Labor Standards, Case Digests

Labor Standards Cases digest

holiday pay shall be reduced to nine when two holidays fall on the same day.

By: seychellesdoringo Asian Transmission Corp. vs. CA “Holiday Pay” Facts:

On March 11, 1993, DOLE issued an Explanatory Bulletin stating that ‘employees are entitled 200% of their basic wage on April 9, 1993, whether unworked, since that day, apart from being a Good Friday (legal holiday) is also Araw ng Kagitingan (a legal holiday also)’. Despite the explanatory bulletin, Asian Transmission Corp opted to pay its employees only 100% of their basic pay on April 9, 1998. Thus, Bisig ng Asian Transmission Labor Union (BATLU) protested. Office of the Voluntary Arbitrator: Directed the Asian Transmission Corp to pay its covered employees 200% of their regular daily waged for unworked April 19, 1998 which covers two regular holidays. CA: Affirmed the decision of the Voluntary Arbitrator. It further held that ‘in the absence of an explicit provision of the law which provides for a reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor’ (Art. 5, LC) Issue: WON employees are entitled to 200% of their daily basic wage when 2 legal holidays fall on the same day. Decision: (YES) Article 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays (inclusive of 1. New Year’s Day; 2. Maundy Thursday; 3. Good Friday; 4. Araw ng Kagitingan; 5. Labor Day; 6. Independence Day; 7. National Heroes Day; 8. Bonifacio Day; 9. Christmas Day; 10. Rizal Day)… holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten (10) paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of

San Miguel Corp. vs. CA “Muslim Holiday Pay” Facts:

On October 17, 1992, the DOLE, Iligan District Office, conducted a routine inspection in the premises of San Miguel Corporation in Sta. Filomena, Iligan City. In the course of the inspection, it was discovered that there was underpayment by the SMC of regular Muslim holiday pay to its employees. DOLE sent a copy of its inspection result to SMC. However, the company failed to give proof that it was paying regular Muslim holiday pay to its employees. Thus, the Director of DOLE Iligan District Office issued a compliance order directing SMC consider Muslim holidays as regular holidays and to pay both its Muslims and nonMuslims employees holiday pay within thirty (30) days from the receipt of the order. Issue: WON non-Muslim employees of SMC in Iligan City entitled to Muslim Holiday Pay. Conclusion: (YES) SMC asserts that Article 3(3) of PD 1083 (Code of Muslim Personal Laws) provides that provisions of the said Code shall be applicable only to Muslims x x x. However, there should be no distinction between Muslims and non-Muslims as regards to payment of benefits for Muslim holidays. Assuming arguendo that the SMC’s position is correct, then by the same token, Muslims throughtout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. SMC must be reminded that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker’s faith or religion. In addition, Article 3(3) of PD 1083 specifically declares that “nothing herein shall be construed to operate to the prejudice of a non-Muslim.” Finally, the 1999 Handbook on Workers Statutory Benefits categorically stated that: “Considering that all private corporations, offices, agencies, and establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslims and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays. Note: PD no. 1083 Art. 169. Official Muslim holidays. The following are

recognized as legal Muslim holidays: a. Amun Jadid (New Year) b. Maulid-un-Nabi (Birthday of the Prophet Muhammad) c. Lailatul Isra Wal Miraj (Nocturnal Journey and Ascension of the Prophet Muhammad) d. Id-ul-Fitr (Hari Raya Puasa) e. Id-ul-Adha (Hari Raya Haji) Art. 170. Provinces and cities where officially observed.- (1) Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga, and in such other Muslim provinces and cities as may hereafter be created (2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other provinces and cities. Integrated Contractor and Plumbing Works, Inc. vs. NLRC “Work Pool Employee/Project Employee becoming a Regular Employee” Facts: Petitioner is a plumbing contractor. Its business depends on the number and frequency of the projects it is able to contract with its clients. Glen Solon worked for the petitioner. On February 23, 1998, while Solon was about to log out from work, he was informed by the warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated. Thus, he filed a complaint alleging that he was illegally dismissed without just cause and without due process. Issues:

WON Solon was a project employee or a regular employee. Conclusion: A review of Solon’s work assignments patently showed he belonged to a wok pool tapped from when where workers and are assigned whenever their service were needed. In a work pool, the workers do not receive salaries and are free to seek other employment during temporary breaks in the business. They are like regular seasonal regular seasonal workers insofar as the effect of temporary cessation of work is concerned. This arrangement is beneficial to both the employer and employee for it prevents the unjust situation of ‘coddling labor at the expense of capital’ and at the same time enables the workers to attain the status of regular employee. Nonetheless, the pattern of re-hiring and the recurring need for his services are sufficient evidence of the necessity and indispensability of such services to petitioner’s business of trade. A work pool employee is deemed a regular

employee when he has been: 1. continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks 2. these tasks are vital, necessary and indispensable to the usual business or trade of the employer. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade to the employer. Also, if the employee has been performing the job for at least one year, even if the performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Thus, where the employment of project employee is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and are considered regular employees. In the case at bar, Solon had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly rehired due to the demands of the petitioner’s business. Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order. Auto Bus Transport Systems Inc. vs. Antonio Bautista “Service Incentive Leave” Facts:

Antonio Bautista was employed by Auto Bus Transport Systems Inc. He worked as driverconductor with the travel routes Manila-Tuguegarao via Baguio, Baguio-Tuguegarao via Manila and Manila-Tabuk via Baguio. On January 3, 2000, while Bautista was driving along Sta. Fe, Nuueva Viscaya, the bus he was driving accidentally bumped the rear portion of another Auto Bus, as the latter vehicle suddenly stopped at a sharp curve without giving any warning. After the accident, Bautista was not allowed to work until he fully paid the company the amount P75,551.50, representing 30% of the cost of repair of the damaged buses. A month later, he received a letter from the company informing him that he was being terminated. Thus, Baustista filed a complaint for Illegal Dismissal with Mony Claims for nonpayment of 13th month pay and service incentive leave pay. Issue:

WON Bautista was a field personnel and consequently WON he was entitled to service

incentive leave. Conclusion: Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE (a) Every employee who has rendered at least one year of service shall be entitled to a yearly serice incentive leave of 5 days with pay Book III, Rule V: SERIVE INCENTIVE LEAVE SECTION 1. Coverage.- This rule shall apply to all employees except: (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof; Auto Bus claimed that Bautista was not entitled to the grant of service incentive leave because he was paid on purely commission basis as stated in the Implementing Rules and Regulations of the Labor Code. That contention was misplaced. The phrase “those who are engaged on task or contract basis, purely commission basis” should be related with field personnel, applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms they follow. Hence, employees engaged on task or contract basis or paid purely on commission basis are not automatically exempted from the grant of service incentive leave, unless they fall under the classification of field personnel. Field personnel are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty; hence, they are paid specific amount for rendering specific service or performing specific work. It is of judicial notice that the routes that are plied by these bus companies, there are its inspectors assigned at strategic places who board the bus and inspect the passengers, the punched tickets, and he conductor’s reports. There is also mandatory once-a-week car barn or shop day, whether or not there are problems thereon as reported by the driver and/or conductor. They too, must be at specific place at specified time, as they generally observe prompt departure and arrival from their point of origin to their point of destination. In each and every depot, there is always the Dispatcher whose function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper time. The driver was therefore under constant supervision while in the performance of his

work. He cannot be considered a field personnel. He was a regular employee who performs tasks usually necessary and desirable to the usual trade of Auto Bus’ business. Accordingly, he is entitled to the grant of service incentive leave. Philippine Appliance Corporation (PHILACOR) vs. CA “Bonus” Facts:

PHILACOR is a domestic corporation engaged in manufacturing refrigerators, freezers, and washing machines while United Philacor Workers Union-NAFLU is the duly elected collective bargaining representative of the company’s employees. In the 1997 collective bargaining negotiations of the management and the union, PHILACOR offered P4,000.00 to each employee as an “early conclusion bonus.” The bonus was a unilateral incentive for speeding up the collective bargaining negotiations and to encourage the union to exert its best efforts to conclude a CBA according to the PHILACOR. Upon the expiration of their CBA, PHILACOR and the union began their negotiations. However, after 11 meetings, the parties failed to reach an agreement forcing the union to declare a deadlock. Consequently, the union filed a Notice of Strike. Even with the help of NCMB, the parties still failed to reach an agreement regarding wages, rice subsidy, and signing and retroactive bonus. And for the second time, the union filed a Notice of Strike. The said strike lasted for 11 days. Labor Secretary Laguesma assumed jurisdiction over the dispute. He issued a return to work order directing the employees to return to work within 24 hours and the company to accept the said employees. On April 14, 2000, Secretary Laguesma issued an order to be incorporated in the CBA. One of which is the awarding of P3,000.00 signing bonus to every employee of the company. PHILACOR’s argument: The award of the P3,000.00 signing bonus was patently erroneous since it was not part of the employees’ salaries or benefits or of the CBA. It is not demandable or enforceable since it is in the nature of an incentive. As no CBA was concluded through mutual efforts of the parties, the purpose for the signing bonus was not served. Issue: WON the employees P3,000.00 signing bonus.

are

entitled

to

Conclusion: (NO) Two things militate against the grant of signing bonus: (1) the non-fulfillment of the condition for which it was offered, i.e. the speedy and amicable conclusion of the CBA negotiations;

and (2) the failure of the union to prove that the grant of the signing bonus is a long established tradition or a ‘regular’ practice on the part of PHILACOR. (1) It is apparent that there was no more goodwill between them and that the CBA was not signed through mutual efforts alone. Hence, the payment of the signing bonus is no longer justified and to order such payment would be unfair and unreasonable for PHILACOR. (2) Bonus is not a demandable and enforceable obligation but may be granted by the court when it is clear that the giving of such bonus has been the company’s long and regular practice. To be considered to be ‘regular practice,’ the giving of such bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. The signing bonus was only granted in the 1997 CBA negotiation. Previous to that, there is no evidence that PHILACOR ever offered the same. Hence, the giving of such bonus cannot be deemed as an established practice. Honda Phils. Inc. vs. Samahan ng Malayang Manggagawa sa Honda “Computation of 13th Month Pay Facts: The issue stems from certain provisions of the CBA between Honda Phils. and its labor union. The CBA provided that the company shall maintain the present practice in the implementation of the 13th month pay, the company shall grant a 14th month pay computed on the same basis as the computation of the 13th month pay and the company agrees to continue the practice of granting, in its discretion, financial assistance to covered employees in December in each year of not less than 100% of basic pay. The CBA is effective until 2000.In lieu of the strikes and bargaining deadlocks, the company issued a memorandum announcing the new formula for the computation of the 13 th and 14th month pay and the 31 daylong strike shall be considered as unworked days for purposes of computing said benefits. According to the new formula, the amount equivalent to 1/12 of the employee’s basic salary shall be deducted from these bonuses with a commitment however that in the event that the strike is declared legal, Honda shall pay the amount deducted. Respondent union opposed the pro-rated computation of the bonuses. Issue:

WON Honda’s implementation of pro-rated 13th month pay, 14th month pay and financial assistance is valid. Conclusion: Honda wanted to implement a pro-rated computation of the benefits based on the "no work, no pay" rule. According to the company, the phrase "present practice" as mentioned in the CBA refers to

the manner and requisites with respect to the payment of the bonuses, i.e., 50% to be given in May and the other 50% in December of each year. Respondent union, however, insists that the CBA provisions relating to the implementation of the 13thmonth pay necessarily relate to the computation of the same. A cursory reading of the provisions of the CBA shows that they did not state categorically whether the computation of the 13th month pay, 14th month pay and the financial assistance would be based on one full month’s basic salary of the employees, or pro-rated based on the compensation actually received. The arbitrator thus properly resolved the ambiguity in favor of labor. The Court of Appeals affirmed the arbitrator’s finding and added that the computation of the 13th month pay should be based on the length of service and not on the actual wage earned by the worker. Under the Revised Guidelines on the Implementation of the 13th month pay provided that the minimum 13th month pay required by law shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. The revised guidelines also provided for a proration of this benefit only in cases of resignation or separation from work. As the rules state, under these circumstances, an employee is entitled to a pay in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year. The Court of Appeals correctly held that there being no gap in the service of the workers during the calendar year in question, the computation of the 13th month pay should not be pro-rated but should be given in full. It has not been refuted that Honda has not implemented any pro-rating of the 13th month pay before the instant case. Honda did not adduce evidence to show that the 13th month, 14th month and financial assistance benefits were previously subject to deductions or pro-rating or that these were dependent upon the company’s financial standing. It was also the company’s practice to give the bonuses in its full amount.