
as driver-
routes Manila-Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and Manila-Tabuk via Baguio. Respondent was
asis, seven percent (7%) of the total gross income per travel, on a twice a month basis. "Section 3. Employers covered. – The Decree shall apply to all employers except to:

while respondent was driving Autobus No. 114 along Sta. Fe, Nueva Vizcaya, the bus he was driving accidentally xxx xxx xxx
tion of Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without giving any warning.
e) employers of those who are paid on purely commission, boundary, or task basis, performin
hat the accident happened because he was compelled by the management to go back to Roxas, Isabela, although
irrespective he consumed in the performance thereof. xxx."
of the time
ost twenty-four (24) hours, as he had just arrived in Manila from Roxas, Isabela. Respondent further alleged that he was
until he fully paid the amount of P75,551.50, representing thirty percent (30%) of theRecords
cost of repair of the
show that damaged in his position paper, admitted that he was paid on a commission basi
complainant,
e respondent’s pleas for reconsideration, the same was ignored by management. After a month, management sent him
n.
ew of the foregoing, we deem it just and equitable to modify the assailed Decision by deleting… the award of 13th month
o the complainant.
(d) Field personnel and other employees whose performance is unsupervised by the employer
are engaged on task or contract basis, purely commission basis, or those who are paid in a fix
performing work irrespective of the time consumed in the performance thereof; . . .
EREFORE, the Decision dated 29 September 2000 is MODIFIED by deleting the award of 13th month pay. The other
ngs are AFFIRMED.6 A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been
Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Sec
According
ward of service incentive leave pay was maintained. Petitioner thus sought to the Implementing
a reconsideration of this Rules,
aspect,Service
which Incentive
was Leave shall not apply to employees classified as "field personnel
n a Resolution by the NLRC dated 31 October 2001. employees whose performance is unsupervised by the employer" must not be understood as a separate classification of
service incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of
underofthe
the partial grant of its appeal to the NLRC, petitioner sought the review Labor
said Codewith
decision as those "whose
the Court actual hours of work in the field cannot be determined with reasonable certain
of Appeals
tly denied by the appellate court in a Decision dated 06 May 2002, the dispositive portion of which reads:
The same is true with respect to the phrase "those who are engaged on task or contract basis, purely commission basis." Said
EREFORE, premises considered, the Petition is DISMISSED for lack of related
merit;with
and "field personnel,"
the assailed applying
Decision the rule on ejusdem generis that general and unlimited terms are restrained and l
of respondent
particular
mission in NLRC NCR CA No. 026584-2000 is hereby AFFIRMED in toto. No costs. terms that
7 they follow. 9 Hence, employees engaged on task or contract basis or paid on purely commission b

automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field person
tition.
Therefore, petitioner’s contention that respondent is not entitled to the grant of service incentive leave just because he
commission basis is misplaced. What must be ascertained in order to resolve the issue of propriety of the grant of serv
ISSUES
respondent is whether or not he is a field personnel.
spondent is entitled to service incentive leave;
According to Article 82 of the Labor Code, "field personnel" shall refer to non-agricultural employees who regularly pe
away from the principal place of business or branch office of the employer and whose actual hours of work in the field
e three (3)-year prescriptive period provided under Article 291 of the Labor Code,
determined with as amended,certainty.
reasonable is applicable
Thistodefinition is further elaborated in the Bureau of Working Conditions (BWC), Ad
service incentive leave pay. Philippine Technical-Clerical Commercial Employees Association10 which states that:

RULING OF THE COURT As a general rule, [field personnel] are those whose performance of their job/service is not supervised
his representative, the workplace being away from the principal office and whose hours and days of wo
e first issue revolves around the proper interpretation of Article 95 of the Labor Code vis-à-visSection
determined 1(D), Rule V,
with reasonable certainty; hence, they are paid specific amount for rendering specific servi
menting Rules and Regulations of the Labor Code which provides: specific work. If required to be at specific places at specific times, employees including drivers cannot be said
despite the fact that they are performing work away from the principal office of the employee. [Emphasis our
95. RIGHT TO SERVICE INCENTIVE LEAVE
To this discussion by the BWC, the petitioner differs and postulates that under said advisory opinion, no employee wo
(a) Every employee who has rendered at least one year of service shall be entitled
considered to a yearlybecause
a field personnel serviceevery
incentive
employer, in one way or another, exercises control over his employees. Pet
leave of five days with pay. argues that the only criterion that should be considered is the nature of work of the employee in that, if the employee’
works away from the principal office like that of a messenger or a bus driver, then he is inevitably a field personnel.
k III, Rule V: SERVICE INCENTIVE LEAVE
We are not persuaded. At this point, it is necessary to stress that the definition of a "field personnel" is not merely con
TION 1. Coverage. – This rule shall apply to all employees except: location where the employee regularly performs his duties but also with the fact that the employee’s performance is un
employer. As discussed above, field personnel are those who regularly perform their duties away from the principal pla
employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Thus, in order to concl
employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be determined with
o doing, an inquiry must be made as to whether or not the employee’s
prescriptive
time and period
performance
is therefore
are constantly
barred bysupervised
prescription. The amount that can only be demanded by the aggrieved emplo
to the amount of the benefits withheld within three (3) years before the filing of the complaint.14

abor Arbiter and concurred in by the Court of Appeals: It is essential at this point, however, to recognize that the service incentive leave is a curious animal in relation to other
the law to every employee. In the case of service incentive leave, the employee may choose to either use his leave cred
its monetary
of judicial notice that along the routes that are plied by these bus companies, equivalent
there if not exhausted
are its inspectors assigned atat
the end of the year.15 Furthermore, if the employee entitled to service incen
egic places who board the bus and inspect the passengers, the punched use or commute
tickets, theconductor’s
and the same, he is entitled
reports.uponTherehisis resignation or separation from work to the commutation of his accru
the mandatory once-a-week car barn or shop day, where the bus isleave. As enunciated
regularly checked asby to the Court in Fernandez
its mechanical, v. NLRC:16
electrical,
hydraulic aspects, whether or not there are problems thereon as reported by the driver and/or conductor. They too,
be at specific place as [sic] specified time, as they generally observe prompt departure Theandcleararrival
policyfrom
of thetheir
Labor
pointCode
of is to grant service incentive leave pay to workers in all establishme
n to their point of destination. In each and every depot, there is always the Dispatcher exceptions.
whose functionSectionis2,precisely
Rule V, Book
to III of the Implementing Rules and Regulations provides that "[e]ver
o it that the bus and its crew leave the premises at specific times and arrive at the estimated
renderedproper at leasttime.
one year
These,of are
service shall be entitled to a yearly service incentive leave of five days wi
ent in the case at bar. The driver, the complainant herein, was therefore under constant incentive
supervision
leave iswhile
a rightin which
the accrues to every employee who has served "within 12 months, whethe
ormance of this work. He cannot be considered a field personnel.11 broken reckoned from the date the employee started working, including authorized absences and paid
unless the working days in the establishment as a matter of practice or policy, or that provided in the
e disquisition. Therefore, as correctly concluded by the appellate court, respondent contracts,
is not a field is less than 12but
personnel months,
a in which case said period shall be considered as one year." It is also "
o performs tasks usually necessary and desirable to the usual trade of petitioner’s business.money equivalent
Accordingly, if not used or exhausted
respondent is at the end of the year." In other words, an employee who has serve
of service incentive leave. entitled to it. He may use it as leave days or he may collect its monetary value. To limit the award to three y
general recommends, is to unduly restrict such right.17 [Italics supplied]
at must be addressed is up to what amount of service incentive leave pay respondent is entitled to.
Correspondingly, it can be conscientiously deduced that the cause of action of an entitled employee to claim his service
query inevitably leads us to the correlative issue of whether or not accrues
the threefrom the moment
(3)-year prescriptivethe employer
period under refuses to remunerate its monetary equivalent if the employee did not make u
Article
e is applicable to respondent’s claim of service incentive leave pay. credits but instead chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credi
commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of hi
service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separatio
bor Code states that all money claims arising from employer-employee relationship shall be filed within three (3) years
se of action accrued; otherwise, they shall be forever barred.
Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that th
prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation o
his section of the Labor Code, the pivotal question to be answered is when does the cause of action for money claims
incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commuta
termine the reckoning date of the three-year prescriptive period.
termination of the employee’s services, as the case may be.
nce that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and under
or is created; (2) an obligation on the part of the named defendantThe above construal
to respect or not toof violate suchvis-à-vis
Art. 291, the (3)
right; and rules
an on service incentive leave, is in keeping with the rudimentary princip
implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingm
e part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant
be the primordial and paramount consideration.18 The policy is to extend the applicability of the decree to a greater nu
who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximu
to labor.19
Article 291 of the Labor Code, it is essential to ascertain the time when the third element of a cause of action
erently, in the computation of the three-year prescriptive period, a determination must be made as to the period when
In the case
violation of the workers’ right to the benefits being claimed was committed. at ifbar,
For therespondent had not
cause of action mademore
accrued use of his service incentive leave nor demanded for its commutation until
terminated by petitioner. Neither did petitioner compensate his accumulated service incentive leave pay at the time of
efore the filing of the money claim, said cause of action has already prescribed in accordance with Article 291.13
only upon his filing of a complaint for illegal dismissal, one month from the time of his dismissal, that respondent deman
employer commutation of his accumulated leave credits. His cause of action to claim the payment of his accumulated se
s of nonpayment of allowances and other monetary benefits, if it is thusestablished
accruedthat
from thethe
benefits being his
time when claimed have dismissed him and failed to pay his accumulated leave credits.
employer
he employee for a period longer than three (3) years, the amount pertaining to the period beyond the three-year
iptive period with respect to his claim for service incentive leave pay only commenced 12 Baliwag
from the Transit,
time the
Inc.employer
v. Ople, G.R. No. 57642, 16 March 1989, 171 SCRA 250, citing Agric. Credit &
his accumulated service incentive leave pay at the time of his dismissal. Since respondent
Financing
had filed
Administration
his money claim
v. Alpha
afterIns. & Surety Co., Inc., G.R. No. L-24566, 29 July 1968, 24 SCRA 15
the time of his dismissal, necessarily, his money claim was filed within the prescriptive
andperiod
Insurance
provided
Co., for
Inc. by
v. De
Article
Guzman, G.R. No. L-50997, 30 June 1987, 151 SCRA 389; Tormon v. Cu
e. 18785, 23 December 1963, 9 SCRA 698.

mises considered, the instant petition is hereby DENIED. The assailed Decision of the
13 See
Court
DeofGuzman,
Appeals et
in al.
CA-G.R.
v. CA and
SP. Nasipit Lumber Co., G.R. No.132257, 12 October 1998, 297 SCRA
AFFIRMED. No Costs.
14 See E. Ganzon, Inc. v. NLRC, G.R. No. 123769, 22 December 1999, 321 SCRA 434.

15 Fernandez v. NLRC, G.R. No. 105892, 28 January 1998, 349 Phil 65.
ria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
16 Ibid.

17 Ibid., pp. 94-95.

18 Abella v. NLRC, G.R. No. L-71813, 20 July 1987, 152 SCRA 140, citing Volkschel Labor Union v. Bur

-G.R. SP No. 68395, dated 06 May 2002, penned by Associate Justice Andres B. Reyes,
Relations,
Jr. withG.R.
Associate
No. L-45824,
Justices 19 June 1985, 137 SCRA 43.
rado M. Vasquez, Jr. and Mario L. Guariña, III, concurring.
19 Sarmiento v. Employees’ Compensation Commission, G.R. No. L-68648, 24 September 1986, 144 SC

ted 12 December 2002. 421, citing Cristobal v. Employees’ Compensation Commission, G.R. No. L-49280, 26 February 1981, 1
Acosta v. Employees’ Compensation Commission, G.R. No. L-55464, 12 November 1981, 109 SCRA 2
RC NCR CA No. 026584-2000 (NLRC Case No. RAB CAR 02-0088-00), dated 28 September 2001.

RC Case No. RAB-CAR-02-0088-00. The Lawphil Project - Arellano Law Foundation

lo, pp. 46-47.

lo, pp. 52-53.

Decision, p. 10; Rollo, p. 24.

Mercidar Fishing Corporation v. NLRC, G.R. No. 112574, 08 October 1998, 297 SCRA440.

bu Institute of Technology v. Ople, G.R. No. L-58870, 18 December 1987, 156 SCRA 629, 672, citingVera v. Cuevas,
No. L-33693, 31 May 1979, 90 SCRA 379.

April 1989; Rollo. p. 20. 1.6OUR HAUS REALTY DEVELOPMENT

CORPORATION vs. ALEXANDER PARIAN et al. G.R. #
ollo, pp. 45-46.
204651
 Site:https://lawphil.net/judjuris/juri2014/aug2014/gr_204651_2 January 2008- Quezon City 2009- Antipolo 2010-
Jay C. Erinco 10 years ₱342.
014.html 2000 Quezon City
Law Phil Alexander R.
2005 5 years 2007-2010- Quezon City ₱312.
Canlas
2008- Quezon City 2009- Antipolo 2010-
Jerry Q. Sabulao August 1999 10 years ₱342.
Republic of the Philippines Quezon City
SUPREME COURT
Bernardo N.
Manila 1994 16 years 2007-2010- Quezon City ₱383.
Tenedero
SECOND DIVISION
Sometime in May 2010, Our Haus experienced financial distress. To alleviate its condition, Our Haus suspended some o
August 6, 2014 projects and asked the affected workers, including the respondents, to take vacation leaves.8

TY DEVELOPMENT CORPORATION, Petitioner, Eventually, the respondents were asked to report back to work but instead of doing so, they filed with the LA a compla
underpayment of their daily wages. They claimed that except for respondent Bernardo N. Tenedero, their wages were
RIAN, JAY C. ERINCO, ALEXANDER CANLAS, BERNARDrates prescribed and
TENEDERO in theJERRY
following wage orders from 2007 to 2010:
dents.
1. Wage Order No. NCR-13, which provides for a daily minimum wage rate of ₱362.00for the non-ag
DECISION (effective from August 28, 2007 until June 13, 2008); and

2. Wage Order No. NCR-14, which provides for a daily minimum wage rate of ₱382.00for the non-ag
(effective from June 14, 2008 until June 30, 2010).
tition for review on certiorari1 the challenge to the May 7, 2012 decision2 and the November 27, 2012
CA rulings) of the Court of Appeals (CA) in CA-G.R. SP No. 123273.The respondents
These alsorulings
assailed CA allegedaffirmed
thatOurthe
Haus
Julyfailed
20, to pay them their holiday, service incentive leave (SIL), 13th month a
e December 2, 2011 resolution (NLRC rulings) of the National Labor Relations Commission (NLRC) in NLRC LAC
5

LRC NCR Case No. 06-08544-10). The NLRC rulings in turn reversed and set aside the December 10, 2010 The Labor Arbitration Rulings
arbiter (LA).
Before the LA, Our Haus primarily argued that the respondents’ wages complied with the law’s minimum requirement.
Factual Antecedents the monetary amount of the respondents’ wages, Our Haus also subsidized their meals (3 times a day), and gave them f
construction project they were assigned to.10 In determining the total amount of the respondents’ daily wages, the value
er Parian, Jay Erinco, Alexander Canlas, Jerry Sabulao and Bernardoshould be considered,
Tenederowere in lineworking
all laborers with Article 97(f)11 of the Labor Code.
for petitioner
elopment Corporation (Our Haus), a company engaged in the construction business.The respondents’ respective
and daily wage rates from 2007 to 2010 are summarized in the tableOur Haus also rejected the respondents’ other monetary claims for lack of proof that they were entitled to it.12
7 below:

On the other hand, the respondents argued that the value of their meals should not be considered in determining their
Years of Daily
Name Date Hired Year and Placesince
of Assignment
the requirements set under Section 413 of DOLE14 Memorandum Circular No. 215were not complied with.
Service Rate
Alexander M. October
10 years 2007-2010-The respondents
Quezon City pointed₱353.50
out that Our Haus never presented any proof that they agreed in writing to the inclusion of t
Parian 1999 their wages.16 Also, Our Haus failed to prove that the value of the facilities it furnished was fair and reasonable.17 Finally,
t of 70% of the value of the meals, Our Haus actually withheld its fullOur
value
Haus
(which
filedwas
a motion
Php290.00
for reconsideration
per week for each
but the CA denied its motion, prompting it to file the present petition for
under Rule 45.

of Our Haus. He held that if the reasonable values of the board and lodging would be taken into account, the The Petition
ges would meet the minimum wage rate.19 As to the other benefits, the LA found that the respondents were not able
claims for it.20 Our Haus submits that the CA erred in ruling that the legal requirements apply without distinction ―whether the facili
deducted or merely included in the computation of the wages. At any rate, it complied with the requirements for deduc
ealed the LA’s decision to the NLRC, which in turn, reversed it. Citing of the
thefacilities.
case of Mayon
First, the
Hotel
five &kasunduans
Restaurantexecuted
v. by the respondents constitute the written authorization for the inclu
oted that the respondents did not authorize Our Haus in writing to and charge
lodging’s
the values
valuesofto
their
theirboard
wages.
andSecond,
lodgingOur to Haus only withheld the amount of ₱290.00 which represents the food
e samecannot be credited. weekly cooking cost (cook’s wage, LPG, water) at ₱239.40 per person is a separate expense that Our Haus did not wit
respondents’ wages.30 This disproves the respondents’claim that it deducted the full amount of the meals’ value.
that the respondents are entitled to their respective proportionate 13th month payments for the year 2010 and SIL
three years,immediately preceding May 31, 2010, the date when theLastly, respondents
the CA leftOur
erred inHaus.
rulingHowever, the NLRC
that the claim for SIL pay may still be granted though not raised in the complaint; and that
ing that the respondents were not entitled to overtime pay since the exact to
entitled dates and times
an award when theyfees.
of attorney’s rendered
31

ot been proven.22
The Case for the Respondents
the reconsideration23 of the NLRC’s decision and submitted new evidence (the five kasunduans) to show that the
ed Our Haus in writing to charge the values of their meals and lodging Thetorespondents
their wages.prayed for the denial of the petition.32 They maintained that the CA did not err inruling that the values
lodging cannot be deducted from their wages for failure to comply with the requirements set by law.33 And though the c
ur Haus’ motion, thus it filed a Rule 65 petition24 with the CA. In its not
petition,
includedOurinHaus
theirpropounded a new theory.
pro forma complaint, they Itraised their claims in their position paper and Our Haus had the opport
tween deduction and charging. A written authorization is only necessary in its ifpleadings.
the facility’s
34 value will be deducted and will
l merely be charged or included in the computation of wages.25 Our Haus claimed that it did not actually deduct the
d housing benefits. It only considered these in computing the total amount of wages
Finally, under the paid
PAOtolaw,
thetherespondents forthe PAO’s legal services does not exempt its clients from an award of atto
availment of
ce with the minimum wage law. Hence, the written authorization requirement should not apply.
The Court’s Ruling
ed that the respondents’ claim for SIL pay should be denied as this was not included in their pro formacomplaint.
he respondents’entitlement to attorney’s fees because they were not Werepresented by a privatepetition.
resolve to DENYthe lawyer but by the Public
O).
The nature of a Rule 45 petition ― only questions of law
The CA’s Ruling
Basic is the rule that only questions of lawmay be raised in a Rule 45 petition.36 However, in this case, weare confronted
ur Haus’ certiorari petition and affirmed the NLRC rulings in toto. Itquestions
found noof real
factdistinction between
and law that deductionunder
are subsumed and the issue of whether Our Haus complied with the legal requirement
hat the legal requirements before any deduction or charging can be of made, apply to both. Our Haus, however, failed to be considered under Rule 45 except in the course of resolving if t
the value of facilities. Strictly, factual issues cannot
d with any of the requirements laid down in Mabeza v. National Labor Relations Commission. 27 Accordingly, it cannot
determined whether or not the NLRC committed grave abuse of discretion in considering and appreciating the factual
f its meal and housing facilities in the computation of the respondents’ total wages.
In ruling for legal correctness, we have to view the CA decision in the same context that the petition for certiorariit ru
at since the respondents were able to allege non-payment of SIL in presented
their position
to it;paper, and to
we have Our Haus, in
examine thefact,
CA decision from the prism of whether it correctly determined the presence o
us pleadings,28 then the NLRC properly considered it as part of the abuse
respondents’ causes of action. Lastly,
of discretion in the NLRC decision the CA
before it, not on the basis of whether the NLRC decision, on the merits of th
ent’s entitlement to attorney’s fees.29 In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the N
challenged before it. This is the approach that should bebasic in a Rule 45 review of a CA ruling in a labor case. In quest
 present case is: did the CA correctly determine that the NLRC didlodging,
not commit
electricity
graveand
abuse
water
of discretion
provisionsintoruling
its employees,
on then Our Haus should not deduct its values from the respond
at the CA correctly did. Otherwise, this will run contrary to the affiants’ claim that these benefits were traditionally given free of charge.

tion between deducting and charging a facility’s value from the employee’s
Apart from
wage;company
the legalpolicy,
requirements
the employer
for creditability
may also prove compliance with the first requirement by showing the existen
wide practice of furnishingthe benefits in question among enterprises engaged in the same line of business. If it were cus
construction companies to provide board and lodging to their workers and treat their values as part of their wages, we
mpliance with the requirements for the deductibility of a facility, Ourreason to conclude
Haus asks that these
us to believe benefits
that there is a were really facilities.
substantial
he deduction and the charging of a facility’s value to the wages. Our Haus explains that in deduction, the amount of the
ady be below the minimum) would still be lessened by the facility’s value,
However,thus Our
needing
Hausthe
could
employee’s
not really
consent.
be expected
On theto prove compliance with the first requirement since the living accom
g, there is no reduction of the employee’s wage since the facility’s value
workers
will in
just
the
beconstruction
theoreticallyindustry
added tois the
notwage
simplyfora matter of business practice. Peculiar to the construction business a
g with the minimum wage requirement.39 safety and health (OSH) services which the law itself mandates employers to provide to their workers. This isto ensure
conditions of construction employees despite their constant exposure to hazardous working environments. Under Sect
s a vain attempt to circumvent the minimum wage law by trying to Department Order where
create a distinction (DO) No.
none 13,exists.
series of 1998,43 employers engaged in the construction business are required to prov
welfare amenities:
nd charging both operate to lessen the actual take-home pay of an employee; they are two sides of the same coin. In
eceives a lessened amount because supposedly, the facility’s value, which is part of his16.1 Adequate
wage, supply
had already of safe
been paiddrinking
to water
is no substantial distinction between the two, the requirements set by law must apply to both.
16.2 Adequate sanitaryand washing facilities
ruled, these requirements, as summarized in Mabeza, are the following:
16.3 Suitable living accommodation for workers, and as may be applicable, for their families
oof must be shown thatsuch facilities are customarily furnished by the trade;
16.4 Separate sanitary, washing and sleeping facilitiesfor men and women workers. [emphasis ours]
e provision of deductiblefacilities must be voluntarily accepted in writingby the employee; and
Moreover, DOLE DO No. 56, series of 2005, which sets out the guidelines for the implementation ofDOLE DO No. 1
he facilities must be charged at fair and reasonable value. 40 cost of the implementation of the requirements for the construction safety and health of workers, shall be integrated to
cost.44 The rationale behind this isto ensure that the living accommodation of the workers is not substandard and is stri
us’ compliance with each of these requirements in seriatim. the DOLE’s OSH criteria.

customarily furnished by the trade As part of the project cost that construction companies already charge to their clients, the value of the housing of their
charged again to their employees’ salaries. Our Haus cannot pass the burden of the OSH costs of its construction proje
by deducting
e have concluded that one of the badges to show that a facility is customarily it as facilities.
furnished This isisOur
by the trade Haus’ obligation
the existence of under the law.
guideline showing that provisions for a facility were designated as part of the employees’ salaries.41 To comply with this,
n its motion for reconsideration with the NLRC the joint sinumpaang Lastly, even if four
salaysayof a benefit
of itsisalleged
customarily provided
employees. by the trade, it must still pass the purpose testset by jurisprudence. Und
These
benefit or privilege granted to the
at they were recipients of free lodging, electricity and water, as well as subsidized meals from Our Haus.42 employee is clearly for the employer’s convenience, it will not be considered as a fac
supplement. Here, careful consideration is given to the nature of the employer’s business in relation to the work perfo
45

employee. This test is used to address inequitable situations wherein employers consider a benefit deductible from the
LRC’s finding that the sinumpaang salaysay statements submitted by Our Haus are self-serving. For one, Our Haus
factual circumstances show that it clearly redounds to the employers’ greater advantage.
1âwphi1

cuments when the NLRC had already earlier determined that Our Haus failed to prove that it was traditionally giving
board and lodging. This document did not state whether these benefits had been consistently enjoyed by the rest of
. Moreover, the records reveal that the board and lodging were given While
on athe
perrules serve
project as the
basis. Ourinitial
Haustest
didinnot
characterizing
show if a benefit as a facility, the purpose test additionally recognizes th
the employee do not stand at the
so provided inits other construction projects, thus negating its claimed customary nature. Even assuming the same bargaining positions on benefits that must or must not formpart of an employee
ultimate analysis, the purpose test seeks
o be true, this document would still work against Our Haus’ case. If Our Haus really had the practice of freely giving to prevent a circumvention of the minimum wage law.
in jurisprudence Unlike in office enterprises where the work is focused on desk jobs, the construction industry relies heavily and directly
capacity and endurance of its workers. This is not to say that desk jobs do not require muscle strength; wesimply emph
the value of the facilities may be deducted from the employees’ wagesconstruction
but not thebusiness,
value ofbulk of the work
supplements. performed are strenuous physical activities.
Facilities
vices for the benefit of the employee or his family but exclude tools of the trade or articles or services primarily for
ployer or necessary to the conduct of the employer’s business.47 Moreover, in the construction business, contractors are usually faced with the problem ofmeeting target deadlines. Mo
work is performed continuously, day and night, in order to finish the project on the designated turn-over date. Thus, it
convenient to allowances
es that the computation of wages shall exclude whatever benefits, supplementsor the employer if itsworkers
given are housed near the construction site to ensure their ready availability during
to employees.
emergency
to employees on top of their basic pay and are free of charge.48 Since circumstances.
it does not form part of Also, productivity
the wage, issues like tardiness and unexpected absences would be minimized. This o
a supplement’s
udedin the determination of whether an employer complied with the bears in the present
prescribed minimum case since
wage three of the respondents are not residents of the National Capital Region. The board an
rates.
might have been a substantial consideration in their acceptance of employment in a place distant from their provincial r
he board and lodging provided by Our Haus cannot be categorized asfacilities but as supplements. In SLL International
ational Labor Relations Commission,49 this Court was confronted with Basedtheon these
issue on considerations, we conclude of
the proper characterization that
theeven under the purpose test, the subsidized meals and free lodging pr
g provided by the employer. We explained: are actually supplements. Although they also work to benefit the respondents, an analysis of the nature of these benefit
Haus’ business shows that they were given primarily for Our Haus’ greater convenience and advantage. If weighed on a
tilts
nt, makes a distinction between "facilities" and "supplements". It is of themore
viewtowards
that theOur
foodHaus’ side. Accordingly,
and lodging, or the their values cannot be considered in computing the total amount of th
wages.but
allegedly consumed by private respondents in this case were not facilities Under the circumstances,
supplements. In the casethe
of dailywages
Atok-Big paid to the respondents are clearly below the prescribed minimum wa
-Big Wedge Co., the two terms were distinguished from one another 2007-2010.
in this wise:

ore, constitute extra remuneration or special privileges or benefits b. Thetoprovision

given of deductible
or received facilities
by the laborers must be
overand voluntarily accepted in writing by the employee
above
gs or wages. "Facilities", on the other hand, are items of expense necessary for the laborer's and his family's existence
atby express provision of law (Sec. 2[g]), they form part of the wageInand
Mayon
whenHotel, we reiterated
furnished that a facility
by the employer are may only be deducted from the wage if the employer was authorized in wr
since if they are not so furnished, the laborer would spend and payconcerned employee.
for them just 51 As it diminishes the take-home pay of an employee, the deduction must be with his express con
the same.

Again, inabove
or privilege given to the employee which constitutes an extra remuneration the motion for his
and over reconsideration with the NLRC, Our Haus belatedly submitted five kasunduans, supposedly ex
basic or ordinary
pplement; and when said benefit or privilege is part of the laborers' basic wages, it is a facility. The distinction to
respondents, containing their conformity liesthe
notinclusion of the values of the meals and housing to their total wages. O
offered these documents when the NLRC had
f benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given.In the case at bench,already ruled that respondents did not accomplish any written authoriza
ere given freely by SLLfor the purpose of maintaining the efficiency and health of its workers while they were working were also undated, making us wonder if they had reallybeen execut
deduction from their wages. These five kasunduans
jects.50 first assumed their jobs.

fference lies not on the kind of the benefit but on the purpose why Moreover,
it was giveninbythetheearlier sinumpaang
employer. salaysay by
If it is primarily forOur Haus’ four employees, it was not mentioned that they also execut
their
hen the benefit is a facility; if its provision is mainly for the employer’s board and
advantage, lodging
then it is abenefits. Because
supplement. of these
Again, this issurrounding circumstances and the suspicious timing when the five ka
yees are protected in circumstances where the employer designatessubmitted as deductible
a benefit as evidence, we fromagree
the withthe CA that the NLRC committed no grave abuse of discretion in disregarding the
wages even
ks to the employer’s greater convenience or advantage. being self serving.

c. The facility
st, substantial consideration must be given to the nature of the employer’s must
business be charged
inrelation to theat acharacter
fair and reasonable
or type value
y the employees involved.
Our Haus admitted that it deducted the amount of ₱290.00 per week from each of the respondents for their meals. Bu
in the construction business, a laborintensive enterprise. The success it did notprojects
of its actuallyiswithhold
largely a the entireofamount
function as it did not figure in the computation the money it expended for the sala
the physical
efficiency of its laborers. Its business will be jeopardized if its workers are weak, sickly, and lack the required energy to to ₱249.40 per week per person. From these, it appears that the
water, and the LPG used for cooking, which amounts
hysical activities. Thus, by ensuring that the workers are adequately perand week for the
well fed, person isis₱529.40,making
eachemployer on Haus’ ₱290.00 deduction within the 70% ceiling prescribed by the ru
actually investingOur
 valuation cannotbe plucked out of thin air. The valuation of a facilitysubscribed
must besupported
under oath.
by relevant
Our Haus documents
could havesuch
at least
as submitted its payroll or copies of the pay slips of respondents to s
y records for it to be considered as fair and reasonable. In Mabeza, we these
noted:
benefits. However, it failed to do so.

at bench, the only valuations relied upon by the labor arbiter in hisRespondents
decision wereare figures
entitled
furnished
to attorney’s
by the fees.
private
ountant, without corroborative evidence.On the pretext that records prior to the July 16, 1990 earthquake were lost
dent failed to produce payroll records, receipts and other relevant documents, wherethat
Finally, we affirm he respondents
could have, asare hasentitled
been to attorney’s fees. Our Haus’ asserts that respondents’ availment of free
citor General's manifestation, "secured certified copies thereof fromthe thePAO
nearest regionalthem
disqualifies officefrom
of the
suchDepartment
award. Weoffind this untenable.
BIR".52 [emphasis ours]
It is settled that in actions for recovery of wages or where an employee was forced to litigate and, thus, incur expenses
Our Haus never explained how it came up with the valuesit assignedand for interest,
the benefits
the itaward
provided; it merelyfees
of attorney's listed its
is legally and morally justifiable.56 Moreover, under the PAO Law or Republic A
ithout any supporting document. Since Our Haus is using these additional expenses (cook’s salary, water and LPG) to
costs of the suit, attorney's fees and contingent fees imposed upon the adversary of the PAO clients after a successful l
it did not withhold the full amount of the meals’ value, Our Haus isdeposited
burdened in tothe
present evidence
National Treasury to corroborate
as trust funditsand shall be disbursed for special allowances of authorized officials and
owever, are bereft of any evidence to support Our Haus’ meal expense PAO.57computation. Eventhe value it assigned for the
commodations was not supported by any documentary evidence. Without any corroborative evidence, it cannot be
omplied withthis third requisite. Thus, the respondents are still entitled to attorney's fees. The attorney's fees awarded to them shall be paid to the PAO
recompense to the PAO for its provision of free legal services to litigants who have no means of hiring a private lawyer
the pro forma complaint may still beraised in the position paper.
WHEREFORE, in light of these considerations, we conclude that the Court of Appeals correctly found that the Nationa
he respondents’ entitlement to SIL pay by pointing out that this claim was not included
Commission did notinabuse
the pro forma complaint
its discretion filed of July 20, 2011 and Resolution of December 2, 2011. Consequ
in its decision 1âwphi1

ever, we agree with the CA that such omission does not bar the labor tribunals
petition from touching
and AFFIRM the Court uponofthis cause decision
Appeals' of dated May 7, 2012 and resolution dated November 27, 2012 in CA
raised and discussed inthe respondents’ position paper. In Samar-Med Distribution
123273. v. National Labor Relations
No costs.
d:
SO ORDERED.
ntention that the validity of Gutang’s dismissal should not be determined because it had not been included in his
NLRC is bereft of merit. The complaint of Gutang was a mere checklist of possible
ARTURO causes of action that he might have
D. BRION
manner of preparing the complaint was obviously designed to facilitate the filing of
Associate Justicecomplaints by employees and
reby enabled to expediently set forth their grievances in a general manner. But the non-inclusion in the complaint of
ssal did not necessarily mean that the validity of the dismissal could not be an issue.The rules of the NLRC require the
WE CONCUR:
position papers by the parties should they fail to agree upon an amicable settlement, and bar the inclusion of any
entioned in the complaint or position paper from the time of their submission by the parties. In view of this, Gutang’s
d be ascertained not from a reading of his complaint alone but also from a consideration and evaluation of both his ANTONIO T. CARPIO
n paper.54 Associate Justice
Chairperson
itlement to the other monetary benefits
MARIANO C. DEL CASTILLO JOSE PORTUGAL PEREZ
Associate
o alleges payment as a defense has the burden of proving it.Particularly in labor cases, the burden of Justice of
proving payment Associate Justice
s on the employeron the reasoning that the pertinent personnel files, payrolls, records, remittances and other similar
will show that overtime, differentials, service incentive leave and other claims of workers have been paid — are not in ESTELA M. PERLAS-BERNABE
worker but in the custody and absolute control of the employer.55 Associate Justice

s will disclose the absence of any credible document which will show that respondents had been paid their 13th month ATTESTATION
ays. Our Haus merely presented a handwritten certification from its administrative officer that its employees
entitled to five days of service incentive leave as soon as they pass probation. This certification was not even
 usions in the above Decision had been reached in consultation before the case was assigned
11 "Wage" topaid
the to
writer
any employee
of the shall mean the remuneration or earnings, however designated, capable
s Division. in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other
the same, which is payable by an employer to an employee under a written or unwritten contract of e
RPIO done or to be done, or for services rendered or to be rendered and includes the fair and reasonable v
by the Secretary of Labor, of board, lodging , or other facilities customarily furnished by the employert
Division "Fair and reasonable value" shall not include any profit to the employer or to any person affiliated with
[italics and underscoring ours]
CERTIFICATION
12 Rollo,p. 104.

3, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that the conclusions in the
13 Cash Wage. – The minimum wage rates prescribed in Section 1 hereof shall be basic, cash wages. An
een reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.
provide subsidized meals and snacks to his employees providedthat the subsidy shall not be less than 3
P. A. SERENO reasonable value of such facilities. Insuch case, the employer may deduct from the wages of the employ
70% of the value of the meals and snacks enjoyed by the employees, providedthat such deduction is w
authorization of the employees concerned. [emphasis ours]

14 Department of Labor and Employment.

15 Book III, Rule VII-A of the Implementing Rules and Regulations of the Labor Code, November 4, 199
lo, pp. 7-26.
16 Rollo,p. 126.
ned by Associate Justice Rodi! V. Zalameda, and concurred in by Associate Justices Rebecca De Guia-Salvador and
17 Id.
mandie B. Pizarro; Id. at 28-42.

at 43-44. 18 Id.

19 Id. at 136.
ned by Commissioner Dolores M. Peralta-Beley, and concurred in by Commissioners Leonardo L. Leonida and
cedes R. Posada-Lacap; Id. at 62-69.
20 Id. at 136-137.

at 70-76.
21 497 Phil. 892, 928 (2005).

ned by Labor Arbiter Antonio R. Macam; Id. at 129-137.

22 Rollo,pp. 67-68.

at 81.
23 Id. at 161-167.
at 100.
24 Id. at 45-61.
at 81-82.
25 Id. at 35.
at 103.
 of Construction Safety and Health in every project shall be included in the project bidding documents
Instructions to Bidders.
8 Phil. 386 (1997).
45 Mabeza v. National Labor Relations Commission, supra note 27, at 400.
llo, p. 38.
46Section 4 of DOLE Memorandum Circular No. 2 provides that the minimum wage rates shall be the
at 40. without deducting therefrom whatever benefits, supplements or allowances which the employees enjo
from the basic pay.
at 20.
47 Section 2, DOLE Memorandum Circular No. 2.
at 24.
48 Section 4, DOLE Memorandum Circular No. 2.
at 215-238.
49 Supranote 41.
at 227.
50 Id. at 422-423; citations omitted; italics supplied; emphasis and underscoring ours.
at 230.
51 Mayon Hotel & Restaurant v. Adana, supranote 21, at 928.
at 232-233.
52 Mabeza v. National Labor Relations Commission, supra note 27, at 400.
reer Philippines Shipmanagement, Inc. v. Serna, G.R. No. 172086, December 3, 2012, 686 SCRA 676, 683.
53 G.R. No. 162385, July 15, 2013, 701 SCRA 148.

ontoya v. Transmed Manila Corp./Ellena, et al.,613 Phil. 696, 707 (2009).

54 Id. at 159; citation omitted; emphasis and underscoring ours.

55 SLL International Cables Specialist v. National Labor Relations Commission, supranote 41, at 420.
llo,p. 16.
56 Aliling v. Feliciano, G.R. No. 185829, April 25, 2012, 671 SCRA 186, 220.
beza v. National Labor Relations Commission, supra note 27, at 399; emphasis ours.
57 Section 6 of Republic Act No. 9406, inserting Section 16-D in Chapter 5, Title Ill, Book IV of Executi
L International Cables Specialist v. National Labor Relations Commission, G.R. No. 172161, March 2, 2011, 644 SCRA
422-423; citing Atok-Big Wedge Assn. v. Atok-Big Wedge Co., 97 Phil. 294 (1955).
The Lawphil Project - Arellano Law Foundation
llo, p. 173.

idelines Governing Occupational Safety and Health in the Construction Industry.

General Guidelines A. In compliance with Section 17 of DOLE D. O. No. 13, the implementation of construction
y shall be considered in all stages of project procurement (design, estimate, and construction) and its cost shall be
rated to the overall project cost under Pay Item "SPL- Construction Safety and Health" as a lump sum amount, to be
tified in the detailed estimate. Likewise, all requirements, provisions, and instructions pertaining to the implementation