M

a PAL v. NLRC
G.R. No. 85985August 13, 1993

r Facts:
PAL completely revised its 1966 Code of Discipline. The Code was circulated among

c the employees and was immediately implemented, and some employees were forthwith
subjected to the disciplinary measures embodied therein. The Philippine Airlines Employees

o Association (PALEA) filed a complaint before the National Labor Relations Commission
(NLRC). PALEA contended that PAL, by its unilateral implementation of the Code, was guilty

s of unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253 of the
Labor Code. PALEA alleged that copies of the Code had been circulated in limited numbers;

,
that being penal in nature the Code must conform with the requirements of sufficient
publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the
employees. It prayed that implementation of the Code be held in abeyance; that PAL should
discuss the substance of the Code with PALEA; that employees dismissed under the Code be
reinstated and their cases subjected to further hearing; and that PAL be declared guilty of

e unfair labor practice and be ordered to pay damages PAL asserted its prerogative as an
employer to prescribe rules and regulations regarding employees' conduct in carrying out

t
their duties and functions, and alleging that by implementing the Code, it had not violated the
collective bargaining agreement (CBA) or any provision of the Labor Code. Assailing the
complaint as unsupported by evidence, PAL maintained that Article 253 of the Labor Code

. citedby PALEA reffered to the requirements for negotiating a CBA which was inapplicable as
indeed the current CBA had been negotiated.

Issue:

a W/N the formulation of a Code of Discipline among employees is a shared

responsibility of the employer and the employees.

l Ruling:
Petitioner's assertion that it needed the implementation of a new Code of Discipline

. considering the nature of its business cannot be overemphasized. In fact, its being a local
monopoly in the business demands the most stringent of measures to attain safe travel for its
patrons. Nonetheless, whatever disciplinary measures are adopted cannot be properly

v
implemented in the absence of full cooperation of the employees. Such cooperation cannot
be attained if the employees are restive on account, of their being left out in the determination
of cardinal and fundamental matters affecting their employment.

PHILIPPINE AIRLINES vs. NLRC et al

JULY 11, 2010

PHILIPPINE AIRLINES vs. NLRC et al

G.R. No. 132805
Feb. 2, 1999

FACTS:

Private respondent Dr. Fabros was employed as flight surgeon at petitioner company.
He was assigned at the PAL Medical Clinic and was on duty from 4:00 in the afternoon until
12:00 midnight. On Feb.17, 1994, at around 7:00 in the evening, Dr. Fa bros left the clinic to
have his dinner at his residence, which was about 5-minute drive away. A few minutes later,
the clinic received an emergency call from the PAL Cargo Services. One of its employees had
suffered a heart attack. The nurse on duty, Mr. Eusebio, called private respondent at home to
inform him of the emergency. The patient arrived at the clinic at 7:50 in the evening and Mr.
Eusebio immediately rushed him to the hospital. When Dr. Fabros reached the clinic at
around 7:51 in the evening, Mr. Eusebio had already left with the patient to the hospital. The
patient died the following day. Upon learning about the incident, PAL Medical Director ordered
the Chief Flight Surgeon to conduct an investigation. In his explanation, Dr. Fabros asserted
that he was entitled to a thirty-minute meal break; that he immediately left his residence upon
being informed by Mr. Eusebio about the emergency and he arrived at the clinic a few
minutes later; that Mr. Eusebio panicked and brought the patient to the hospital without
waiting for him. Finding private respondent’s explanation unacceptable, the management
charged private respondent with abandonment of post while on duty. He denied that he
abandoned his post on February 17, 1994. He said that he only left the clinic to have his
dinner at home. In fact, he returned to the clinic at 7:51 in the evening upon being informed of
the emergency.
After evaluating the charge as well as the answer of private respondent, he was given a
suspension for three months effective December 16, 1994.

Private respondent filed a complaint for illegal suspension against petitioner.

On July 16, 1996, the Labor Arbiter rendered a decision declaring the suspension of private
respondent illegal. It also ordered petitioner to pay private respondent the amount equivalent
to all the benefits he should have received during his period of suspension plus P500,000.00
moral damages.

Petitioner appealed to the NLRC.

The NLRC, however, dismissed the appeal after finding that the decision of the Labor Arbiter
is supported by the facts on record and the law on the matter. The NLRC likewise denied
petitioner’s motion for reconsideration.

Hence, this petition.

ISSUE:
1. WON the nullifying of the 3-month suspension by the NLRC erroneous.

2. WON the awarding of moral damages is proper.

HELD:
The petition is PARTIALLY GRANTED. The portion of the assailed decision awarding
moral damages to private respondent is DELETED. All other aspects of the decision are
AFFIRMED
1. The legality of private respondent’s suspension: Dr. Fabros left the clinic that night
only to have his dinner at his house, which was only a few minutes’ drive away from the clinic.
His whereabouts were known to the nurse on duty so that he could be easily reached in case
of emergency. Upon being informed of Mr. Acosta’s condition, private respondent immediately
left his home and returned to the clinic. These facts belie petitioner’s claim of abandonment.
Petitioner argues that being a full-time employee, private respondent is obliged to stay in the
company premises for not less than eight (8) hours. Hence, he may not leave the company
premises during such time, even to take his meals. We are not impressed. Art. 83 and 85 of
the Labor Code read: Art. 83. Normal hours of work. — The normal hours of work of any
employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities
with a population of at least one million (1,000,000) or in hospitals and clinics with a bed
capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day,
for five (5) days a week, exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or forty-eight (48) hours, in which
case they shall be entitled to an additional compensation of at least thirty per cent (30%) of
their regular wage for work on the sixth day. For purposes of this Article, “health personnel”
shall include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social
workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants
and all other hospital or clinic personnel. (emphasis supplied) Art. 85. Meal periods. —
Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of
every employer to give his employees not less than sixty (60) minutes time-off for their regular
meals. Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further
states: Sec. 7. Meal and Rest Periods. — Every employer shall give his employees,
regardless of sex, not less than one (1) hour time-off for regular meals, except in the following
cases when a meal period of not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the
employee; (a) Where the work is non-manual work in nature or does not involve strenuous
physical exertion; (b) Where the establishment regularly operates not less than sixteen hours
a day; (c) In cases of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss which the
employer would otherwise suffer; and (d) Where the work is necessary to prevent serious loss
of perishable goods. Rest periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working time. Thus, the eight-hour work period
does not include the meal break. Nowhere in the law may it be inferred that employees must
take their meals within the company premises. Employees are not prohibited from going out
of the premises as long as they return to their posts on time. Private respondent’s act,
therefore, of going home to take his dinner does not constitute abandonment. 2. The award of
moral damages: Not every employee who is illegally dismissed or suspended is entitled to
damages. As a rule, moral damages are recoverable only where the dismissal or suspension
of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor,
or was done in a manner contrary to morals, good customs or public policy In the case at bar,
there is no showing that the management of petitioner company was moved by some evil
motive in suspending private respondent. It suspended private respondent on an honest,
albeit erroneous, belief that private respondent’s act of leaving the company premises to take
his meal at home constituted abandonment of post which warrants the penalty of suspension.
Under the circumstances, we hold that private respondent is not entitled to moral damages.

Professional Video Inc. vs. TESDA, G.R. No. 155504, June 26, 2009, Sovereignty, State
Immunity from Suit, International Law
OCTOBER 21, 2017

FACTS:

In 1999, TESDA, an instrumentality of the government established under R.A. No.

7796 (the TESDA Act of 1994) and attached to the DOLE to develop and establish a national
system of skills standardization, testing, and certification in the country. To fulfill this
mandate, it sought to issue security-printed certification and/or identification polyvinyl ( PVC)
cards to trainees who have passed the certification process. Professional Video Inc. (PROVI)
signed and executed the “Contract Agreement Project PVC ID Card issuance” for the
provision of goods and services in the printing and encoding of the PVC cards. PROVI was
to provide TESDA with the system and equipment compliant with the specifications defined
in the proposal. In return, TESDA would pay PROVI a specified sum of money after TESDA’s
acceptance of the contracted goods and services. PPOVI alleged that TESDA has still an
outstanding balance and still remains unpaid. TESDA claims that it entered the Contract
Agreement and Addendum in the performance of its governmental function to develop and
establish a national system of skills standardization, testing, and certification; in the
performance of this governmental function, TESDA is immune from suit.
ISSUE:

Can TESDA be sued without its consent?

RULING:

TESDA, as an agency of the State, cannot be sued without its consent. The rule that
a state may not be sued without its consent is embodied in Section 3, Article XVI of the
1987 Constitution and has been an established principle that antedates this Constitution. It
is as well a universally recognized principle of international law that exempts a state and its
organs from the jurisdiction of another state.The principle is based on the very essence of
sovereignty, and on the practical ground that there can be no legal right as against the
authority that makes the law on which the right depends. It also rests on reasons of public
policy. That public service would be hindered, and the public endangered, if the sovereign
authority could be subjected to law suits at the instance of every citizen and, consequently,
controlled in the uses and dispositions of the means required for the proper administration
of the government. The proscribed suit that the state immunity principle covers takes on
various forms, namely: a suit against the Republic by name; a suit against an
unincorporated government agency; a suit against a government agency covered by a
charter with respect to the agencys performance of governmental functions; and a suit that
on its face is against a government officer, but where the ultimate liability will fall on the
government. In the present case, the writ of attachment was issued against a government
agency covered by its own charter. As discussed above, TESDA performs governmental
functions, and the issuance of certifications is a task within its function of developing and
establishing a system of skills standardization, testing, and certification in the country. From
the perspective of this function, the core reason for the existence of state immunity
applies i.e., the public policy reason that the performance of governmental function cannot
be hindered or delayed by suits, nor can these suits control the use and disposition of the
means for the performance of governmental functions.
 PNB V PNB EMPLOYEES ASSOCIATION
115 SCRA 507
July 30, 1982
FACTS

PNB and PNB Employees Association (PEMA) had a dispute regarding the proper
computation of overtime pay. PEMA wanted the cost of living allowance (granted in 1958) and
longevity pay (granted in 1961) to be included in the computation. PNB disagreed and the 2
parties later went before the CIR to resolve the dispute.

CIR decided in favor of PEMA and held that PNB should compute the overtime pay of
its employees on the basis of the sum total of the employee’s basic salary or wage plus cost
of living allowance and longevity pay. The CIR relied on the ruling in NAWASA v NAWASA
Consolidated Unions, which held that “for purposes of computing overtime compensation,
regular wage includes all payments which the parties have agreed shall be received during
the work week, including differentiated payments for working at undesirable times, such as at
night and the board and lodging customarily furnished the employee.” This prompted PNB to
appeal, hence this case.

ISSUE

WON the cost of living allowance and longevity pay should be ncluded in the
computation of overtime pay as held by the CIR.

HELD

NO. Ratio Overtime pay is for extra effort beyond that contemplated in the employment
contract; additional pay given for any other purpose cannot be included in the basis for the
computation of overtime pay. Absent a specific provision in the CBA, the bases for the
computation of overtime pay are 2 computations, namely:

1. WON the additional pay is for extra work done or service

rendered

2. WON the same is intended to be permanent and regular, not contingent nor temporary as a
given only to remedy a situation which can change any time.

Reasoning

– Longevity pay cannot be included in the computation of

overtime pay for the very simple reason that the contrary is expressly stipulated in the CBA,
which constitutes the law between the parties.

– As regards cost of living allowance, there is nothing in Commonwealth Act 444 [or “the 8-
hour Labor Law,” now Art. 87 Labor Code] that could justify PEMA’s posture that it should be
added to the regular wage in computing overtime pay. C.A. 444 prescribes that overtime work
shall be paid “at the same rate as their regular wages or salary, plus at least 25% additional.”
The law did not define what is a regular wage or salary. What the law emphasized is that in
addition to “regular wage,” there must be paid an additional 25% of that “regular wage” to
constitute overtime rate of pay. Parties were thus allowed to agree on what shall be mutually
considered regular pay from or upon which a 25% premium shall be based and added to
makeup overtime compensation.

– No rule of universal application to other cases may be justifiably extracted from the
NAWASA case. CIR relies on the part of the NAWASA decision where the SC cited American
decisions whose legislation on overtime is at variance with the law in this jurisdiction. The US
legislation considers work in excess of forty hours a week as overtime; whereas, what is

generally considered overtime in the Philippines is work in

excess of the regular 8 hours a day. It is understandably

material to refer to precedents in the US for purposes of computing weekly wages under a 40-
hour week rule, since the particular issue involved in NAWASA is the conversion of prior
weekly regular earnings into daily rates without allowing diminution or addition.

– To apply the NAWASA computation would require a different formula for each and every
employee. It would require reference to and continued use of individual earnings in the past,
thus multiplying the administrative difficulties of the Company. It would be cumbersome and
tedious a process to compute overtime pay and this may again cause delays in payments,
which in turn could lead to serious disputes. To apply this mode of computation would retard
and stifle the growth of unions themselves as Companies would be irresistibly drawn into
denying, new and additional fringe benefits, if not those already existing, for fear of bloating
their overhead expenses through overtime which, by reason of being unfixed, becomes
instead a veritable source of irritant in labor relations.

**Overtime Pay Rationale Why is a laborer or employee who works beyond the regular hours
of work entitled to extra compensation called, in this enlightened time, overtime pay?

Verily, there can be no other reason than that he is made to work longer than what is
commensurate with his agreed compensation for the statutorily fixed or voluntarily agreed
hours of labor he is supposed to do. When he thus spends additional time to his work, the
effect upon him is multi- faceted; he puts in more effort, physical and/or mental; he is delayed
in going home to his family to enjoy the comforts thereof; he might have no time for relaxation,
amusement or sports; he might miss important pre-arranged engagements; etc. It is thus the
additional work, labor or service employed and the adverse effects just mentioned of his
longer stay in his place of work that justify and are the real reasons for the extra
compensation that is called overtime pay.

**Overtime Pay Definition The additional pay for service or

work rendered or performed in excess of 8 hours a day by employees or laborers in

employment covered by the 8 hour Labor Law [C.A. 444, now Art. 87 Labor Code] and not
exempt from its requirements. It is computed by multiplying the overtime hourly rate by the
number of hours worked in excess of eight.
Disposition decision appealed from is REVERSED

Marcos, et. al. vs. NLRC AND Insular Life Assurance (1995)

FACTS:

Petitioners herein have served respondent Insular for more than 20 years in multiples
of five (20-30 years). They were terminated due to redundancy and thus were given special
redundancy benefits. But they were denied their service awards which was set apart from the
redundancy fund. They were made to sign aquit claim, which they complied, but they still
submitted a letter of protest. They inquired from the DOLE-LS on the validity of the denial of
their service awards, to which DOLE decided in their favour. The service awards were part of
the Employee’s Manual and were therefore company policies. The award was earned on the
anniversary date. Even if the employees were separated from service before the anniversary
date, they were still entitled to the material benefits of the award. However, respondent still
refused to pay this. On its 80 th anniversary, the company approved an anniversary equivalent
of one-month salary to its employees. The petitioners alleged that they were entitled to this.
The LA ruled in petitioners’ favour, but NLRC reversed this, upholding the validity of the
quitclaim they signed voluntarily.
.
ISSUE:

W/N the quitclaim was invalid and if so, petitioners would beentitled to their service
award.

HELD:

Release and Quitclaim INVALID, petitioners were ENTITLED to the service awards.
A deed of release or quitclaim cannot bar an employee from demanding payment to which he
is entitled. Quitclaims are against public policy and are therefore null and void. The Court
does not believe that petitioners signed the Release and Quitclaim voluntarily, as the
subsequent submission of a letter of protest and the inquiry before the NLRC contradicted
their willingness to execute the quitclaim. The special redundancy package could not have
covered the service awards, and respondent’s actions estopped it from claiming such. Service
awards are not bonuses. They are stated in the Employees Manual, which is contractual in
nature therefor the law between the parties. It is company policy and has been in practice by
the company.