Mercury Drug Co VS Dayao PDF

10/7/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 117
VOL. 117, SEPTEMBER 30, 1982 99

Mercury Drug Co., Inc. vs. Dayao
*
No. L-30452. September 30, 1982.
MERCURY DRUG CO., INC., petitioner, vs. NARDO DAYAO, ET

AL., respondents.
Appeal; Labor Law; Petitioner's assignment of error that the C.I.R.

declared the contracts of employment null and void is misplaced inasmuch
as the C.I.R. merely rejected certain portions thereof.—These contracts
were not declared by the respondent court null and void in their entirety.
The respondent court, on the basis of the conflicting evidence presented by
the parties, in effect: 1) rejected the theory of the petitioner company that
the 25% additional com-
________________
* SECOND DIVISION.
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100 SUPREME COURT REPORTS ANNOTATED
pensation claimed by the private respondents for the four-hour work they
rendered during Sundays and legal holidays provided in their contracts of
employment were covered by the private respondents' respective monthly
salaries; 2) gave credence to private respondents', (Nardo Dayao, Ernesto
Talampas and Josias Federico) testimonies that the 25% additional
compensation was not included in the private respondents' respective
monthly salaries and 3) ruled that any agreement in a contract of
employment which would exclude the 25% additional compensation for
work done during Sundays and holidays is null and void as mandated by
law.
central.com.ph/sfsreader/session/0000017503bd8401ab2f8148003600fb002c009e/t/?o=False 1/17
Same; Same; Contracts; The petitioner has not adequately shown that
the C.I.R. abused its discretion in the interpretation of the employment
contracts issued by the petitioner—that the salary specified therein does not
include the 25% additional pay for work on Sundays and holidays.—In not
giving weight to the evidence of the petitioner-company, the respondent
court sustained the private respondents' evidence to the effect that their 25%
additional Compensation for work done on Sundays and Legal Holidays
were not included in their respective monthly salaries. The private
respondents presented evidence through the testimonies of Nardo Dayao,
Ernesto Talampas, and Josias Federico who are themselves among the
employees who filed the case for unfair labor practice in the respondent
court and are private respondents herein. The petitioner-company's
contention that the respondent court's conclusion on the issue of the 25%
additional compensation for work done on Sundays and legal holidays
during the first four hours that the private respondents had to work under
their respective contracts of employment was not supported by substantial
evidence is, therefore, unfounded. Much less do We find any grave abuse of
discretion on the part of the respondent court in its interpretation of the
employment contract's provision on salaries. In view of the controlling
doctrine that a grave abuse of discretion must be shown in order to warrant
our disturbing the findings of the respondent court, the reversal of the court's
findings on this matter is unwarranted. (Sanchez vs. Court of Industrial
Relations, 27 SCRA 490).
Labor Law; Work done at night should be paid more than work done at
daytime.—After the passage of Republic Act 875, this Court has not only
upheld the industrial court's assumption of jurisdiction over cases for salary
differentials and overtime pay [Chua Workers Union (NLU) vs. City
Automotive Co., et al., G.R. No. L-11655, April 29, 1959; Prisco vs. CIR, et
al., G.R. No. L-13806, May 23, 1960] or for payment of additional
compensation for work rendered on Sun-
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VOL. 117, SEPTEMBER 30, 1982 101
days and holidays and for night work [Nassco vs. Almin, et al., G.R. No. L-
9055, November 28, 1958; Detective & Protective Bureau, Inc. vs. Felipe
Guevara, et al., G.R. No. L-8738, May 31, 1957] but has also supported
such court's ruling that work performed at night should be paid more than
work done at daytime, and that if that work is done beyond the worker's
regular hours of duty, he should also be paid additional compensation for
overtime work.
Same; Evidence; Ruling of C.I.R. awarding additional pay for

nighttime work is supported by evidence.—The respondent court's ruling on
additional compensation for work done at night is, therefore, not without
evidence. Moreover, the petitioner-company did not deny that the private
respondents rendered nighttime work. In fact, no additional evidence was
necessary to prove that the private respondents were entitled to additional
compensation for whether or not they were entitled to the same is a question
of law which the respondent court answered correctly. The "waiver rule" is
not applicable in the case at bar. Additional compensation for nighttime
work is founded on public policy, hence the same cannot be waived. (Article
6, Civil Code). On this matter, We believe that the respondent court acted
according to justice and equity and the substantial merits of the case,
without regard to technicalities or legal forms and should be sustained.
Same; Same; In issue of compensation not all the claimants need

testify.—The third assignment of error is likewise without merit. The fact
that only three of the private respondents testified in court does not
adversely affect the interests of the other respondents in the case. The ruling
in Dimayuga v. Court of Industrial Relations (G.R. No. L-0213, May 27,
1957) has been abandoned in later rulings of this Court. In Philippine Land-
Air-Sea Labor Union (PLASLU) v. Sy Indong Company Rice And Corn Mill
(11 SCRA 277) We had occasion to re-examine the ruling in Dimayuga.
Same; Contracts; The contention that the employees knew the terms of
their employment contracts and should be bound thereto is anachronistic in
this time and age. Filipino workers do not have the luxury or freedom to
decline job openings or resign when terms are onerous.—The petitioner's
contention that its employees fully understood what they signed when they
entered into the contracts of employment and that they should be bound by
their voluntary commitments is anachronistic in this time and age. The
Mercury Drug Co., Inc., maintains a chain of drugstores that are open every
day of the week and, for some stores, up to very late at night because of the
102
nature of the pharmaceutical retail business. The respondents knew that they
had to work Sundays and holidays and at night, not as exceptions to the rule
but as part of the regular course of employment. Presented with contracts
setting their compensation on an annual basis with an express waiver of
extra compensation for work on Sundays and holidays, the workers did not
have much choice. The private respondents were at a disadvantage insofar
as the contractual relationship was concerned. Workers in our country do not
have the luxury or freedom of declining job openings or filing resignations

even when some terms and conditions of employment are not only onerous
and inequitous but illegal It is precisely because of this situation that the
framers of the Constitution embodied the provisions on social justice
(Section 6, Article II) and protection to labor (Section 9, Article II) in the
Declaration of Principles and State Policies.
PETITION for review on certiorari of the decision of the Court of

Industrial Relations.
The facts are stated in the opinion of the Court.

Caparas & Ilagan for petitioner.
Gerardo P. Cabo Chan and Elias Banzali for respondents.
GUTIERREZ, JR., J.;
This is a petition for review on certiorari of the decision of the Court

of Industrial Relations dated March 30, 1968 in Case No. 1926-V
and the Resolution of the Court en banc dated July 6, 1968 denying
two separate motions for reconsideration filed by petitioners and
respondents.
The factual background of Case No. 1926-V is summarized by
the respondent Court of Industrial Relations as follows:
"This is a verified petition dated March 17, 1964 which was subsequently
amended on July 31, 1964 filed by Nardo Dayao and 70 others against
Mercury Drug Co., Inc., and/or Mariano Que, President & General
Manager, and Mercury Drug Co., Inc., Employees Association praying, with
respect to respondent corporation and its president and general manager: 1)
payment of their unpaid back wages for work done on Sundays and legal
holidays plus 25% additional compensation from date of their employment
up to June 30, 1962; 2) payment of extra compensation on work done at
night; 3) reinstatement of Januario Referente and Oscar Echalar to their
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VOL. 117, SEPTEMBER 30, 1982 103

former positions with back salaries; and, as against the respondent union, for
its disestablishment and the refund of all monies it had collected from
petitioners.
"In separate motions, respondent management and respondent union
move to dismiss, the first on the ground that:
"I. The petition states no cause of action.

"II. This Court has no jurisdiction over the subject of the claims of
petitioners Januario Referente and Oscar Echalar.
"III. There is another action pending between the same parties, namely,
Mercury Drug Co., Inc., and/or Mariano Que and Nardo Dayao.
while on the other hand, the second alleges that this Court has no
jurisdiction over the acts complained of against the respondent union.
"For reasons stated in the Order dated March 24, 1965, this Court
resolved the motions to dismiss, as follows:
"1. Ground No. 1 of management's motion to dismiss was denied for

lack of merit.
"2. Its second ground was found meritorious and, accordingly Januario
Referente and Oscar Echalar were dropped as party petitioners in
this case.
"3. The third ground was denied, holding that there still exists the
employer-employee relationship between Nardo Dayao and the
management.
"4. With respect to the fourth ground, the Court held that on the basis
of section 7-A of C.A. No. 444, as amended by R.A. No. 1993, 'it
can be safely said that, counting backward the three (3) year
prescriptive period from the date of the filing of the instant petition
—March 20, 1964—all of petitioners' claims have not yet
prescribed.'
"5. In so far as respondent union's motion is concerned, the Court held
that 'petitioners' cause of action against the respondent Association
should be dismissed without prejudice to the refiling of the same as
an unfair labor practice case.'
"Only the respondent management moved to reconsider the Order of

March 24, 1965 but the same was denied by the Court en banc in a
resolution dated August 26, 1965. Respondent submitted an answer to the
amended petition which was subsequently amended on January 6, 1966,
containing some admissions and some denials of
104

the material averments of the amended petition. By way of affir mative and
special defenses, respondents alleged that petitioners have no cause of
action against Mariano Que because their employer is respondent Mercury
Drug Company, Inc., an existing corporation which has a separate and
distinct personality from its incorporators, stockholders and/or officers, that
the company being a service enterprise is excluded from the coverage of the
Eight Hour Labor Law, as amended; that no court has the power to set
wages, rates of pay, hours of employment or other conditions of
employment to the extent of disregarding an agreement thereon between the
respondent company and the petitioners, and of fixing night differential
wages; that the petitioners were fully paid for services rendered under the
terms and conditions of the individual contracts of employment; that the
petition having been verified by only three of the petitioners without
showing that the others authorized the inclusion of their names as petitioners
does not confer jurisdiction to this Court; that there is no employer-
employee relationship between management and petitioner Nardo Dayao
and that his claim has been released and/or barred by another action; and
that petitioners' claims accruing before March 20, 1961 have prescribed."
(Annex "P" pp. 110-112, rollo).
After hearing on the merits, the respondent court rendered its

decision. The dispositive portion of the March 30, 1968 decision
reads:
"IN VIEW OF THE FOREGOING, the Court hereby resolves that:
"1. The claim of the petitioners for payment of backwages

corresponding to the first four hours work rendered on every other
Sunday and first four hours on legal holidays should be denied for
lack of merit.
"2. Respondent Mercury Drug Company, Inc., is hereby ordered to pay
the sixty-nine (69) petitioners:
"(a) An additional sum equivalent to 25% of their respective basic or

regular salaries for services rendered on Sundays and legal holidays
during the period from March 20, 1961 up to June 30, 1962; and
"(b) Another additional sum or premium equivalent to 25% of their
respective basic or regular salaries for nighttime services rendered
from March 20, 1961 up to June 30, 1962.
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VOL. 117, SEPTEMBER 30, 1982 105

"3. Petitioners' petition to convert them to monthly employees should

be, as it is hereby, denied for lack of merit.
"4. Respondent Mariano Que, being an officer and acted only as an
agent in behalf of the respondent corporation, should be absolved
from the money claims of herein petitioners whose employer,
according to the pleadings and evidence, is the Mercury Drug
Company, Inc.
"To expedite the computation of the money award, the Chief Court
Examiner or his authorized representative is hereby directed to proceed to
the office of the respondent corporation at Bambang Street, Sta. Cruz,
Manila, the latter to make available to said employee its records, like time
records, payrolls and other pertinent papers, and compute the money claims
awarded in this decision and, upon the completion thereof, to submit his
report as soon as possible for further disposition of the Court."
Not satisfied with the decision, the respondents filed a motion for its
reconsideration. The motion for reconsideration, was however,
denied by the Court en banc in its Resolution dated July 6, 1968.
Petitioner Mercury Drug Company, Inc., assigned the following
errors in this petition:
RESPONDENT CIR ERRED IN DECLARING THE CONTRACTS OF

EMPLOYMENT, EXHIBITS "A" AND "B", NULL AND VOID AS
BEING CONTRARY TO PUBLIC POLICY AND IN SUSTAINING,
ACCORDINGLY, PRIVATE RESPONDENTS' CLAIMS FOR 25%
SUNDAY AND LEGAL HOLIDAY PREMIUMS BECAUSE SUCH
DECLARATION AND AWARD ARE NOT SUPPORTED BY
SUBSTANTIAL EVIDENCE, THUS INFRINGING UPON THE
CARDINAL RIGHTS OF THE PETITIONER; AND ALSO BECAUSE
THE VALIDITY OF SAID CONTRACTS OF EMPLOYMENT HAS NOT
BEEN RAISED.
II
RESPONDENT CIR ERRED IN SUSTAINING PRIVATE

RESPONDENTS' CLAIMS FOR NIGHTTIME WORK PREMIUMS NOT
ONLY BECAUSE OF THE DECLARED POLICY ON COLLECTIVE
BARGAINING FREEDOM EXPRESSED IN REPUBLIC ACT 875 AND
THE EXPRESS PRO-
106

HIBITION IN SECTION 7 OF SAID STATUTE, BUT ALSO BECAUSE

OF THE WAIVER OF SAID CLAIMS AND THE TOTAL ABSENCE OF
EVIDENCE THEREON.
III
RESPONDENT CIR ERRED IN MAKING AWARDS IN FAVOR OF

THE PRIVATE RESPONDENTS WHO NEITHER GAVE EVIDENCE
NOR EVEN APPEARED TO SHOW THEIR INTEREST.
Three issues are discussed by the petitioner in its first assignment of

error. The first issue refers to its allegation that the respondent Court
erred in declaring the contracts of employment null and void and
contrary to law. This allegation is premised upon the following
finding of the respondent court:
"But the Court finds merit in the claim for the payment of additional
compensation for work done on Sundays and holidays. While an employer
may compel his employees to perform service on such days, the law
nevertheless imposes upon him the obligation to pay his employees at least
25% additional of their basic or regular salaries.
" 'No person, firm or corporation, business establishment or place of center of labor
shall compel an employee or laborer to work during Sundays and legal holidays
unless he is paid an additional sum of at least twenty-five per centum of his regular
remuneration: PROVIDED, HOWEVER, That this prohibition shall not apply to
public utilities performing some public service such as supplying gas, electricity,
power, water, or providing means of transportation or communication.' (Section 4, C.
A. No. 444) (Italics supplied)
Although a service enterprise, respondent company's employees are

within the coverage of C. A. No. 444, as amended known as the
Eight Hour Labor Law, for they do not fall within the category or
class of employees or laborers excluded from its provisions. (Section
2, ibid.)
"The Court is not impressed by the argument that under the contracts of
employment the petitioners are not entitled to such claim for the reason that
the same are contrary to law. Payment of extra or additional pay for services
rendered during Sundays and
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VOL. 117, SEPTEMBER 30, 1982 107

legal holidays is mandated by law. Even assuming that the petitioners had
agreed to work on Sundays and legal holidays without any further
consideration than their monthly salaries, they are not barred nevertheless
from claiming what is due them, because such agreement is contrary to
public policy and is declared null and void by law.
" 'Any agreement or contract between employer and the laborer or employee
contrary to the provisions of this Act shall be null and void ab initio.'
"Under the cited statutory provision, the petitioners are justified to

receive additional amount equivalent to 25% of their respective basic or
regular salaries for work done on Sundays and legal holidays for the period
from March 20, 1961 to June 30, 1962." (Decision, pp. 119-120, rollo)
From a perusal of the foregoing statements of the respondent court,

it can be seen readily that the petitioner-company based its
arguments in its first assignment of error on the wrong premise. The
contracts of employment signed by the private respondents are on a
standard form, an example of which is that of private respondent
Nardo Dayao quoted hereunder:
"Mercury Drug Co., Inc.

1580 Bambang, Manila
October 30, 1959
Mr. Nardo Dayao

1015 Sta. Catalina
Rizal Ave., Exten.
Dear Mr. Dayao:
You are hereby appointed as Checker, in the Checking Department of

MERCURY DRUG CO., INC., effective July 1, 1959 and you shall receive
an annual compensation the amount of Two Thousand four hundred pesos
only (P2,400.00), that includes the additional compensation for work on
Sundays and legal holidays.
Your firm being a Service Enterprise, you will be required to perform
work every day in a year as follows:
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8 Hours work on regular days and all special Holidays that may be declared but with
the 25% additional compensation;
4 Hours work on every other Sundays of the month;
For any work performed in excess of the hours as above mentioned, you
shall be paid 25% additional compensation per hour.
This appointment may be terminated without notice for cause and
without cause upon thirty days written notice.
This supersedes your appointment of July 1, 1959.
Very truly yours,
MERCURY DRUG CO., INC.
(Sgd.) MARIANO QUE
General Manager
ACCEPTED WITH FULL CONFORMITY:
(Sgd.) NARDO DAYAO' "

(EXH. "A" and "1")
(Decision, pp. 114-115, rollo)
These contracts were not declared by the respondent court null and
void in their entirety. The respondent court, on the basis of the
conflicting evidence presented by the parties, in effect: 1) rejected
the theory of the petitioner company that the 25% additional
compensation claimed by the private respondents for the four-hour
work they rendered during Sundays and legal holidays provided in
their contracts of employment were covered by the private
respondents' respective monthly salaries; 2) gave credence to private

respondents', (Nardo Dayao, Ernesto Talampas and Josias Federico)
testimonies that the 25% additional compensation was not included
in the private respondents' respective monthly salaries and 3) ruled
that any agreement in a contract of employment which would
exclude the 25% additional compensation for work done during
Sundays and holidays is null and void as mandated by law.
On the second issue, the petitioner-company reiterated its stand
that under the respective contracts of employment of
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VOL. 117, SEPTEMBER 30, 1982 109

the private respondents, the subject 25% additional compensation

had already been included in the latter's respective monthly salaries.
This contention is based on the testimony of its lone witness, Mr.
Jacinto Concepcion and pertinent exhibits. Thus:
"Exhibit A shows that for the period of October 30, 1960, the annual
compensation of private respondent Nardo Dayao, including the additional
compensation for the work he renders during the first four (4) hours on
every other Sunday and on the eight (8) Legal Holidays at the time was
P2,400.00 or P200.00 per month. These amounts did not represent basic
salary only, but they represented the basic daily wage of Nardo Dayao
considered to be in the amount of P7.36 x 305 ordinary working days at the
time or in the total amount of P2,144.80. So plus the amount of P156.40
which is the equivalent of the Sunday and Legal Holiday rate at P9.20 basic
rate of P7.36 plus 25% thereof or P1.84) x 17, the latter figure representing
13 Sundays and 4 Legal Holidys of 8 hours each. x x x
xxx xxx xxx
"That the required minimum 25% Sunday and Legal Holiday additional
compensation was paid to and received by the employees for the work they
rendered on every other Sunday and on the eight Legal Holidays for the
period October, 1959 to June 30, 1962 is further corroborated by Exhibits 5,
6, 8, 9 and 9-A and the testimony of Mr. Jacinto Concepcion thereon."
(Brief for the Petitioner, pp. 24, 27).
The aforesaid computations were not given credence by the

respondent court. In fact the same computations were not even
mentioned in the court's decision which shows that the court found
such computations incredible. The computations, supposedly
patterned after the WAS Interpretative Bulletin No. 2 of the
Department Labor demonstrated in Exhibits "6", "7", "8", "9", and
"9-A", miserably failed to show the exact and correct annual salary
as stated in the respective contracts of employment of the respondent
employees. The figures arrived at in each case did not tally with the
annual salaries on the employees' contracts of employment, the

difference varying from P1.20 to as much as P14.40 always against
the interest of the employees. The petitioner's defense consists of
mathematical computations made after the filing of the case in
110

order to explain a clear attempt to make its employees work without

the extra compensation provided by law on Sundays and legal
holidays.
In not giving weight to the evidence of the petitioner-company,
the respondent court sustained the private respondents' evidence to
the effect that their 25% additional compensation for work done on
Sundays and Legal Holidays were not included in their respective
monthly salaries. The private respondents presented evidence
through the testimonies of Nardo Dayao, Ernesto Talampas, and
Josias Federico who are themselves among the employees who filed
the case for unfair labor practice in the respondent court and are
private respondents herein. The petitioner-company's contention that
the respondent court's conclusion on the issue of the 25% additional
compensation for work done on Sundays and legal holidays during
the first four hours that the private respondents had to work under
their respective contracts of employment was not supported by
substantial evidence is, therefore, unfounded. Much less do We find
any grave abuse of discretion on the part of the respondent court in
its interpretation of the employment contract's provision on salaries.
In view of the controlling doctrine that a grave abuse of discretion
must be shown in order to warrant our disturbing the findings of the
respondent court, the reversal of the court's findings on this matter is
unwarranted. (Sanchez vs. Court of Industrial Relations, 27 SCRA
490).
The last issue raised in the first assignment of error refers to a
procedural matter. The petitioner-company contends that the
question as to whether or not the contracts of employment were null
and void was not put in issue, hence, the respondent court pursuant
to the Rules of Court should have refrained from ruling that such
contracts of employment were null and void. In this connection We
restate our finding that the respondent court did not declare the
contracts of employment null and void in their entirety. Only the
objectionable features violative of law were nullified. But even
granting that the Court of Industrial Relations declared the contracts
of employment wholly void, it could do so notwithstanding the
procedural objection. In Sanchez v. Court of Industrial Relations,
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VOL. 117, SEPTEMBER 30, 1982 111

supra, this Court speaking through then Justice, now Chief Justice
Enrique M. Fernando, stated:
xxx xxx xxx

"Moreover, petitioners appear to be oblivious of the statutory mandate
that respondent Court in the hearing, investigation and determination of any
question or controversy and in the exercise of any of its duties or power is to
act 'according to justice and equity and substantial merits of the case,
without regard to technicalities or legal forms and shall not be bound by any
technical rules of legal evidence' informing its mind 'in such manner as it
may deem just and equitable.' Again, this Court has invariably accorded the
most hospitable scope to the breadth and amplitude with which such
provision is couched. So it has been from the earliest case decided in 1939
to a 1967 decision."
Two issues are raised in the second assignment of error by the

petitioner-company. The first hinges on the jurisdiction of the
respondent court to award additional compensation for nighttime
work. Petitioner wants Us to re-examine Our rulings on the question
of nighttime work. It contends that the respondent court has no
jurisdiction to award additional compensation for nighttime work
because of the declared policy on freedom of collective bargaining
expressed in Republic Act 875 and the express prohibition in
Section 7 of the said statute. A re-examination of the decisions on
nighttime pay differential was the focus of attention in Rheem of the
Philip-pines, Inc. et al. v. Ferrer, et al. (19 SCRA 130). The earliest
cases cited
by the petitioner-company, Naric v. Naric Workers Union, L-
12075, May 29, 1959 and Philippine Engineers' Syndicate v.
Bautista, L-16440, February 29, 1964, were discussed lengthily.
Thus—
xxx xxx xxx

"2. On the claim for night differentials, no extended discussion is
necessary. To be read as controlling here is Philippine Engineers' Syndicate,
Inc. vs. Hon. Jose S. Bautista, et al., L-16440, February 29, 1964, where this
Court, speaking thru Mr. Chief Justice Cesar Bengzon, declared—
" 'Only one issue is raised: whether or not upon the enactment of Republic Act 875,
the CIR lost its jurisdiction over claims for additional compensation for regular night
work. Petitioner says that this Act reduced the jurisdiction of respondent court and
limited it to specific cases which this Court has defined as: 'x x x (1) when the labor
dispute affects an in-
112

dustry which is indispensable to the national interest and is so certified by the

President to the industrial court (Sec. 10, Republic Act 875); (2) when the
controversy refers to minimum wage under the Minimum Wage Law (Republic Act
602); (3) when it involves hours of employment under the Eight-Hour Labor Law
(Commonwealth Act 444) and (4) when it involves an unfair labor practice [Sec.
5(a), Republic Act 875]', [Paflu, et al. vs. Tan, et al., 52 Off. Gaz, No. 13, 5836].
"Petitioner insists that respondents' case falls in none of these categories because
as held in two previous cases, night work is not overtime but regular work; and that
respondent court's authority to try the case cannot be implied from its 'general
jurisdiction and broad powers' under Commonwealth Act 103 because Republic Act
875 precisely curbed such powers limiting them to certain specific litigations,
beyond which it is not permitted to act.
"We believe petitioner to be in error. Its position collides with our ruling in
the Naric case [National Rice & Corn Corp. (NARIC) vs. NARIC Workers'
Union, et al., G.R. No. L-12075, May 29, 1959] where we held:
" 'While it is true that this Court made the above comment in the aforementioned
case, it does not intend to convey the idea that work done at night cannot also be an
overtime work. The comment only served to emphasize that the demand which the
Shell Company made upon its laborers is not merely overtime work but night work
and so there was need to differentiate night work from daytime work. In fact, the
company contended that there was no law that required the payment of additional
compensation for night work unlike an overtime work which is covered by
Commonwealth Act No. 444 (EightHour Labor Law). And this Court in that case
said that while there was no law actually requiring payment of additional
compensation for night work, the industrial court has the power to determine the
wages that night workers should receive under Commonwealth Act No. 103, and so
it justified the additional compensation in the Shell case for 'hygienic, medical,
moral, cultural and sociological reasons. ' "
xxx xxx xxx
True, in Paflu, et al. vs. Tan, et al., supra, and in a series of cases
thereafter, We held that the broad powers conferred by Commonwealth Act
103 on the CIR may have been curtailed by Republic
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VOL. 117, SEPTEMBER 30, 1982 113

Act 875 which limited them to the four categories therein expressed in line
with the public policy of allowing settlement of industrial disputes via the
collective bargaining process; but We fired no cogent reason for concluding
that a suit of this nature—for extra compensation for night work falls
outside the domain of the industrial court. Withal, the record does not show
that the employer-employee relation between the 64 respondents and the
petitioner had ceased.
After the passage of Republic Act 875, this Court has not only upheld the
industrial court's assumption of jurisdiction over cases for salary
differentials and overtime pay [Chua Workers Union (NLU) vs. City
Automotive Co., et al., G.R. No. L-11655, April 29, 1959; Prisco vs. CIR, et
al., G.R. No. L-13806, May 23, 1960] or for payment of additional
compensation for work rendered on Sundays and holidays and for night
work [Nassco vs. Almin, et al., G.R. No. L-9055, November 28, 1958;
Detective & Protective Bureau, Inc. vs. Felipe Guevara, et al., G.R. No. L-
8738, May 31, 1957] but has also supported such court's ruling that work
performed at night should be paid more than work done at daytime, and that
if that work is done beyond the worker's regular hours of duty, he should
also be paid additional compensation for overtime work. [Naric vs. Naric
Workers' Union, et al., G.R No. L-12075, May 29, 1959, citing Shell Co. vs.
National Labor Union, 81 Phil. 315]. Besides, to hold that this case for extra
compensation now falls beyond the powers of the industrial court to decide,
would amount to a further curtailment of the jurisdiction of said court to an
extent which may defeat the purpose of the Magna Carta to the prejudice of
labor.' [Luis Recato Dy, et al. vs. CIR, G.R. No. L-17788, May 25, 1962]"
The petitioner-company's arguments on the respondent court's

alleged lack of jurisdiction over additional compensation for work
done at night by the respondents is without merit.
The other issue raised in the second assignment of error is
premised on the petitioner-company's contention that the respondent
court's ruling on the additional compensation for nighttime work is
not supported by substantial evidence.
This contention is untenable. Pertinent portions of the respondent
court's decision read:
xxx xxx xxx

"There is no serious disagreement between the petitioners and
respondent management on the facts recited above. The variance in
114

the evidence is only with respect to the money claims. Witnesses for
petitioners declared they worked on regular days and on every other Sunday
and also during all holidays; that for services rendered on Sundays and
holidays they were not paid for the first four (4) hours and what they only
received was the overtime compensation corresponding to the number of
hours after or in excess of the first four hours; and that such payment is
being indicated in the overtime pay for work done in excess of eight hours
on regular working days. It is also claimed that their nighttime services

could well be seen on their respective daily time records. x x (Italics
supplied) (p. 116, rollo)
The respondent court's ruling on additional compensation for work

done at night is, therefore, not without evidence. Moreover, the
petitioner-company did not deny that the private respondents
rendered nighttime work. In fact, no additional evidence was
necessary to prove that the private respondents were entitled to
additional compensation for whether or not they were entitled to the
same is a question of law which the respondent court answered
correctly. The "waiver rule" is not applicable in the case at bar.
Additional compenstion for nighttime work is founded on public
policy, hence the same cannot be waived. (Article 6, Civil Code). On
this matter, We believe that the respondent court acted according to
justice and equity and the substantial merits of the case, without
regard to technicalities or legal forms and should be sustained.
The third assignment of error is likewise without merit. The fact
that only three of the private respondents testified in court does not
adversely affect the interests of the other respondents in the case.
The ruling in Dimayuga v. Court of Industrial Relations (G.R. No.
L-0213, May 27, 1957) has been abandoned in later rulings of this
Court. In Philippine LandAir-Sea Labor Union (PLASLU) v. Sy
Indong Company Rice And Corn Mill (11 SCRA 277) We had
occasion to re-examine the ruling in Dimayuga. We stated:
"The latter reversed the decision of the trial Judge as regards the
reinstatement with backwages of x x x upon the theory that this is not a class
suit; that, 'consequently, it is necessary and imperative that they should
personally testify and prove the charges in the com-
115
VOL. 117, SEPTEMBER 30, 1982 115

plaint', and that, having failed to do so, the decision of the trial Judge in
their favor is untenable under the rule laid down in Dimayuga vs. Court of
Industrial Relations, G.R. No. L-0213 (May 27, 1957). "We do not share the
view taken in the resolution appealed from. As the trial Judge correctly said,
in his dissent from said resolution:
xxx xxx xxx
In the case of Sanchez v. Court of Industrial Relations, supra, this

Court stated:
"To the reproach against the challenged order in the brief of petitioners in
view of only two of the seven claimants testifying, a statement by this Court
in Ormoc Sugar Co., Inc. vs. OSCO Workers Fraternity Labor Union would
suffice by way of refutation. Thus: 'This Court fully agrees with the
respondent that quality and not quantity of witnesses should be the
primordial consideration in the appraisal of evidence.' Barely eight days
later, in another decision, the above statement was given concrete
expression. Thus: 'The bases of the awards were not only the respective
affidavits of the claimants but the testimonies of 24 witnesses (because 6
were not given credence by the court below) who identified the said 239
claimants. The contention of petitioners on this point is therefore
unfounded'. Moreover in Philippine Land-Air-Sea Labor Union (PLASLU)
v. Sy Indong Company Rice & Corn Mill this Court, through the present
Chief Justice, rejected as untenable the theory of the Court of Industrial
Relations concerning the imperative needs of all the claimants to testify
personally and prove their charges in the complaint. As tersely put: 'We do
not share the view taken in the resolution appealed from."
The petitioner's contention that its employees fully understood what

they signed when they entered into the contracts of employment and
that they should be bound by their voluntary commitments is
anachronistic in this time and age.
The Mercury Drug Co., Inc., maintains a chain of drugstores that
are open every day of the week and, for some stores, up to very late
at night because of the nature of the pharmaceutical retail business.
The respondents knew that they had to work Sundays and holidays
and at night, not as exceptions to the rule but as part of the regular
course of employment. Presented with contracts setting their
compensation on an an-
116

nual basis with an express waiver of extra compensation for work on

Sundays and holidays, the workers did not have much choice. The
private respondents were at a disadvantage insofar as the contractual
relationship was concerned. Workers in our country do not have the
luxury or freedom of declining job openings or filing resignations
even whem some terms and conditions of employment are not only
onerous and inequitous but illegal. It is precisely because of this
situation that the framers of the Constitution embodied the
provisions on social justice (Section 6, Article II) and protection to
labor (Section 9, Article II) in the Declaration of Principles And
State Policies.
It is pursuant to these constitutional mandates that the courts are
ever vigilant to protect the rights of workers who are placed in
contractually disadvantageous positions and who sign waivers or
provisions contrary to law and public policy.
WHEREFORE, the petition is hereby dismissed. The decision

and resolution appealed from are affirmed with costs against the
petitioner.
SO ORDERED.
Teehankee (Chairman), Makasiar, Melencio-Herrera,

Plana, Vasquez and Relova, JJ., concur.
Petition dismissed. Decision and resolution affirmed.
Notes.—Work exceeding thirty minutes beyond working hours is

overtime. (NAWASA vs. NWSA Consolidated Unions, 53 SCRA
432.)
Watchmen who work on Sundays and holidays are entitled to
extra pay for work done during these days although they are paid on
a monthly basis and are given one day off. (San Miguel Brewery,
Inc. vs. Democratic Labor Organization, 8 SCRA 613.)
The differential pay for Sundays is a part of the legal wage.
(National Waterworks & Sewerage Authority vs. NWSA
Consolidated Unions, 11 SCRA 766.)
——o0o——
117
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10/7/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 117

VOL. 117, SEPTEMBER 30, 1982 99

MERCURY DRUG CO., INC., petitioner, vs. NARDO DAYAO, ET

Appeal; Labor Law; Petitioner's assignment of error that the C.I.R.

100 SUPREME COURT REPORTS ANNOTATED

Mercury Drug Co., Inc. vs. Dayao

VOL. 117, SEPTEMBER 30, 1982 101

Mercury Drug Co., Inc. vs. Dayao

Same; Evidence; Ruling of C.I.R. awarding additional pay for

Same; Same; In issue of compensation not all the claimants need

102 SUPREME COURT REPORTS ANNOTATED

Mercury Drug Co., Inc. vs. Dayao

have the luxury or freedom of declining job openings or ﬁling resignations

PETITION for review on certiorari of the decision of the Court of

The facts are stated in the opinion of the Court.

GUTIERREZ, JR., J.;

This is a petition for review on certiorari of the decision of the Court

VOL. 117, SEPTEMBER 30, 1982 103

"I. The petition states no cause of action.

"1. Ground No. 1 of management's motion to dismiss was denied for

"Only the respondent management moved to reconsider the Order of

104 SUPREME COURT REPORTS ANNOTATED

After hearing on the merits, the respondent court rendered its

"IN VIEW OF THE FOREGOING, the Court hereby resolves that:

"1. The claim of the petitioners for payment of backwages

"(a) An additional sum equivalent to 25% of their respective basic or

VOL. 117, SEPTEMBER 30, 1982 105

"3. Petitioners' petition to convert them to monthly employees should

RESPONDENT CIR ERRED IN DECLARING THE CONTRACTS OF

RESPONDENT CIR ERRED IN SUSTAINING PRIVATE

106 SUPREME COURT REPORTS ANNOTATED

HIBITION IN SECTION 7 OF SAID STATUTE, BUT ALSO BECAUSE

RESPONDENT CIR ERRED IN MAKING AWARDS IN FAVOR OF

Three issues are discussed by the petitioner in its ﬁrst assignment of

Although a service enterprise, respondent company's employees are

VOL. 117, SEPTEMBER 30, 1982 107

"Under the cited statutory provision, the petitioners are justiﬁed to

From a perusal of the foregoing statements of the respondent court,

"Mercury Drug Co., Inc.

Mr. Nardo Dayao

Dear Mr. Dayao:

You are hereby appointed as Checker, in the Checking Department of

108 SUPREME COURT REPORTS ANNOTATED

ACCEPTED WITH FULL CONFORMITY:

(Sgd.) NARDO DAYAO' "

respondents' respective monthly salaries; 2) gave credence to private

VOL. 117, SEPTEMBER 30, 1982 109

the private respondents, the subject 25% additional compensation

The aforesaid computations were not given credence by the

annual salaries on the employees' contracts of employment, the

110 SUPREME COURT REPORTS ANNOTATED

order to explain a clear attempt to make its employees work without

VOL. 117, SEPTEMBER 30, 1982 111

xxx xxx xxx

Two issues are raised in the second assignment of error by the

xxx xxx xxx

112 SUPREME COURT REPORTS ANNOTATED

dustry which is indispensable to the national interest and is so certiﬁed by the

VOL. 117, SEPTEMBER 30, 1982 113