TOPIC: Domestic servants/ Persons in the personal service of another

G.R. Nos. 169295-96             November 20, 2006

REMINGTON INDUSTRIAL SALES CORPORATION, Petitioner, 

vs.
ERLINDA CASTANEDA, Respondent.

Doctrine: The mere fact that the househelper or domestic servant is working within the premises of the
business of the employer and in relation to or in connection with its business, as in its staffhouses for its
guest or even for its officers and employees, warrants the conclusion that such househelper or domestic
servant is and should be considered as a regular employee of the employer and not as a mere family
househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as
amended.

FACTS:
1. Erlinda Castaneda ("Erlinda") instituted on March 2, 1998 a complaint for illegal dismissal,
underpayment of wages, etc.
2. Erlinda alleged that she started working in August 1983 as company cook with a salary of Php
4,000.00 for Remington, a corporation engaged in the trading business;
3. Remington denied that it dismissed Erlinda illegally. It posited that Erlinda was a domestic helper,
not a regular employee;
4. In a Decision4 dated January 19, 1999, the labor arbiter dismissed the complaint and ruled that
the respondent was a domestic helper under the personal service of Antonio Tan, finding that her
work as a cook was not usually necessary and desirable in the ordinary course of trade and
business of the petitioner corporation,
5. Labor Arbiter: dismissed Castaneda complaint. She was a domestic helper.
6. NLRC: reversed Labor Arbiter.
 Not a domestic helper. No allegation that she worked in the house of director or
Remington, Mr. Tan.
 Facts-wise, she worked as a cook in the office so that it benefited not the family of Mr.
Tan but his employees.
 There is a certification issued by the corporate secretary certifying that she was a
bonafide employee.
 Her work schedule and the fact of being paid a monthly salary indicate that she is a
company employee. The food she prepares are part of the benefit the business provides
for the employees.
7. CA: affirmed NLRC.

ISSUE: Whether or not respondent is petitioner’s regular employee or a domestic helper

HELD: We affirm that respondent was a regular employee of the petitioner and that the latter was guilty of
illegal dismissal.

In Apex Mining Company, Inc. v. NLRC, this Court held that a househelper in the staff houses of an
industrial company was a regular employee of the said firm. We ratiocinated that:
Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms "househelper" or
"domestic servant" are defined as follows:
"The term ‘househelper’ as used herein is synonymous to the term ‘domestic servant’ and shall
refer to any person, whether male or female, who renders services in and about the employer’s
home and which services are usually necessary or desirable for the maintenance and enjoyment
thereof, and ministers exclusively to the personal comfort and enjoyment of the employer’s
family."

The foregoing definition clearly contemplates such househelper or domestic servant who is employed in
the employer’s home to minister exclusively to the personal comfort and enjoyment of the employer’s
family. Such definition covers family drivers, domestic servants, laundry women, yayas, gardeners,
houseboys and similar househelps.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of said
employer. While it may be true that the nature of the work of a househelper, domestic servant or
laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in business or industry or any other
agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the
business of the employer. In such instance, they are employees of the company or employer in the
business concerned entitled to the privileges of a regular employee.

We note the findings of the NLRC, affirmed by the Court of Appeals, that no less than the company’s
corporate secretary has certified that respondent is a bonafide company employee; she had a fixed
schedule and routine of work and was paid a monthly salary of P4,000.00; she served with the company
for 15 years starting in 1983, buying and cooking food served to company employees at lunch
and merienda, and that this service was a regular feature of employment with the company.

IN VIEW WHEREOF, the petition is DENIED for lack of merit. The assailed Decision dated January 31,
2005, and the Resolution dated August 11, 2005, of the Court of Appeals in CA-G.R. SP Nos. 64577 and
68477 are AFFIRMED. Costs against petitioner.
AVELINO LAMBO and VICENTE BELOCURA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and J.C. TAILOR SHOP and/or JOHNNY
CO, respondents.

Facts:

Petitioners AvelinoLambo and Vicente Belocura were employed as tailors by private respondents J.C.
Tailor Shop and/or Johnny Co. They worked from 8:00 a.m. to 7:00 p.m. daily, including Sundays and
holidays. As in the case of the other 100 employees of private respondents, petitioners were paid on a
piece-work basis, according to the style of suits they made. Regardless of the number of pieces they
finished in a day, they were each given a daily pay of at least P64.00.

On January 17, 1989, petitioners filed a complaint against private respondents for illegal dismissal and
sought recovery of overtime pay, holiday pay, premium pay on holiday and rest day, service incentive
leave pay, separation pay, 13th month pay, and attorney’s fees.1âwphi1.nêt

After hearing, Labor Arbiter Jose G. Gutierrez found private respondents guilty of illegal dismissal and
accordingly ordered them to pay petitioners’ claims.

On appeal by private respondents, the NLRC reversed the decision of the Labor Arbiter.

Petitioners allege that they were dismissed by private respondents as they were about to file a petition
with the Department of Labor and Employment (DOLE) for the payment of benefits such as Social
Security System (SSS) coverage, sick leave and vacation leave. They deny that they abandoned their
work.

Issue:

Whether or not the petitioners are entitled to overtime pay, holiday pay, etc.

Held: Yes.

First. There is no dispute that petitioners were employees of private respondents although they were paid
not on the basis of time spent on the job but according to the quantity and the quality of work produced by
them. There are two categories of employees paid by results: (1) those whose time and performance are
supervised by the employer. (Here, there is an element of control and supervision over the manner as to
how the work is to be performed. A piece-rate worker belongs to this category especially if he performs
his work in the company premises.); and (2) those whose time and performance are unsupervised. (Here,
the employer’s control is over the result of the work. Workers on pakyao and takay basis belong to this
group.) Both classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced
in garment factories where work is done in the company premises, while payment
on pakyao and takay basis is commonly observed in the agricultural industry, such as in sugar plantations
where the work is performed in bulk or in volumes difficult to quantify.  4 Petitioners belong to the first
category, i.e., supervised employees.

In this case, private respondents exercised control over the work of petitioners. As tailors, petitioners
worked in the company’s premises from 8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays. The
mere fact that they were paid on a piece-rate basis does not negate their status as regular employees of
private respondents. The term "wage" is broadly defined in Art. 97 of the Labor Code as remuneration or
earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task,
piece or commission basis. Payment by the piece is just a method of compensation and does not define
the essence of the relations. 7 Nor does the fact that petitioners are not covered by the SSS affect the
employer-employee relationship.

Indeed, the following factors show that petitioners, although piece-rate workers, were regular employees
of private respondents: (1) within the contemplation of Art. 280 of the Labor Code, their work as tailors
was necessary or desirable in the usual business of private respondents, which is engaged in the tailoring
business; (2) petitioners worked for private respondents throughout the year, their employment not being
dependent on a specific project or season; and, (3) petitioners worked for private respondents for more
than one year. 8

WHEREFORE, the decision of the National Labor Relations Commission is SET ASIDE and another one
is RENDERED ordering private respondents to pay petitioners the total amount of One Hundred Eighty-
One Thousand One Hundred Two Pesos and 40/100 (P181,102.40), as computed above.1âwphi1.nêt

SO ORDERED.
G.R. No. L-9265             April 29, 1957

LUZON STEVEDORING CO., INC., petitioner, 

vs.
LUZON MARINE DEPARTMENT UNION and THE HON. MODESTO CASTILLO, THE HON. JOSE S.
BAUTISTA, THE HON. V. JIMENEZ YANSON and THE HON. JUAN L. LANTING, Judges of the Court
of Industrial Relations, respondents.

FELIX, J.:

Facts: Petition for review on certiorari in the resolution of the Court of Industrial Relations. 

Herein respondents filed a petition with the CIR containing the full recognition of the right of Collective
bargaining, close shop and check off. Also, that the work performed in excess of 8 hours be paid an
overtime pay of 50 per cent the regular rate of pay, and that work performed on  Sundays and legal
holidays be paid double the regular rate of pay. In one of the hearing of the case, the Court ruled that the
employees are only entitled to receive overtime pay for work rendered in excess of 8 hours on ordinary
days including Sundaysand legal holidays.

Herein petitioner sought for the reconsideration of the decision only in so far as it interpreted that the
period during which a seaman is aboard a tugboat shall be considered as “working time” for the purpose
of the 8 – hours – Labor Law. However, it was denied. Hence, this petition. 

ISSUE: Is the definition for "hours of work" as presently applied to dryland laborers equally applicable to
seamen? Or should a different criterion be applied by virtue of the fact that the seamen's employment is
completely different in nature as well as in condition of work from that of a dryland laborer?

HELD: Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:

SEC. 1. The legal working day for any person employed by another shall be of not more than
eight hours daily. When the work is not continuous, the time during which the laborer is not
working AND CAN LEAVE HIS WORKING PLACE and can rest completely, shall not be counted.

The Court ruled that we do not need to set for seaman a criterion different from that applied to laborers on
land, that the only thing to be done is to determine the meaning and scope of the term “working place”. A
laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be
counted, it being enough that he “cease to work” may rest completely and leave or may leave at his will
the spot where he actually stays while working, to go somewhere else, whether within or outside
the premises of said factory, shop or boat. If these requires are complied with, the period of such rest
shall not be counted. Claimants rendered services to the Company from 6am to 6pm
including Sundays and holidays, which implies either that saidlaborers were not given any recess at all, or
that they were not allowed to leave the spot their working place, or that they could not rest completely.
Resolutions of the Court of Industrial Relations appealed from are affirmed with costs against petitioner.

IV. The members set of respondent Union having expressly manifested acquiescence over a period of
almost two years with reference to the sufficiency of their wages and having made no protest whatsoever
with reference to said compensation does the legal and equitable principle of estoppel operate to bar
them from making a claim for, or making any recovery of, back overtime compensation?

We are going to discuss these two issues jointly. Section 6 of Commonwealth Act No. 444 provides:
Sec. 6. Any agreement or contract between the employer and the laborer or employee contrary to the
provisions of this Act shall be null and void ab initio.

In the case of the Manila Terminal Co. vs. Court of Industrial Relations et al., 91 Phil., 625, 48 Off. Gaz.,
2725, this Court held:

The principles of estoppel and laches cannot be, invoked against employees or laborers in an
action for the recovery of compensation for past overtime work. In the first place, it would be
contrary to the spirit of the Eight-Hour Labor Law, under which. as already seen, the laborers
cannot waive their right to extra compensation. In the second place, the law principally obligates
the employer to observe it, so much so that it punishes the employer for its violation and leaves
the employee free and blameless. In the third place, the employee or laborer is in such a
disadvantageous position as to be naturally reluctant or even apprehensive in asserting a claim
which may cause the employer to devise a way for exercising his right to terminate the
employment.

Moreover, if the principle of estoppel and laches is to be applied, it would bring about a situation whereby
the employee or laborer, can not expressly renounce the right to extra compensation under the Eight-
Hour Labor Law, may be compelled to accomplish the same thing by mere silence or lapse of time,
thereby frustrating the purpose of the law by indirection.
G.R. No. L-15422           November 30, 1962

NATIONAL DEVELOPMENT COMPANY, petitioner, 

vs.
COURT OF INDUSTRIAL RELATIONS and NATIONAL TEXTILE WORKERS UNION, respondents.

FACTS:

At the National Development Co., a government-owned and controlled corporation, there were four shifts
of work. One shift was from 8 a.m. to 4 p.m., while the three other shifts were from 6 a.m. to 2 p.m; then
from 2 p.m. to 10 p.m. and, finally, from 10 p.m. to 6 a.m. In each shift, there was a one-hour mealtime
period, to wit: From (1) 11 a.m. to 12 noon for those working between 6 a.m. and 2 p.m. and from (2) 7
p.m. to 8 p.m. for those working between 2 p.m. and 10 p.m.

The records disclose that although there was a one-hour mealtime, petitioner nevertheless credited the
workers with eight hours of work for each shift and paid them for the same number of hours. However,
since 1953, whenever workers in one shift were required to continue working until the next shift (so bale 2
shifts sila), petitioner instead of crediting them with eight hours of overtime work, has been paying them
for six hours only(total of 12 hours), petitioner avvered that the two hours corresponding to the mealtime
periods should not be included in computing compensation. On the other hand, respondent National
Textile Workers Union whose members are employed at the NDC, maintained the opposite view and
asked the Court of Industrial Relations to order the payment of additional overtime pay corresponding to
the mealtime periods.

CIR held that mealtime should be counted in the determination of overtime work and accordingly ordered
petitioner to pay P101,407.96

Petitioner appealed to this court and alleged that CIR did not make "a correct appraisal of the facts, in the
light of the evidence" in holding that mealtime periods should be included in overtime work because
workers could not leave their places of work and rest completely during those hours.

ISSUE: whether or not the mealtime breaks should be included in the working time

The other issue raised in the appeal is whether or not, on the basis of the evidence, the mealtime breaks
should be considered working time under the following provision of the law;

The legal working day for any person employed by another shall be of not more than eight hours
daily. When the work is not continuous, the time during which the laborer is not working and can
leave his working place and can rest completely shall not be counted. (Sec. 1, Com. Act No. 444,
as amended. Emphasis ours.)

1. under the law, the idle time that an employee may spend for resting and during which he may leave the
spot or place of work though not the premises 2 of his employer, is not counted as working time only where
the work is broken or is not continuous.

The determination as to whether work is continuous or not is mainly one of fact which We shall not review
as long as the same is supported by evidence.

That is why We brushed aside petitioner's contention in one case that workers who worked under a 6
a.m. to 6 p.m. schedule had enough "free time" and therefore should not be credited with four hours of
overtime and held that the finding of the CIR "that claimants herein rendered services to the Company
from 6:00 a.m. to 6:00 p.m. including Sundays and holidays, . . . implies either that they were not allowed
to leave the spot of their working place, or that they could not rest completely" (Luzon Stevedoring Co.,
Inc. v. Luzon Marine Department Union, et al., G.R. No. L-9265, April 29, 1957).

Indeed, it has been said that no general rule can be laid down is to what constitutes compensable work,
rather the question is one of fact depending upon particular circumstances, to be determined by the
controverted in cases

2. Here, the work in petitioners company is continuous based on the evidence such as the time cards
which showed it was continuous and the eight hour credit given to employees who work a single shift.

CIR's finding that work in the petitioner company was continuous and did not permit employees and
laborers to rest completely is not without basis in evidence and following our earlier rulings, shall not
disturb the same. Thus, the CIR found:

While it may be correct to say that it is well-high impossible for an employee to work while he is
eating, yet under Section 1 of Com. Act No. 444 such a time for eating can be segregated or
deducted from his work, if the same is continuous and the employee can leave his working place
rest completely. The time cards show that the work was continuous and without interruption.
There is also the evidence adduced by the petitioner that the pertinent employees can freely
leave their working place nor rest completely. There is furthermore the aspect that during the
period covered the computation the work was on a 24-hour basis and previously stated divided
into shifts.

From these facts, the CIR correctly concluded that work in petitioner company was continuous and
therefore the mealtime breaks should be counted as working time for purposes of overtime compensation.

Petitioner gives an eight-hour credit to its employees who work a single shift say from 6 a.m. to 2 p.m.
Why cannot it credit them sixteen hours should they work in two shifts?

Appeal dismissed
Topic: on-call

SIME DARBY PILIPINAS, INC. petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY SALARIED
EMPLOYEES ASSOCIATION (ALU-TUCP), respondents

FACTS:

Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and other
rubber products. Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, is an
association of monthly salaried employees of petitioner at its Marikina factory. On 14 August 1992
petitioner issued a memorandum to all factory-based employees advising all its monthly salaried
employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department
working on shifts, a change in work schedule. Excluded from the above schedule are the Warehouse and
QA employees who are on shifting. Their work and break time schedules will be maintained as it is now.
Since private respondent felt affected adversely by the change in the work schedule and discontinuance
of the 30-minute paid "on call" lunch break, it filed on behalf of its members a complaint with the Labor
Arbiter for unfair labor practice, discrimination and evasion of liability .

Issue:
Related to the topic: What is the meaning of “on call?”

Held:
While the old work schedule included a 30-minute paid lunch break, the employees could be called upon
to do jobs during that period as they were "on call." Even if denominated as lunch break, this period could
very well be considered as working time because the factory employees were required to work if
necessary and were paid accordingly for working.

Note:
The court ruled that the change in their work schedule was a valid exercise of management prerogative.
ARICA VSNLRC
FACTS:
Case stemmed from a complaint filed against private respondent for assembly time, moral damages and
attorneys fees. The labor arbiter rendered a decision in favor of respondents holding that the 30 minute
assembly time cannot be considered waiting time or work time and therefore not compensable. NLRC
upheld the ruling. Petitioners claim that this 30 minute assembly time is necessarily and primarily for
private respondents benefit.

The following activities are done during the 30 minute assembly time, roll call of the employees,
accomplishment of the laborers daily accomplishment report, get from stockroom the working materials
and tools and lastly, they travel to the field bringing with them their tools, equipment and materials.

Issue: is the 30 minute assembly time compensable? No.

Held:
The 30 minute assembly time is a deeply rooted, routinary practice of the employees, and the
proceedings attendant thereto are not infected with complexities as to deprive the workers the time to
attend to other personal pursuits. Their houses are situated right on the area where the farm are located,
such that after the roll call, which does not necessarily require the personal presence, they can go back to
their houses to attend to some chores. In short, they are not subject to the absolute control of the
company during this period, otherwise, failure to report in the assembly time would justify the company to
impose disciplinary measures. The CBA does not contain any provision to this effect; the record is also
bare of any proof on this point. This, therefore, demonstrates the indubitable fact that the 30 minutes
assembly time was not primarily intended for the interest of the employer, but ultimately for the employees
to indicate their availability or non-availability for work during every working day.

It is also clear that the petitioners are merely reiterating the very same claim which they filed through the
ALU and which records show had already long been considered terminated and closed by the Supreme
Court. Therefore, the NLRC had basis to state that the claim is already barred by res judicata.
University of Pangasinan Faculty Union v. University of Pangasinan,
G.R. No. L-63122, 127 SCRA 691
PONENTE: GUTIERREZ JR., J.
FACTS:
 Petitioner is a labor union composed of faculty members of the respondent University of
Pangasinan. The petitioner filed a complaint against the private respondent seeking:
o (a) the payment of Emergency Cost of Living Allowances (ECOLA) for November 7 to
December 5, 1981, a semestral break;
o (b) salary increases from the sixty (60%) percent of the incremental proceeds of
increased tuition fees; and
o (c) payment of salaries for suspended extra loads.
 The petitioner’s members are full-time professors, instructors, and teachers of respondent
University. The petitioner’s members were fully paid their regular monthly salaries. However, from
November 7 to December 5, during the semestral break, they were not paid their ECOLA. The
private respondent claims that the teachers are not entitled thereto because the semestral break
is not an integral part of the school year and there being no actual services rendered by the
teachers during said period, the principle of "No work, no pay" applies.
 The petition was dismissed by the NLRC. Thus, Petitioners filed for certiorari with the Supreme
Court

ISSUE: WHETHER OR NOT PETITIONER’S MEMBERS ARE ENTITLED TO ECOLA DURING THE
SEMESTRAL BREAK FROM NOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL
YEAR
HELD:
 The various Presidential Decrees on ECOLAs to wit: PD’s 1614, 1634, 1678 and 1713, provide
on "Allowances of Fulltime Employees . . ." that:
o "Employees shall be paid in full the required monthly allowance regardless of the number
of their regular working days if they incur no absences during the month. If they incur
absences without pay, the amounts corresponding to the absences may be deducted
from the monthly allowance . . ." ; and on "Leave of Absence Without Pay", that "All
covered employees shall be entitled to the allowance provided herein when they are on
leave of absence with pay."
 It is beyond dispute that the petitioner’s members are full-time employees receiving their monthly
salaries irrespective of the number of working days or teaching hours in a month. However, they
find themselves in a most peculiar situation whereby they are forced to go on leave during
semestral breaks. These semestral breaks are in the nature of work interruptions beyond the
employees’ control. As such, these breaks cannot be considered as absences within the meaning
of the law for which deductions may be made from monthly allowances
 The "No work, no pay" principle does not apply in the instant case. The petitioner’s members
received their regular salaries during this period. It is clear from the aforequoted provision of law
that it contemplates a "no work" situation where the employees voluntarily absent themselves.
 Petitioners, in the case at bar, certainly do not, ad voluntatem, absent themselves during
semestral breaks. Rather, they are constrained to take mandatory leave from work.
 Private Respondent also argues "the fact of receiving a salary alone should not be the basis of
receiving ECOLA". SECTION 5. Allowance for Unworked Days. — "a) All covered employees
whether paid on a monthly or daily basis shall be entitled to their daily living allowance when they
are paid their basic wage."
 This provision, at once refutes the above contention. It is evident that the intention of the law is to
grant ECOLA upon the payment of basic wages. Hence, we have the principle of "No pay, no
ECOLA" the converse of which finds application in the case at bar.
 Petitioners cannot be considered to be on leave without pay so as not to be entitled to ECOLA,
for, as earlier stated, the petitioners were paid their wages in full for the months of November and
December of 1981, notwithstanding the intervening semestral break.
 Furthermore, we may also by analogy apply the principle enunciated in the Omnibus Rules
Implementing the Labor Code to wit: Sec. 4. Principles in Determining Hours Worked. — The
following general principles shall govern in determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
o "(d) The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered time either if the imminence of the resumption of
work requires the employee’s presence at the place of work or if the interval is too brief to
be utilized effectively and gainfully in the employee’s own interest.
Legahi v. NLRC
DOCTRINE:
The rendition of overtime work and the submission of sufficient proof that said work was actually
performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should
be computed on the basis of 30% of the basic monthly salary. In short, the contract provision guarantees
the right to overtime pay but the entitlement to such benefit must first be established.

The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore,
whether they were on board and can not leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said number of hours.

FACTS:
Sometime in November 1992, Legahi, a Chief Cook aboard M/V “Federal Nord” by the Northsouth Ship
Management (NSM), was asked by the Shipmaster to prepare a victualling cost statement for the month
of October 1992. After learning that such preparation involves mathematical skills, as it would require
estimation of food cost, value of stocks, etc. he intimated that he did not know how to do such work as it
was not part of the duties of a chief cook. He was told that it was not a difficult job and that he only
needed to copy the previous forms. After much reluctance, petitioner nonetheless prepared the statement
in deference to the Shipmaster.

Petitioner was requested again to prepare the victualling cost statement for the month of November,
December and January. He obeyed since he was afraid he would earn the ire of his superiors if he
refused. However, on January 6, 1993, he was requested to prepare another statement for the month of
December but he refused, as he was busy doing his chores.

A committee was formed headed by the Shipmaster together with the other officers. Legahi remained
silent as he was informed of his offenses. Subsequently, he was informed that he was dismissed. Legahi
was repatriated the following day.

Legahi filed a complaint for illegal dismissal with the POEA against the NSM for illegal dismissal. He
sought the payment of his salary corresponding to the unexpired portion of his contract, unpaid overtime
pay, leave pay, salary differential, and damages.
POEA found just cause for Legahi’s dismissal. NLRC affirmed.

ISSUE/S:
(1) W/N Legahi’s dismissal was valid? NO
(2) W/N Legahi is entitled to overtime pay? NO – FOR THE OUTLINE

RULING:
(1) To constitute a valid dismissal from employment, two (2) requisites must concur: (a) the dismissal
must be for any of the causes provided in Article 282 of the Labor Code, and (b) the employee
must be accorded due process, the elements of which are notice and the opportunity to be heard
and to defend himself.

Procedural due process requires that the employee must be apprised of the charges against him.
He must be given reasonable time to answer the charges, allowed ample opportunity to be heard
and defend himself, and assisted by a representative if the employee so desires. Two written
notices are required before termination of employment can be legally effected. They are: (1)
notice which apprises the employee of the particular acts or omissions for which his dismissal is
sought, and (2) the subsequent notice which informs the employee of the employer's decision to
dismiss him; not to mention the opportunity to answer and rebut the charges against him, in
between such notices.

In the case at bar, the evidence on record belies private respondents' claim that petitioner was
 afforded due process. Petitioner was not given reasonable time to answer the charges hurled
against him or to defend himself. The notice apprising him of the charges and the notice of
dismissal were done in one morning. The submission that the entry in the logbook made on
January 6 which stated that for petitioner's refusal "to take orders from the master of the ship he
will be sent home in first possible port" was sufficient compliance of the first notice requirement is
not well-taken. This is not the kind of notice that satisfies due process contemplated by law. In
such a case where there is a failure to comply with the requirements of the law as to the notice
and hearing, the dismissal is certainly tainted with illegality.

For willful disobedience to be considered as just cause for dismissal, the employee's conduct
must be willful or intentional, the willfulness being characterized by a wrongful and perverse
attitude and the order violated must have been reasonable, lawful, made known to the employee
and must pertain to the duties which he has been engaged to discharge.

In the instant case, it was actually not petitioner's duty to prepare the victualling statement. The
allegation that this was part of his duty as chief cook and the fact that he was aware of such duty
when he was interviewed for the post is only self-serving and without basis. The employment
contract does not mention anything that this was part of his duty as chief cook.

(2) Petitioner's dismissal without a valid cause constitutes a breach of contract.

Consequently, he should only be paid the unexpired portion of his employment contract.

As to the payment of overtime pay, the Court held in several cases that the rendition of
overtime work and the submission of sufficient proof that said work was actually
performed are conditions to be satisfied before a seaman could be entitled to overtime pay
which should be computed on the basis of 30% of the basic monthly salary. In short, the
contract provision guarantees the right to overtime pay but the entitlement to such benefit
must first be established.

The Court resolved the question of overtime pay of workers aboard a vessel in National
Shipyards and Steel Co. v. NLRCviz: “the correct criterion in determining whether or not
sailors are entitled to overtime pay is not, therefore, whether they were on board and can
not leave ship beyond the regular eight working hours a day, but whether they actually
rendered service in excess of said number of hours.”

Thus, the claim for day's leave pay for the unexpired portion of the contract is
unwarranted since the same is given during the actual service of the seaman.

DISPOSITIVE: WHEREFORE, the petition is GRANTED. The decision of the NLRC is SET ASIDE.
Private respondent is hereby ORDERED to pay only the petitioner his salary equivalent to seven (7)
months corresponding to the unexpired portion of the contract plus attorney's fees of P10,000.00.

052 Pigcaulan vs. Security and Credit Investigation, Inc.

Doctrine/s:
(1) It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it
is on the employer that the burden of proving payment of these claims rests.
(2) Evidence/Required proof to prove overtime pay: Substantial Evidence.
(3) The handwritten itemized computations are self-serving, unreliable and unsubstantial evidence to
sustain the grant of salary differentials, particularly overtime pay.

Facts:
Oliver Canoy (Canoy) and AbduljuahidPigcaulan (Pigcaulan) were both employed by Security and Credit
Investigation, Inc (SCII) as security guards and were assigned to SCII’s different clients. Subsequently,
however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints for underpayment of
salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th month pays
which were later consolidated.

Canoy and Pigcaulan, in support of their claim, submitted their respective daily time records reflecting the
number of hours served and their wages for the same. They likewise presented itemized lists of their
claims for the corresponding periods served. On the other hand, SCII presented copies of payroll listings
and lists of employees for the periods to support its claim.

LA: awarded monetary claims (overtime pay, holiday pay, service incentive leave pay, and proportionate
13th month pay for the year 2000) to Canoy and Pigcaulan.
NLRC: dismissed the appeal, affirmed in toto the decision of the LA.
CA: set aside the decision of the NLRC and LA on the grounds that: (1) the decision of the LA did not
embody the detailed and full amount awarded; (2) the payrolls submitted by the SCII from 1998 to 1999
were signed by Canoy to support its claim contrary to the findings of the LA; (3) the LA did not state in his
decision the substance of the evidence adduced by Pigcaulan and Canoy as well as the laws or
jurisprudence that would show that the two are indeed entitled to the salary differential and incentive
leave pays; (4) LA erred in making Reyes, managing partner of SCII, liable together with SCII for the
payment of the monetary claims despite the absence of proof that Reyes deliberately or maliciously
designed to evade SCII’s alleged financial obligation.

NOTE: only Pigcaulan filed a petition for review on certiorari. Therefore, the CA decision as to Canoy is
deemed final and executory.

Issue: Whether Pigcaulan is entitled to overtime pay. NO.

Held: There was no substantial evidence to support the grant of overtime pay.

The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and
13th month pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on
the itemized computations they submitted which he considered as representative daily time
records to substantiate the award of salary differentials. The NLRC then sustained the award on the
ground that there was substantial evidence of underpayment of salaries and benefits.

However, the Court finds that both the Labor Arbiter and the NLRC erred in this regard. The handwritten
itemized computations are self-serving, unreliable and unsubstantial evidence to sustain the grant
of salary differentials, particularly overtime pay.Unsigned and unauthenticated as they are, there
is no way of verifying the truth of the handwritten entries stated therein. Written only in pieces of
paper and solely prepared by Canoy and Pigcaulan, these representative daily time records, as termed by
the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove that the
two were underpaid of their salaries. We find nothing in the records which could substantially support
Pigcaulan’s contention that he had rendered service beyond eight hours to entitle him to overtime pay and
during Sundays to entitle him to restday pay. Hence, in the absence of any concrete proof that
additional service beyond the normal working hours and days had indeed been rendered, we
cannot affirm the grant of overtime pay to Pigcaulan.
Other Notes:
(1) Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13th month pay
for year 2000.
(2) The CA erred in dismissing the claims instead of remanding the case to the Labor Arbiter for a
detailed computation of the judgment award.
(3) Consistent with the rule that all money claims arising from an employer-employee relationship
shall be filed within three years from the time the cause of action accrued, Pigcaulan can only
demand the amounts due him for the period within three years preceding the filing of the
complaint in 2000.

Dispositive Portion: WHEREFORE, the petition is GRANTED. The Decision dated February 24, 2006 and
Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 are REVERSED and
SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared entitled to holiday pay and service
incentive leave pay for the years 1997-2000 and proportionate 13th month pay for the year 2000.

The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and
to make a detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security
and Credit Investigation Inc. should pay without delay.
053 Association Of International Shipping Lines, Inc. vs. United Harbor Pilots' Association Of The
Philippines, Inc., Respondent.
G.R. No. 172029 August 6, 2008
TOPIC: Night work - rationale
FACTS:
1. Philippine Ports Authority (PPA) issued PPA Administrative Order (AO) No. 03-85 substantially
adopting the provisions of Customs Administrative Order (CAO) No. 15-65 4 on the payment of
additional charges for pilotage service 5 rendered "between 1800H to 1600H,(6PM-4PM, Hindi ko din
alam kung bakitganitopaurongataandar ng orasannung 1985)" or on "Sundays or Holidays," referring
to "nighttime and overtime pay."

a. responding to the clamor of harbor pilots for the increase and rationalization of pilotage
service charges, then President Ferdinand E. Marcos issued Executive Order (EO) No. 1088
providing for uniform and modified rates for pilotage services rendered in all Philippine ports.
It fixed the rate of pilotage fees on the basis of the "vessel's tonnage" and provided that the
"rate for docking and undocking anchorage, conduction and shifting and other related special
services is equal to 100%."
2. PPA issued several resolutions disallowing overtime premium or charge and recalling its
recommendation for a reasonable night premium pay or night differential pay
3. Association of International Shipping Lines (AISL) and its members refused to pay respondent United
Harbor Pilots' Association of the Philippines, Inc. (UHPAP)'s claims for nighttime and overtime
pay.UHPAP threatened to discontinue pilotage services should their claims be continually ignored. 11
4. Petitioners then filed a petition for declaratory relief with the RTC, (1) whether EO No. 1088
authorized the payment of nighttime and overtime pay; and (2) whether the rate of pilotage fees
enumerated in EO No. 1088 were for "every pilotage maneuver" or for the "entire package of pilotage
services."
5. RTC granted the petition and declared that respondent UHPAP is not authorized to collect any
overtime or night shift differential for pilotage services rendered.
6. Respondent UHPAP moved for reconsideration but the motion was denied.
7. UHPAP filed directly before this Court a petition for review on certiorari
8. Court granted the petition and reversed the RTC.
9. The decision became final and executory on February 14, 2003.
10. UHPAP filed a motion for the issuance of a writ of execution with the RTC. 14 Petitioners opposed15 the
motion.
11. RTC issued an Order16 denying respondent UHPAP's motion and declaring that "pursuant to the
decision of the Supreme Court in G.R. No. 133763, PPA Resolution Nos. 1486, 1541, and 1554 are
valid and effective thereby disallowing the collection of overtime pay."
12. UHPAP then filed a petition for certiorari under Rule 65 with the CA

CA partly granted respondent's petition in that it affirmed the denial of the motion for the issuance of a writ
of execution while, at the same time, deleting portions of the challenged Order.

ISSUE(S): WON the pilots are entitled to nightshift differential

HELD: YES.
RATIO:
it should be stressed that the PPA issued the subject resolutions - which disallowed overtime pay and
recalled PPA's recommendation for nighttime pay to harbor pilots - pursuant to Section 3 of EO No. 1088
stating that "all orders, letters of instruction, rules, regulations and issuances inconsistent with it are
repealed or amended accordingly." The PPA, just like petitioners, 30 was of the belief that there was an
actual inconsistency or an irreconcilable conflict between EO No. 1088 and the provisions of PPA AO No.
03-85 on nighttime and overtime pay, resulting in the implied repeal of the latter. 31

But, as this Court pronounced in G.R. No. 133763, there is nothing in EO No. 1088 that reveals any
intention on the part of Former President Marcos to amend or supersede the provisions of PPA AO No.
03-85 on nighttime and overtime pay. While Section 3 of EO No. 1088 provides a general repealing
clause, the same is made dependent upon its actual inconsistency with other previous orders, rules,
regulations or other issuance.

There is no inconsistency between EO No. 1088 and the provisions of PPA AO No. 03-85. These two
orders dwell on entirely different subject matters. EO No. 1088 provides for uniform and modified rates for
pilotage services rendered to foreign and coastwise vessels in all Philippine ports, public or private. On
the other hand, the subject matter of the provisions of PPA AO No. 03-85 is the payment of the additional
charges of nighttime and overtime pay. Plainly, EO No. 1088 involves the basic compensation for pilotage
service while PPA AO No. 03-85 provides for the additional charges where pilotage service is rendered
under certain circumstances.

Obviously, this Court's ruling in G.R. No. 133763 was that EO No. 1088 did not repeal the provisions of
PPA AO No. 03-85 on nighttime and overtime pay as there was no inconsistency between the two orders.
The ruling rendered "without legal effect" PPA Resolution Nos. 1486, 1541, and 1554, which were all
issued by PPA pursuant to Section 3 of EO No. 1088. Upon the other hand, the validity of the earlier PPA
AO No. 03-85, which allowed nighttime and overtime pay to harbor pilots, was affirmed.

Members of respondent UHPAP are entitled to nighttime and overtime pay.

It bears pointing out that additional compensation for nighttime work is founded on public policy. 32
Working at night is violative of the law of nature for it is the period for rest and sleep. An employee who
works at night has less stamina and vigor. Thus, he can easily contract disease. The lack of sunlight
tends to produce anemia and tuberculosis and predispose him to other ills. Night work brings increased
liability to eyestrain and accident. Serious moral dangers also are likely to result from the necessity of
traveling the street alone at night, and from the interference with normal home life. 33 Hygienic, medical,
moral, cultural and socio-biological reasons are in accord that night work has many inconveniences and
when there is no alternative but to perform it, it is but just that the laborer should earn greater salary than
ordinary work so as to compensate the laborer to some extent for the said inconveniences. 34

Philippine National Bank v. Philippine National Bank Employees Association (PEMA):35

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

Overtime work is actually the lengthening of hours developed to the interests of the employer and
the requirements of his enterprise. It follows that the wage or salary to be received must likewise
be increased, and more than that, a special additional amount must be added to serve either as
encouragement or inducement or to make up for the things he loses which we have already
referred to. And on this score, it must always be borne in mind that wage is indisputably intended
as payment for work done or services rendered.

WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED. Costs against petitioners.
Dacutvs CA

DOCTRINE:
The correct criterion in determining whether they are entitled to overtime pay or night shift differential is
not whether they were on board and cannot leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said number of hours.

FACTS:
Petitioners Lazaro V. Dacut, Cesario G. Cajote, Romerlo F. Tungala, Lowel Z. Zubista, and Orlando P.
Taboy were crew members of the LCT "BASILISA", an inter-island cargo vessel owned by private
respondent Sta. Clara International Transport and Equipment Corporation.

Dacut and Tungala: Resigned because the vessel became unseaworthy and the employer refused to
repair it properly; Cajote: Incurred several unauthorized absences, resigned for fear of being charged with
Absence without Leave (AWOL).

September 22, 1999, petitioners filed a complaint7 for constructive dismissal amounting to illegal
dismissal (except for Zubista and Taboy); underpayment of wages, special and regular holidays; non-
payment of rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed
overtime pay; actual, moral and exemplary damages; and litigation costs and attorney’s fees. They all
claimed that the Personnel Manager told them to submit resignation so they’ll be given separation pay.

After LA submitted the complaint for decision, the company filed its reply.

LA: Dismissed the complaint for constructive dismissal amounting to illegal dismissal. Vessel seaworthy
and Cajote incurred excessive unauthorized absences. HOWEVER, awarded holiday pay, sick/vacation
leave and wage differential.
NLRC: Affirmed LA. Clarified that although the Labor Arbiter has declared the case submitted for
decision, the Labor Arbiter may still entertain the company’s reply in order to ascertain the facts of the
case.
CA: Affirmed NLRC

ISSUE:
(1) Whether the Labor Arbiter erred in admitting the company’s reply after the case had been submitted
for decision - NO
(2) Whether Dacut, Tungala and Cajote voluntarily resigned from their employment - YES
(3) Whether petitioners were entitled to their monetary claims – YES based on the LA’s decision, other
money claims were not granted

HELD:
(1) No. Well-settled is the rule that technical rules of procedure are not binding in labor cases.12 In
fact, it is the spirit and intention of the Labor Code that labor officials shall use all reasonable
means to ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure.
(2) They voluntarily resigned from the company. Lower courts unanimously found that the primary
reason is the alleged unseaworthiness and not any harassment by the company. As to Cajote, his
claim that he was promised with separation pay deserves scant consideration. The only reason
why he resigned was his numerous unauthorized absences.
(3) There is insufficient evidence to prove petitioners’ entitlement thereto. As crew members,
petitioners were required to stay on board the vessel by the very nature of their duties, and it is
for this reason that, in addition to their regular compensation, they are given free living quarters
and subsistence allowances when required to be on board. It could not have been the purpose of
our law to require their employers to give them overtime pay or night shift differential, even when
they are not actually working. Thus, the correct criterion in determining whether they are entitled
to overtime pay or night shift differential is not whether they were on board and cannot leave ship
beyond the regular eight working hours a day, but whether they actually rendered service in
excess of said number of hours. In this case, petitioners failed to submit sufficient proof that
overtime and night shift work were actually performed to entitle them to the corresponding pay.