Dominic Oswald C. Halili, LL.B.

II
Labor Standards Cases 2
nd
Batch
Linton Commercial vs. Hellera G.R. No. !"#$
Facts:
On 17 December 1997, Linton issued a memorandum addressed to its employees
informing them of the company's decision to suspend its operations from 18
December 1997 to !anuary 1998 due to the currency crisis that a"ected its
business operations# Linton submitted an establishment termination report to the
Department of Labor and $mployment %DOL$& regarding the temporary closure of
the establishment co'ering the said period# (he company's operation )as to resume
on * !anuary 1998# On 7 !anuary 1997, Linton issued another memorandum
informing them that e"ecti'e 1+ !anuary 1998, it )ould implement a ne)
compressed )or,)ee, of three %-& days on a rotation basis# .n other )ords, each
)or,er )ould be )or,ing on a rotation basis for three )or,ing days only instead for
si/ days a )ee,# On the same day, Linton submitted an establishment termination
report concerning the rotation of its )or,ers# Linton proceeded )ith the
implementation of the ne) policy )ithout )aiting for its appro'al by DOL$#
0ggrie'ed, si/ty1eight %*8& )or,ers %)or,ers& 2led a 3omplaint for illegal reduction
of )or,days#
.ssue: 4O5 there )as an illegal reduction of )or, )hen Linton implemented a
compressed )or,)ee, by reducing from si/ to three the number of )or,ing days
)ith the employees )or,ing on a rotation basis#
6eld: (he compressed )or,)ee, arrangement )as un7usti2ed and illegal#
(he 8ureau of 4or,ing 3onditions of the DOL$, moreo'er, released a bulletin
pro'iding for in determining )hen an employer can 'alidly reduce the regular
number of )or,ing days# (he said bulletin states that a reduction of the number of
regular )or,ing days is 'alid )here the arrangement is resorted to by the employer
to pre'ent serious losses due to causes beyond his control, such as )hen there is a
substantial slump in the demand for his goods or ser'ices or )hen there is lac, of
ra) materials# 0lthough the bulletin stands more as a set of directory guidelines
than a binding set of implementing rules, it has one main consideration, consistent
)ith the ruling in 9hilippine :raphic 0rts .nc#, in determining the 'alidity of
reduction of )or,ing hours ; that the company )as su"ering from losses#
3ertainly, management has the prerogati'e to come up )ith measures to ensure
pro2tability or loss minimi<ation# 6o)e'er, such pri'ilege is not absolute#
=anagement prerogati'e must be e/ercised in good faith and )ith due regard to the
rights of labor# 0s pre'iously stated, 2nancial losses must be sho)n before a
company can 'alidly opt to reduce the )or, hours of its employees# 6o)e'er, to
date, no de2nite guidelines ha'e yet been set to determine )hether the alleged
losses are su>cient to 7ustify the reduction of )or, hours# .f the standards set in
determining the 7usti2ability of 2nancial losses under 0rticle +8- %i#e#, retrenchment&
or 0rticle +8* %i#e#, suspension of )or,& of the Labor 3ode )ere to be considered,
petitioners )ould end up failing to meet the standards# On the one hand, 0rticle +8*
applies only )hen there is a bona 2de suspension of the employer's operation of a
business or underta,ing for a period not e/ceeding si/ %*& months# ?ecords sho)
that Linton continued its business operations during the e"ecti'ity of the
compressed )or,)ee,, )hich spanned more than the ma/imum period# On the
other hand, for retrenchment to be 7usti2ed, any claim of actual or potential
business losses must satisfy the follo)ing standards: %1& the losses incurred are
substantial and not de minimis@ %+& the losses are actual or reasonably imminent@
%-& the retrenchment is reasonably necessary and is li,ely to be e"ecti'e in
pre'enting the e/pected losses@ and %A& the alleged losses, if already incurred, or
the e/pected imminent losses sought to be forestalled, are pro'en by su>cient and
con'incing e'idence# Linton failed to comply )ith these standards#
%ssociation o& International Shi''in( Lines vs. )NI*+D H%RBOR ,ILO*S-
%SSOCI%*ION O. *H+ ,HILI,,IN+S, INC. G.R No. $2/20
R.1 Cor' vs. 2%S%,I%N NG 1%NGG%3G%4%NG ,IN%G2%IS%3R.1 G.R No.
!2"2#
Collective Bargaining Agreement; Construction and Interpretation
F03(B:
.n the year +CCC, the Flour Di'ision and the BF. Feeds Di'ision of the ?F=
3orporation entered into a collecti'e bargaining agreement %380& )ith the
respecti'e labor unions operating in each di'ision@ %D0=9.150FLE1D=E for the Flour
Di'ision and BE=09.150FLE1D=E for the BF. Feeds Di'ision&#
0mong the terms agreed upon in the 380 is that ?F= 3orporation shall agree
to pay special holiday pay on December -1 of e'ery year pro'ided that the
go'ernment shall declare December -1 as a special holiday#
(he 380 became e"ecti'e in !uly +CCC#
December -1, +CCC )as declared a special holiday by the go'ernment
ho)e'er, ?F= 3orporation refused to pay the agreed holiday pay as it a'erred that
December -1, +CCC falls on a Bunday, )hich is a non1)or, day for ?F= employees#
.BBE$:
4hether or not ?F= 3orporation should pay holiday pay for December -1,
+CCC#
6$LD:
Fes# ?F= must pay because it )as clear in the 380 that it shall pay a special
holiday pay for December -1 if it is declared a special holiday by the go'ernment,
)hich the go'ernment did in this case# (here )as no Guali2cation in the 380# .f the
terms of a 380 are clear and ha'e no doubt upon the intention of the contracting
parties the literal meaning thereof shall pre'ail# .f it )as the intention of the parties
to e/clude non1)or,ing days, then they should ha'e incorporated such terms in the
380#
%BD)L5)%HID R. ,IGC%)L%N 6S S+C)RI*7 %ND CR+DI* IN6+S*IG%*ION,
INC. %ND8OR R+N+ %1B7 R+7+S G.R. No. $"!#9
Facts:
3anoy and 9igcaulan )ere both employed by B3.. as security guards and
)ere assigned to B3..Hs di"erent clients# BubseGuently, ho)e'er, 3anoy and
9igcaulan 2led )ith the Labor 0rbiter separate complaints for underpayment of
salaries and non1payment of o'ertime, holiday, rest day, ser'ice incenti'e lea'e and
1-th month pays# ?espondents, ho)e'er, maintained that 3anoy and 9igcaulan
)ere paid their 7ust salaries and other bene2ts under the la)@ that the salaries they
recei'ed )ere abo'e the statutory minimum )age and the rates pro'ided by the
9hilippine 0ssociation of Detecti'e and 9rotecti'e 0gency Operators %90D90O& for
security guards@ that their holiday pay )ere already included in the computation of
their monthly salaries@ that they )ere paid additional premium of -CI in addition to
their basic salary )hene'er they )ere reGuired to )or, on Bundays and +CCI of
their salary for )or, done on holidays@ and, that 3anoy and 9igcaulan )ere paid the
corresponding 1-
th
month pay for the years 1998 and 1999# Labor arbiter fa'ored to
the 9etitioner and 5L?3 a>rmed the decision of the labor arbiter# ?espondent
appeal to the 3ourt of 0ppeals set aside the ruling of the 5L?3 and Labor 0rbiter#
6ence, the present 9etition for ?e'ie) on 3ertiorari.
.ssues
.# (he 6onorable 3ourt of 0ppeals erred )hen it dismissed the
complaint on mere alleged failure of the Labor 0rbiter and the 5L?3 to
obser'e the prescribed form of decision, instead of remanding the case
for reformation of the decision to include the desired detailed
computation#

..# (he 6onorable 3ourt of 0ppeals erred )hen it JmadeK
complainants su"er the conseGuences of the alleged non1obser'ance
by the Labor 0rbiter and 5L?3 of the prescribed forms of decisions
considering that they ha'e complied )ith all needful acts reGuired to
support their claims#

...# (he 6onorable 3ourt of 0ppeals erred )hen it dismissed the
complaint allegedly due to absence of legal and factual JbasesK despite
attendance of substantial e'idence in the records#
?uling
(he Leri2cation and 3erti2cation of 5on1Forum Bhopping attached to the
petition )as e/ecuted by 9igcaulan alone, it )as plainly and particularly indicated
under the name of the la)yer )ho prepared the same, 0tty# !osefel 9# :rageda, that
he is the Counsel for Petitioner Adbuljuahid Pigcaulan only# .n 'ie) of these,
there is therefore, no doubt, that the petition )as brought only on behalf of
9igcaulan# Bince no appeal from the 30 Decision )as brought by 3anoy, same has
already become 2nal and e/ecutory as to him# 3anoy failed to sho) any reasonable
cause for his failure to 7oin 9igcaulan to personally sign the 3erti2cation of 5on1
Forum Bhopping# .t is his duty, as a litigant, to be prudent in pursuing his claims
against B3.., especially so, if he )as indeed su"ering from 2nancial distress#
(he Labor 0rbiter and the 5L?3 erred in this regard# (he hand)ritten
itemi<ed computations are self1ser'ing, unreliable and unsubstantial e'idence to
sustain the grant of salary di"erentials, particularly o'ertime pay# Ensigned and
unauthenticated as they are, there is no )ay of 'erifying the truth of the
hand)ritten entries stated therein# 4ritten only in pieces of paper and solely
prepared by 3anoy and 9igcaulan, these representati'e daily time records, as
termed by the Labor 0rbiter, can hardly be considered as competent e'idence to be
used as basis to pro'e that the t)o )ere underpaid of their salaries# 4e 2nd
nothingcontention that he had rendered ser'ice beyond eight hours to entitle him to
o'ertime pay and during Bundays to entitle him to restday pay# 6ence, in the
absence of any in the records )hich could substantially support 9igcaulanHs
concrete proof that additional ser'ice beyond the normal )or,ing hours and days
had indeed been rendered, )e cannot a>rm the grant of o'ertime pay to 9igcaulan#
9igcaulan is entitled to holiday pay, ser'ice incenti'e lea'e pay and
proportionate 1-
th
month pay for year +CCC# 0rticle 9A of the Labor 3ode pro'ides
that $'ery )or,er shall be paid his regular daily )age during regular holidays,
e/cept in retail and ser'ice establishments regularly employing less than ten %1C&
)or,ers# 4hile 0rticle 9 of the Labor 3ode pro'ides $'ery employee )ho has
rendered at least one year of ser'ice shall be entitled to a yearly ser'ice incenti'e
of 2'e days )ith pay# 6ence for he rendered ser'ice for more than a year
already# Furthermore, under 9residential Decree 5o# 81,
J-1K
he should be paid his
1-
th
month pay# 0s employer, B3.. has the burden of pro'ing that it has paid these
bene2ts to its employees# (he 30 is not correct in dismissing 9igcaulanHs claims in
its entirety#
3onsistent )ith the rule that all money claims arising from an employer1
employee relationship shall be 2led )ithin three years from the time the cause of
action accrued,
J-AK
9igcaulan can only demand the amounts due him for the period
)ithin three years preceding the 2ling of the complaint in +CCC# Furthermore, since
the records are insu>cient to use as bases to properly compute 9igcaulanHs claims,
the case should be remanded to the Labor 0rbiter for a detailed computation of the
monetary bene2ts due to him#
D)SI* HO*+L vs N%*ION%L )NION O. 4OR2+RS G.R. No. 90$2
.acts:
4age Order 5o# 9, appro'ed by the ?egional (ripartite 4ages and 9roducti'ity 8oard
%?(498& of the 5ational 3apital ?egion %53?&, too, e"ect on 5o'ember +CC1# .t
grants 9-C#CC $3OL0 to particular employees and )or,ers of all pri'ate sectors,
identi2ed as follo)s in Bection 1 thereof:
Bection 1# Epon the e"ecti'ity of this 4age Order, all pri'ate sector
)or,ers and employees in the 5ational 3apital ?egion recei'ing daily )age rates of
(4O 6E5D?$D F.F(F 9$BOB %9+C#CC& up to (4O 6E5D?$D 5.5$(F 9$BOB
%9+9C#CC& shall recei'e an emergency cost of li'ing allo)ance in the amount of
(6.?(F 9$BOB %9-C#CC& per day payable in t)o tranches as follo)s:
0mount of $3OL0 $"ecti'ity
91#CC 5o'ember +CC1
91#CC 1 February +CC+
On +C =arch +CC+, respondent 5ational Enion of 4or,ers in 6otel, ?estaurant and
0llied .ndustries1Dusit 6otel 5i,,o 3hapter %Enion&, through its 9resident, ?eynaldo
3# ?asing %?asing&, sent a letter A to Director 0le/ =araan %Dir# =araan& of the
Department of Labor and $mployment15ational 3apital ?egion %DOL$153?&,
reporting the non1compliance of Dusit 6otel )ith 4O 5o# 9, )hile there )as an on1
going compulsory arbitration before the 5ational Labor ?elations 3ommission
%5L?3& due to a bargaining deadloc, bet)een the Enion and Dusit 6otel@ and
reGuesting immediate assistance on this matter# On +A =ay +CC+, ?asing sent Dir#
=araan another letter follo)ing1up his pre'ious reGuest for assistance#
0cting on ?asing's letters, the DOL$153? sent Labor Btandards O>cer $strellita
5ati'idad %LBO 5ati'idad& to conduct an inspection of Dusit 6otel premises on +A
0pril +CC+# .n the 2rst .nspection, the report sho)ed that Dusit 6otel is e/empt from
complying )ith 4O no# 9# Due to the Becond reGuest for inspection, DOL$
representati'e conducted another round of inspection and the Labor Btandards
O>cer noted the follo)ing in her inspection report:
M 5on1presentation of recordsNpayrolls
M 8ased on submitted payrolls O list of union members by 5E46?0.51DEB.(
6O($L 5.DDO 3hapter, there are one hundred forty1four %1AA& a"ected in the
implementation of 4age Order 5o# 53?1C91P $3OL0 co'ering the periods
from 5o'# NC1 to present#
0ccordingly, the DOL$153? issued a 5otice of .nspection ?esult directing Dusit 6otel
to e"ect restitution andNor correction of the noted 'iolations )ithin 2'e days from
receipt of the 5otice, and to submit any Guestion on the 2ndings of the labor
inspector )ithin the same period, other)ise, an order of compliance )ould be
issued# (he 5otice of .nspection ?esult )as duly recei'ed by Dusit 6otel 0ssistant
9ersonnel =anager ?ogelio Bantos#
.n the meantime, the 5L?3 rendered a Decision 9 dated 9 October +CC+ in 5L?31
53?133 5o# CCC+11C+ ; the compulsory arbitration in'ol'ing the 3ollecti'e
8argaining 0greement %380& deadloc, bet)een Dusit 6otel and the Enion ;
granting the hotel employees the follo)ing )age increases, in accord )ith the 380:
$"ecti'e !anuary 1, +CC1 1 9CC#CCNmonth
$"ecti'e !anuary 1, +CC+ 1 9C#CCNmonth
$"ecti'e !anuary 1, +CC- 1 9*CC#CCNmonth
On ++ October +CC+, based on the results of the second inspection of Dusit 6otel
premises, DOL$153?, through Dir# =araan, issued the Order 1C directing Dusit 6otel
to pay 1AA of its employees the total amount of 91,+18,+AC#CC, corresponding to
their unpaid $3OL0 under 4O 5o# 9@ plus, the penalty of double indemnity,
pursuant to Bection 1+ of ?epublic 0ct 5o# *7+7, 11 as amended by ?epublic 0ct 5o#
8188#
Dusit 6otel 2led a =otion for ?econsideration 1- of the DOL$153? Order dated ++
October +CC+, arguing that the 5L?3 Decision dated 9 October +CC+, resol'ing the
bargaining deadloc, bet)een Dusit 6otel and the Enion, and a)arding salary
increases under the 380 to hotel employees retroacti'e to 1 !anuary +CC1, already
rendered the DOL$153? Order moot and academic# 4ith the increase in the salaries
of the hotel employees ordered by the 5L?3 Decision of 9 October +CC+, along )ith
the hotel employees' share in the ser'ice charges, the 1AA hotel employees,
co'ered by the DOL$153? Order of ++ October +CC+, )ould already be recei'ing
salaries beyond the co'erage of 4O 5o#
0cting on the =otion for ?econsideration of Dusit 6otel, DOL$153? issued a
?esolution 1A on +7 December +CC+, setting aside its earlier Order dated ++
October +CC+ for being moot and academic, in consideration of the 5L?3 Decision
dated 9 October +CC+@ and dismissing the complaint of the Enion against Dusit
6otel, for non1compliance )ith 4O 5o# 9, for lac, of merit#
Iss;es: 4hether the 1AA hotel employees )ere still entitled to $3OL0 granted by
4O 5o# 9 despite the increases in their salaries, retroacti'e to 1 !anuary +CC1,
ordered by 5L?3 in the latter's Decision dated 9 October +CC+# 4hether Dusit 6otel
is liable for the double indemnity for 'iolation of the )age order#
Held: (he 3ourt rules in the negati'e#
.t must be noted that the hotel employees ha'e a right to their share in the ser'ice
charges collected by Dusit 6otel, pursuant to 0rticle 9* of the Labor 3ode of 1991,
to )it:
0rticle 9*# Ber'ice charges# ; 0ll ser'ice charges collected by hotels,
restaurants and similar establishments shall be distributed at the rate of
eighty12'e percent %8I& for all co'ered employees and 2fteen percent
%1I& for management# (he share of employees shall be eGually distributed
among them# .n case the ser'ice charge is abolished, the share of the
co'ered employees shall be considered integrated in their )ages#
Bince Dusit 6otel is e/plicitly mandated by the afore1Guoted statutory pro'ision to
pay its employees and management their respecti'e shares in the ser'ice charges
collected, the hotel cannot claim that payment thereof to its 8+ employees
constitute substantial compliance )ith the payment of $3OL0 under 4O 5o# 9#
Endoubtedly, the hotel employees' right to their shares in the ser'ice charges
collected by Dusit 6otel is distinct and separate from their right to $3OL0@
grati2cation by the hotel of one does not result in the satisfaction of the other#
(he 3ourt, ho)e'er, 2nds no basis to hold Dusit 6otel liable for double indemnity#
Ender Bection + %m& of DOL$ Department Order 5o# 1C, Beries of 1998, -C the
5otice of .nspection ?esult Qshall specify the 'iolations disco'ered, if any, together
)ith the o>cer's recommendation and computation of the unpaid bene2ts due each
)or,er )ith an ad'ice that the employer shall be liable for double indemnity in case
of refusal or failure to correct the 'iolation )ithin 2'e calendar days from receipt of
noticeQ# 0 careful re'ie) of the 5otice of .nspection ?esult dated +9 =ay +CC+,
issued herein by the DOL$153? to Dusit 6otel, re'eals that the said 5otice did not
contain such an ad'ice# 0lthough the 5otice directed Dusit 6otel to correct its noted
'iolations )ithin 2'e days from receipt thereof, it )as not su>ciently apprised that
failure to do so )ithin the gi'en period )ould already result in its liability for double
indemnity# (he lac, of ad'ice depri'ed Dusit 6otel of the opportunity to decide and
act accordingly )ithin the 2'e1day period, as to a'oid the penalty of double
indemnity# 8y ++ October +CC+, the DOL$153?, through Dir# =araan, already issued
its Order directing Dusit 6otel to pay 1AA of its employees the total amount of
91,+18,+AC#CC, corresponding to their unpaid $3OL0 under 4O 5o# 9@ plus the
penalty of double indemnity, pursuant to Bection 1+ of ?epublic 0ct 5o# *7+7, as
amended by ?epublic 0ct 5o# 8188#
0lthough the 3ourt is mindful of the fact that labor embraces indi'iduals )ith a
)ea,er and unlettered position as against capital, it is eGually mindful of the
protection that the la) accords to capital# 4hile the 3onstitution is committed to
the policy of social 7ustice and the protection of the )or,ing class, it should not be
supposed that e'ery labor dispute )ill be automatically decided in fa'or of labor#
=anagement also has its o)n rights )hich, as such, are entitled to respect and
enforcement in the interest of simple fair play#
,.I. 1an;&act;rin( Incor'orated, vs., ,.I. 1an;&act;rin( S;'ervisors and
.oreman %ssociation G.R. No. !$2$
Facts
?0 **AC )as signed into la) on 1C December 1987, pro'iding, among others, an
increase in the statutory minimum )age and salary rates of employees and )or,ers
in the pri'ate sector# .t pro'ides that the minimum )age of )or,ers and employees
in the pri'ate sector shall be increased by 91C, e/cept those outside =anila )ho
shall recei'e an increase of 911, pro'ided those that are already recei'ing abo'e
the minimum )age shall recei'e an increase of 91C# 9. =anufacturing Buper'isors
and Foremen 0ssociation %9.=0BEF0& entered into a ne) 380 )hereby the
super'isors )ere granted an increase of 9*+ per month and the foremen, 9A7 per
month# (he increases )ere made to retroact to 1+ =ay 1987, or prior to the
passage of ?0 **AC# (he application of said 380 resulted in a )age distortion, )hich
prompted the 9.=0BEF0 together )ith the 5ational Labor Enion to 2le a case
against 9.=0 for 'iolation of ?0 **AC# 9.=0 asse'erates that the (he 3ompany and
Buper'isors and Foremen 3ontract absol'es, Guitclaims, and releases the company
for any monetary claim that the super'isors and the foremen may ha'e pre'ious to
the signing of the agreement on 17 December 1987
(he Labor 0rbiter ruled in fa'or of 9.=0BEF0 and ordered 9.=0 to gi'e the 9.=0BEF0
members )age increases eGui'alent to 1-#I of their basic pay# (he 30 a>rmed,
but raised the )age increase to 18#I#
Issues
1 4N5 the 9.=0BEF0, by signing (he 3ompany and Buper'isors and Foremen
3ontract, has )ai'ed any bene2t it may ha'e under ?0 **AC#
+ 4N5 the 1-#I increase in the super'isors and foremenHs basic salary should be
increased to 18#I to correct the )age distortion brought about by the
implementation of ?0 **AC#
!uling
1 5O# (he increase resulting from any )age distortion brought about by the
implementation of the ne) minimum )age la) is not )ai'able#
+ 5O# 0lthough there )as a )age distortion, the same )as cured or remedied )hen
9.=0BEF0 entered into the 1987 380 )ith 9.=0 after the e"ecti'ity of ?0 **AC# (he
1987 380 increased the monthly salaries of the super'isors by 9*+* and 9A7,
)hich re1establishes the gap not only bet)een super'isors and foremen but also
bet)een them and the ran,1and12le employees# Buch gap as re1established by
'irtue of the 380 is more than a substantial compliance )ith ?0 **AC# =oreo'er,
reGuiring 9.=0 to pay 18#I, o'er and abo'e the negotiated )age increases
pro'ided under the 1987 380, is highly unfair and oppressi'e to the former#
A CBA constitutes the la" bet"een the parties "hen freel# and voluntaril# entered
into. It "as not sho"n that PI$A%&FA "as coerced or forced b# PI$A to sign the
'()* CBA. All of its '+ o,cers signed the CBA "ith the assistance of -.&. /he#
signed it full# a"are of the passage of !A 0012. /he dut# to bargain re3uires that
the parties deal "ith each other "ith open and fair minds. PI$A%&FA cannot invo4e
the bene5cial provisions of the '()* CBA but disregard the concessions it
voluntaril# e6tends to PI$A.
7octrine Ruitclaims by laborers are generally fro)ned upon as contrary to public
policy and are held to be ine"ecti'e to bar reco'ery for the full measure of the
)or,erHs rights# (he reason for the rule is that the employer and the employee do
not stand on the same footing#
0rticle 11A9 of the 3i'il 3ode states that: 4hen the la) sets, or authori<es the
setting of a minimum )age for laborers, and a contract is agreed upon by )hich a
laborer accepts a lo)er )age, he shall be entitled to reco'er the de2ciency#
0ccording to ?0 *7+7, )age distortion is a situation )here an increase in prescribed
)age results in the elimination or se'ere contraction of intentional Guantitati'e
di"erences in )age or salary rates bet)een and among employee groups in an
establishment as to e"ecti'ely obliterate the distinctions embodied in such )age
structure based on s,ills, length of ser'ice, or other logical bases of di"erentiation#
Other)ise stated, )age distortion means the disappearance or 'irtual
disappearance of pay di"erentials bet)een lo)er and higher positions in an
enterprise because of compliance )ith a )age order#
(he goal of collecti'e bargaining is the ma,ing of agreements that )ill stabili<e
business conditions and 2/ fair standards of )or,ing conditions#
NOR2IS )NION 6S NOR2IS *R%DING G.R. No. <$/09
Constructive 7ismissal 8 Invalid Practice of $anagement !ights
FAC/%
:nilo )as the 3redit and 3ollection =anager of 5or,is (rading and is in charge of
the 0lbay and 3atanduanes branches of the company# .n +CCC, :nilo )as found to
be submitting o'erstated reports about his area of management )hich misled the
management into belie'ing that :nilo )as doing a good 7ob# 6e )as subseGuently
transferred from his position to being the mar,eting assistant of the companyHs
senior L9 0lbos# :nilo too, the position under protest# 6e sued 5or,is until the case
reached the 5L?3# (he 5L?3 ruled that the transfer is actually a constructi'e
dismissal# 5or,is assailed the decision of the 5L?3 alleging that :niloHs pre'ious
and current position in the company is of eGual ran,#
.BBE$:
4hether or not the transfer of :nilo from being a 3ollections =anager to a
=ar,eting 0ssistant constitutes constructi'e dismissal#
6$LD:
Fes# 4hile the transfer of respondent from 3redit and 3ollection =anager to
=ar,eting 0ssistant did not result in the reduction of his salary, there )as a
reduction in his duties and responsibilities )hich amounted to a demotion
tantamount to a constructi'e dismissal as correctly held by the 5L?3# 0s 3redit and
3ollection =anager, :nilo )as clothed )ith all the duties and responsibilities of a
managerial employee# On the other hand, the )or, of a =ar,eting 0ssistant is
clerical in nature, )hich does not in'ol'e the e/ercise of any discretion# Buch 7ob
entails mere data gathering on 'ital mar,eting informations rele'ant to :niloHs
motorcycles and ma,ing reports to his direct super'isor# 6e became a mere sta"
member in the o>ce of the Benior Lice19resident for =ar,eting#
1etroban= v. N4,C >G.R. No. ##"22. .eb. !, 2//$?
Facts:
8y issuing 4age Order 5o# ?C+1C-, ?(498 granted a general across1the1board
increase of 91#CC to all employees and )or,ers of ?egion +# .nstead of appealing
the )age order to 5493, =etroban, sent a letter1Guery to the 5493# .t later 2led a
petition for certiorari and prohibition )ith the 3ourt of 0ppeals#
.ssues:
)hether the )age order is 'oid and of no legal e"ect
6eld:
4age order is not entirely 'oid, though ?(498 e/ceeded its authority
.n line )ith its declared policy, ?#0# 5o# *7+7created the 5493, 'ested )ith
the po)er to prescribe rules and guidelines for the determination of appropriate
minimum )age and producti'ity measures at the regional, pro'incial or industry
le'els@ and authori<ed the ?(498 to determine and 2/ the minimum )age rates
applicable in their respecti'e regions, pro'inces, or industries therein and issue the
corresponding )age orders, sub7ect to the guidelines issued by the 5493#
9ursuant to its )age 2/ing authority, the ?(498 may issue )age orders
)hich set the daily minimum )age rates, based on the standards or criteria set by
0rticle 1+A of the Labor 3ode#
JB3 cited $3O9 case, t)o %+& )ays of 2/ing minimum )age: the QSoor1)ageQ
method and the Qsalary1ceilingQ methodK
.n the present case, the ?(498 did not determine or 2/ the minimum )age
rate by the QSoor1)age methodQ or the Qsalary1ceiling methodQ in issuing the 4age
Order# (he ?(498 did not set a )age le'el nor a range to )hich a )age ad7ustment
or increase shall be added# .nstead, it granted an across1the1board )age increase#
.n doing so, the ?(498 e/ceeded its authority by e/tending the co'erage of the
4age Order to )age earners recei'ing more than the pre'ailing minimum )age
rate, )ithout a denominated salary ceiling# (he 4age Order granted additional
bene2ts not contemplated by ?#0# 5o# *7+7#
(hus, the 3ourt 2nds that Bection 1, 4age Order 5o# ?C+1C- is 'oid insofar as
it grants a )age increase to employees earning more than the minimum )age rate@
and pursuant to the separability clause of the 4age Order, Bection 1 is declared
'alid )ith respect to employees earning the pre'ailing minimum )age rate#
SLL IN*+RN%*ION%L C%BL+S 6S NLRC G.R No. $2!
GSIS 6S NLRC G.R No. <$!#$
Facts:
(omas Lanting, doing business under the name and style of Lanting Becurity and
4atchman 0gency %LB40& entered into a Becurity Ber'ice 3ontract to pro'ide
security guards to the properties of the :o'ernment Ber'ice .nsurance Bystem
%:B.B& at the contract rate of 9-,CCC#CC per guard per month#
During the e"ecti'ity of the contract, LB40 reGuested the :B.B for an up)ard
ad7ustment of the contract rate in 'ie) of Bection 7 of 4age Order 5o# 1 and
Bection - of 4age Order 5o# +, )hich )ere issued by the ?egional (ripartite 4ages
and 9roducti'ity 8oard153? pursuant to ?epublic 0ct 5o# *7+7, other)ise ,no)n as
the 4age ?ationali<ation 0ct#
0cting on the reGuest of LB40, the :B.B, through its 8oard of (rustees and under
8oard ?esolution 5o# +C7, dated =ay +A, 1991, appro'ed the up)ard ad7ustments
of the contract price from 9-,CCC#CC to 9-,71*#C7 per guard, per month e"ecti'e
5o'ember 1, 199C to !anuary 7, 1991, and 9A,+CC#CC e"ecti'e !anuary 8, 1991 to
=ay -1, 1991# LB40 assigned security guards Daniel Fanila, 6ector =oreno, .sauro
Ferrer, ?ubin 4ilfredo, !esus Delima !r#, =aria Legaspi, Bantiago 5oto !r#, and Lirgilio
Boriano %hereafter complainants& to guard one of :B.B's properties#
On =arch 1, 199-, :B.B terminated the Becurity Ber'ice 3ontract )ith LB40# 0ll
the complainants, e/cept Lirgilio Boriano, )ere absorbed by the incoming security
agency# On =arch 7, 199A, complainants 2led separate complaints against LB40
for underpayment of )ages and non1payment of labor standard bene2ts from =arch
1991 to =arch 1, 199-# Lirgilio Boriano also complained of illegal dismissal#
.n its 9osition 9aper, LB40 alleged that complainants )ere estopped from claiming
that they )ere underpaid because they )ere informed that the pay and bene2ts
gi'en to them )ere based on the contract rate of 91C-#CC per eight hours of )or, or
about 9-,1CC#CC per month#
.ssue: 4hether :B.B is solidarily liable for payment of complainants1respondnents'
salary di"erentials#
6eld: Fes# 0rticles 1C* and 1C7 of the Labor 3ode pro'ide:
0?(# 1C*# 3ontractor or subcontractor# ; 4hene'er an employer enters into
contract )ith another person for the performance of the former's )or,, the
employees of the contractor and of the latter's subcontractor, if any, shall be paid in
accordance )ith the pro'isions of this 3ode#
.n the e'ent that the contractor or subcontractor fails to pay the )age of his
employees in accordance )ith this 3ode, the employer shall be 7ointly and se'erally
liable )ith his contractor or subcontractor to such employees to the e/tent of the
)or, performed under the contract, in the same manner and e/tent that he is liable
to employees directly employed by him#
0?(# 1C7 .ndirect employer# ; (he pro'isions of the immediately preceding
0rticle shall li,e)ise apply to any person, partnership, association or corporation
)hich, not being an employer, contracts )ith an independent contractor for the
performance of any )or,, tas,, 7ob or pro7ect#
.n this case, the :B.B cannot e'ade liability by claiming that it had fully paid
complainants' salaries by incorporating in the Becurity Ber'ice 3ontract the salary
rate increases mandated by 4age Order 5os# 1 and + by increasing the contract
price from 9-,CCC#CC to 9-,17*#C7 per guard per month e"ecti'e 5o'ember 1, 199C
to !anuary 7, 1991, and 9A,+CC#CC e"ecti'e !anuary 8, 1991 to =ay -1, 1991#
.n ?ose)ood 9rocessing, .nc# '# 5ational Labor ?elations 3ommission, + the 3ourt
e/plained the rationale for the 7oint and se'eral liability of the employer, thus:
(he 7oint and se'eral liability of the employer or principal )as enacted to ensure
compliance )ith the pro'isions of the 3ode, principally those on statutory minimum
)age# (he contractor or subcontractor is made liable by 'irtue of his or her status
as a direct employer, and the principal as the indirect employer of the contractor's
employees# (his liability facilitates, if not guarantees, payment of the )or,ers'
compensation, thus, gi'ing the )or,ers ample protection as mandated by the 1987
3onstitution# (his is not unduly burdensome to the employer# Bhould the indirect
employer be constrained to pay the )or,ers, it can reco'er )hate'er amount it had
paid in accordance )ith the terms of the ser'ice contract bet)een itself and the
contractor#
(hus, the 3ourt does not agree )ith the :B.B's claim that a double burden )ould be
imposed upon the latter because it )ould be paying t)ice for complainants'
ser'ices# Buch fears are unfounded# Ender 0rticle 1+17 of the 3i'il 3ode, if the :B.B
should pay the money claims of complainants, it has the right to reco'er from LB40
)hate'er amount it has paid in accordance )ith the terms of the ser'ice contract
bet)een the LB40 and the :B.B# !oint and solidary liability is simply meant to
assure aggrie'ed )or,ers of immediate and su>cient payment of )hat is due them#
(his is in line )ith the policy of the Btate to protect and alle'iate the plight of the
)or,ing class#
%1+RIC%N 4IR+ %ND C%BL+ D%IL7 R%*+D )NION vs %1+RIC%N 4IR+ %ND
C%BL+ CO., INC. G.R No. <</<0
Facts:
0merican 4ire and 3able 3o#, .nc#, is a corporation engaged in the
manufacture of )ires and cables# (here are t)o unions in this company, the
0merican 4ire and 3able =onthly1?ated $mployees Enion and the 0merican 4ire
and 3able Daily1?ated $mployees Enion# On 1* February +CC1, an original action
)as 2led before the 53=8 of the Department of Labor and $mployment by the t)o
unions for 'oluntary arbitration# (hey alleged that the pri'ate respondent, )ithout
'alid cause, suddenly and unilaterally )ithdre) and denied certain bene2ts and
entitlements )hich they ha'e long en7oyed# (hese are Ber'ice 0)ard, -I premium
pay of an employeeHs basic pay for the )or, rendered during 6oly =onday, 6oly
(uesday, 6oly 4ednesday, December +-, +*, +7, +8 and +9,3hristmas 9arty and
9romotional .ncrease#
.ssue:
4O5 the respondent company 'iolated 0rticle 1CC of the Labor 3ode#
6eld:
( he company is not guilty of 'iolating 0rt# 1CC of the Labor 3ode# 0rticle 1CC of
the Labor 3ode pro'ides:
9?O6.8.(.O5 0:0.5B( $L.=.50(.O5 O? D.=.5E(.O5 OF 8$5$F.(B#
T 5othing int his 8oo, shall be construed to eliminate or in any )ay diminish
supplements, or other employee bene2ts being en7oyed at the time of promulgation
of this 3ode#
(he certain bene2ts and entitlements are considered bonuses# 0 bonus can only
been forceable and demandable if it has ripened into a company practice# .t must
also be e/pressly agreed by the employer and employee or it must be on a 2/ed
amount# (he assailed bene2ts )ere ne'er sub7ects of any agreement bet)een the
union and the company# .t )as ne'er incorporated in the 380# Bince all these
bene2ts are in the form of bonuses, it is neither enforceable nor demandable#
,RO*%CIO 6S L%7% 1%N%NGH%7% @ CO. G.R No. !9!<#
F03(B:
0pril 1, 199* 1 ?espondent 2rm hired petitioner as ta/ manager# 6e )as
subseGuently promoted to the position of Benior (a/ =anager# On C1 October 1997,
petitioner )as again promoted to the position of (a/ 9rincipal#
9etitioner recei'ed a yearly lump sum amount during the 2rst t)o years of his
employment, )ith the payments made to him after the annual net incomes of the
2rm had been determined#
0ugust -C, 1999 T petitioner resigned e"ecti'e -C Beptember 1999#
December 1, 19991 petitioner sent a letter to respondent 2rm demanding the
immediate payment of his 1-th month pay, the cash commutation of his lea'e
credits and the issuance of his 1999 3erti2cate of .ncome (a/ 4ithheld on
3ompensation# ()o more demand letters )ere sent#
?espondent 2rm failed to act upon the demand letters
December 1, 1999 1 petitioner 2led before the 5L?3 a complaint for the non1
issuance of petitionerHs 41+ ta/ form for 1999 and the non1payment of the follo)ing
bene2ts:
a& 3ash eGui'alent of petitionerHs lea'e credits in the amount of 9,A*7#*C
b& 9roportionate 1-th month pay for the year 1999@
c& ?eimbursement claims in the amount of 919,C1+#CC#
d& Lump sum pay for the 2scal year 1999 in the amount of 9*7A,7*#7C#
9etitioner also sought moral and e/emplary damages and attorneyHs fees#
L0: respondents to 7ointly and solidarily pay complainant, among the other
payments prayed for, the cash 'alue of the lea'e credits and the lump sum pay for
the 2scal year of 1999#
5L?3: Decision dated !une 7, +CC+ is hereby 0>rmed )ith the modi2cation %as to
amount of reimbursements
30: ?e'ersed 5L?3 and L0 by reducing the monetary a)ard# 5o a)ard for year1end
lump sum pay and reduced cash 'alue of petitionerHs lea'e credits#
.BBE$:
4O5 petitionerHs bene2ts )ere diminished in 'iolation of the 5on1diminution
rule in the Labor 3ode#
6$LD:
9artly granted# 30 a>rmed )ith modi2cation# ?espondents are liable for the
underpayment of the cash eGui'alent of petitionerHs lea'e credits in the amount of
9-9,8#8C#
?0(.O:
(he nature of the F$0?1$5D LE=9 BE= being demanded by petitioner is
characteri<ed as a Qshare in the incenti'e compensation programQ a,a 8O5EB 1 not
a pro2t1sharing arrangement bet)een petitioner and respondent#
(he payment thereof to non1partners of the 2rm li,e herein petitioner )as
discretionary on the part of the chairman and managing partner coming from their
authority to 2/ the compensation of any employee based on a share in the
partnershipHs net income#
(he distribution being merely discretionary, the year1end lump sum payment may
properly be considered as a year1end bonus or incenti'e#
3ontrary to petitionerHs claim, the granting of the year1end lump sum amount
)as precisely dependent on the 2rmHs net income@ hence, the same )as payable
only after the 2rmHs annual net income and cash position )ere determined#
Q8onusQ is a gratuity or act of liberality of the gi'er# .t is something gi'en in
addition to )hat is ordinarily recei'ed by or strictly due the recipient# 0 bonus is
granted and paid to an employee for his industry and loyalty )hich contributed to
the success of the employerHs business and made possible the reali<ation of pro2ts#
:enerally, a bonus is not a demandable and enforceable obligation# .t is so
only )hen it is made part of the )age or salary or compensation# 4hen considered
as part of the compensation and therefore demandable and enforceable, the
amount is usually 2/ed# .f the amount )ould be a contingent one dependent upon
the reali<ation of the pro2ts, the bonus is also not demandable and enforceable#
9hilippine Duplicators, .nc# '# 5L?3: if the bonus is paid only if pro2ts are
reali<ed or a certain amount of producti'ity achie'ed, it cannot be considered part
of )ages# .f the desired goal of production is not obtained, of the amount of actual
)or, accomplished, the bonus does not accrue# Only )hen the employer promises
and agrees to gi'e )ithout any conditions imposed for its payment, such as success
of business or greater production or output, does the bonus become part of the
)age#
(he granting of a bonus is basically a management prerogati'e )hich cannot
be forced upon the employer )ho may not be obliged to assume the onerous
burden of granting bonuses or other bene2ts aside from the employeesH basic
salaries or )ages#
?espondent 2rm is 7usti2ed in declining to gi'e the bonus to petitioner on account of
the latterHs unsatisfactory performance#
+SC%SIN%S 6S SH%NGRI3L%AS 1%C*%N ISL%ND R+SOR* G.R No. $992$
F03(B: !eromie D# $scasinas and $'an ?igor Bingco )ere registered nurses,
engaged by respondent Dr# !essica !oyce ?# 9epito to )or, in her clinic at respondent
Bhangri1LaHs =actan .sland ?esort %Bhangri1La&# $scasinas and Bingco 2led )ith the
5ational Labor ?elations 3ommission %5L?3& a complaint for regulari<ation,
underpayment of )ages, non1payment of holiday pay, night shift di"erential and
1-th month pay against Bhangrila et al#, claiming that they are regular employees
of Bhangri1La#
Bhangri1la claimed that $scasinas and Bingco )ere not its employees but of Dr#
9epito, )hom it retained 'ia =emorandum of 0greement %=O0& pursuant to 0rticle
17 of the Labor 3ode# Dr# 9epito for her part claimed that $scasinas and Bingco
)ere already )or,ing for the pre'ious retained physicians of Bhangri1la before she
)as retained# $scasinas and Bingco, ho)e'er, insist that under 0rticle 17 of the
Labor 3ode, Bhangri1la is reGuired to hire full1time registered nurse, hence their
engagement should be deemed as regular employment# (hey maintain that Dr#
9epito is a labor1only contractor for she has no license or business permit and no
business name registration as mandated by Bec# 19 and +C of the .mplementing
?ules and ?egulations of the Labor 3ode#
(he labor arbiter declared $scasinas and Bingco to be regular employees of Bhangri1
la# (he 5ational Labor ?elations 3ommission, on the other hand, granted Bhangri1
laHs and Dr# 9epitoHs appeal and dismissed $scasinas and Bingco complaint for lac,
of merit, 2nding that no employer1employee relationship e/ists bet)een Bhangri1la
and petitioners#
.BBE$B: 4hether or not $scasinas and Bingco are regular employees of Bhangri1la
and Dr# 9epito
6$LD: /he re3uirements for the e6istence of an emplo#er9emplo#ee relationship are
di:erent from the re3uisites for the e6istence of an independent and permissible
contractor relationship.
(he e/istence of an independent and permissible contractor relationship is generally
established by considering the follo)ing determinants: )hether the contractor is
carrying on an independent business@ the nature and e/tent of the )or,@ the s,ill
reGuired@ the term and duration of the relationship@ the right to assign the
performance of a speci2ed piece of )or,@ the control and super'ision of the )or, to
another@ the employer's po)er )ith respect to the hiring, 2ring and payment of the
contractor's )or,ers@ the control of the premises@ the duty to supply the premises,
tools, appliances, materials and labor@ and the mode, manner and terms of
payment#
On the other hand, e/istence of an employer1 employee relationship is established
by the presence of the follo)ing determinants: %1& the selection and engagement of
the )or,ers@ %+& po)er of dismissal@ %-& the payment of )ages by )hate'er means@
and %A& the po)er to control the )or,er's conduct, )ith the latter assuming primacy
in the o'erall consideration#
0gainst the abo'e1listed determinants, the 3ourt holds that Dr# 9epito is a legitimate
independent contractor# (hat Bhangri1la pro'ides the clinic premises and medical
supplies for use of its employees and guests do not necessarily pro'e that
respondent doctor lac,s substantial capital and in'estment# 8esides, the
maintenance of a clinic and pro'ision of medical ser'ices to its employees is
reGuired under 0rt# 17, )hich are not directly related to Bhangri1laHs principal
business T operation of hotels and restaurants#
0s to payment of )ages, Dr# 9epito is the one )ho under)rites the follo)ing:
salaries, BBB contributions and other bene2ts of the sta"@ group life, group personal
accident insurance and lifeNdeath insurance for the sta" )ith minimum bene2t
payable at 1+ times the employeeHs last dra)n salary, as )ell as 'alue added ta/es
and )ithholding ta/es, sourced from her 9*C,CCC#CC monthly retainer fee and 7CI
share of the ser'ice charges from Bhangri1laHs guests )ho a'ail of the clinic
ser'ices# .t is unli,ely that Dr# 9epito )ould report $scasinas and Bingco as )or,ers,
pay their BBB premium as )ell as their )ages if they )ere not indeed her
employees#
4ith respect to the super'ision and control of the nurses and clinic sta", it is not
disputed that a document, U3linic 9olicies and $mployee =anualV claimed to ha'e
been prepared by Dr# 9epito e/ists, to )hich $scasinas and Bingco ga'e their
conformity and in )hich they ac,no)ledged their co1terminus employment status# .t
is thus presumed that said document, and not the employee manual being follo)ed
by Bhangri1laHs regular )or,ers, go'erns ho) they perform their respecti'e tas,s
and responsibilities#
3ontrary to $scasinas and Bingco contention, the 'arious o>ce directi'es issued by
Bhangri1laHs o>cers do not imply that it is Bhangri1laHs management and not Dr#
9epito )ho e/ercises control o'er them or that Bhangri1la has control o'er ho) the
doctor and the nurses perform their )or,#
.n 2ne, as Bhangri1la does not control ho) the )or, should be performed by
$scasinas and Bingco, it is not $scasinas and BingcoHs employer#
14C3+%S* BON+ )NION and +D)%RDO BOR+L% 6S 1%NIL% 4%*+R
CO1,%N7 G.R No. $#$0