DEL MONTE LAND TRANSPORT BUS CO. VS.

the Department of Labor and Employment

ARMENTA regardless of the amount of the award claimed
for provided there exists employer-employee
Bus drivers and conductors filed a complaint relationship.
against Del Monte Land Transport Bus, Co., Inc.
for labor standard violations and inadequate The Court noted certain views espousing the
wages. Del Monte Land Transport argued that its proposition that the mode and fora by which the
salaries and benefits were compliant with the action has been initiated should determine
law and questioned the jurisdiction of the Labor jurisdiction. However, the Court clarified that
Arbiter, claiming the Department of Labor and this had been settled in People’s Broadcasting
Employment had jurisdiction. The drivers and Service v. Secretary of the Department of Labor
conductors argued that: and Employment which summed up the rules
 Their money claims fell within the cases governing jurisdiction on labor standards claims,
covered by Article 217 of the Labor Code of as follows:
the Philippines as it exceeded the aggregate
amount of five thousand pesos. Hence, the  If the claim involves labor standards benefits
authority to hear and decide said cases is mandated by the Labor Code or other labor
vested on the Office of the Labor Arbiter, to legislation regardless of the amount prayed
the exclusion of all other courts or quasi- for and provided that there is an existing
judicial bodies or tribunals; employer-employee relationship, jurisdiction
 No complaint was filed before the is with the Department of Labor and
Department of Labor and Employment for Employment regardless of whether the
the latter to exercise its jurisdiction over action was brought about by the filing of a
their claim. complaint or not; and
 Neither was there any inspection conducted
at Del Monte Land Transport as the Labor  If the claim involves labor standards benefits
Standards Compliance Certificates in mandated by the Labor Code or other labor
question were issued for the alleged legislation regardless of the amount prayed
compliance of Del Monte Motor Works, a for and there is no existing employer-
separate and distinct corporation. employee relationship or the claim is coupled
 In issuing the Labor Standards Compliance with a prayer for reinstatement, jurisdiction
Certificates, the Department of Labor and is with the Office of the Labor
Employment exercised its visitorial and Arbiter/National Labor Relations
compliance powers under Article 128 (b) and Commission.
not its enforcement and adjudicatory powers
under Article 129 of the Labor Code.
Autobus Transport System vs. Bautista
Issue: Whether the Office of the Labor Arbiter G.R. No. 156364, May 16, 2005
has jurisdiction over the claims of the bus drivers
and conductors. FACTS: Respondent Antonio Bautista has been
employed by petitioner Auto Bus Transport
Held: No. The SC held that the Labor Arbiter did Systems, Inc., since May 1995, as driver-
not have jurisdiction over the claims because DO
conductor with travel routes Manila-Tuguegarao
No. 118-12 clearly conferred jurisdiction with
the Regional Office the claims of the bus drivers via Baguio, Baguio-Tuguegarao via Manila and
and conductors. Manila-Tabuk via Baguio. Respondent was paid
on commission basis, seven percent (7%) of the
The Court stressed that jurisdiction over the total gross income per travel, on a twice a month
subject matter or authority to try a certain case basis.
is conferred by law and not by the whims,
consent or acquiescence of the interested parties Antonio Bautista, a driver-conductor for Auto
nor by the erroneous belief of the court or
Bus Transport Systems, Inc. since 1995, was paid
tribunal that it exists. It should be exercised
precisely by the person in authority or body in on commission basis, seven percent (7%) of the
whose hands it has been placed by the law; total gross income per travel, on a twice a month
otherwise, acts of the court or tribunal shall be basis. In 2000, while driving, he had an accident
void and with no legal consequence. and was later terminated for failure to pay for
damages. He filed a complaint for illegal
The Court stated that Article 128 of the Labor dismissal and money claims, which the Labor
Code of the Philippines speaks of the jurisdiction
Arbiter partially granted, ordering payment of
of the Secretary of Labor and his representatives
over labor standards violations based on 13th-month pay and service incentive leave pay.
findings made in the course of visitation and The NLRC upheld the service incentive leave pay
inspection of the business premises of an but removed the 13th-month pay award. The CA
employer. The Court emphasized that the affirmed the NLRC's decision.
authority under Article 128 may be exercised by
ISSUE: Whether or not respondent is entitled to he only has ten employees. The LA concluded
service incentive leave. that as Macasio was engaged on “pakyaw” or
task basis, he is not entitled to overtime, holiday,
HELD: Yes. SC held that a careful perusal of SIL and 13th month pay. The NLRC affirmed the
Article 95, LC and Book III, Rule V-IRR, LC will LA decision, thus this case reach the CA which
result in the conclusion that the grant of service says that Macasio is entitled to his monetary
incentive leave has been delimited by the claims following the doctrine laid down in
Implementing Rules and Regulations of the Serrano v. Severino Santos Transit. The CA
Labor Code to apply only to those employees not explained that as a task basis employee, Macasio
explicitly excluded by Section 1 of Rule V. is excluded from the coverage of holiday, SIL and
According to the Implementing Rules, Service 13th month pay only if he is likewise a “field
Incentive Leave shall not apply to employees personnel. Thus, this case reached the SC.
classified as "field personnel." The phrase "other
employees whose performance is unsupervised by ISSUE: Whether or not Macasio is entitled of
the employer" must not be understood as a overtime pay, holiday pay, 13th month pay and
separate classification of employees to which payment for service incentive leave.
service incentive leave shall not be granted.
Rather, it serves as an amplification of the HELD: Yes, in so far as the Holiday and SIL pay is
interpretation of the definition of field personnel concern. To determine whether workers
under the Labor Code as those "whose actual engaged on “pakyaw” or “task basis” is entitled
hours of work in the field cannot be determined to holiday and SIL pay, the presence (or absence)
with reasonable certainty. of employer supervision as regards the worker’s
time and performance is the key: if the worker is
The same is true with respect to the phrase simply engaged on pakyaw or task basis, then
"those who are engaged on task or contract basis, the general rule is that he is entitled to a holiday
purely commission basis." Said phrase should be pay and SIL pay unless exempted from the
related with "field personnel," applying the rule exceptions specifically provided under Article 94
on ejusdem generis that general and unlimited (holiday pay) and Article 95 (SIL pay) of the
terms are restrained and limited by the Labor Code. However, if the worker engaged on
particular terms that they follow. Hence, pakyaw or task basis also falls within the
employees engaged on task or contract basis or meaning of “field personnel” under the law, then
paid on purely commission basis are not he is not entitled to these monetary benefits.
automatically exempted from the grant of service
incentive leave, unless, they fall under the CA ruled that Macasio does not fall under the
classification of field personnel. definition of “field personnel.” The CA’s finding
in this regard is supported by the established
Petitioner’s contention that respondent is not facts of this case: first, Macasio regularly
entitled to the grant of service incentive leave performed his duties at David’s principal place of
just because he was paid on purely commission business; second, his actual hours of work could
basis is misplaced. What must be ascertained in be determined with reasonable certainty; and,
order to resolve the issue of propriety of the third, David supervised his time and
grant of service incentive leave to respondent is performance of duties. Since Macasio cannot be
whether or not he is a field personnel. considered a “field personnel,” then he is not
exempted from the grant of holiday, SIL pay even
Respondent is not a field personnel but a regular as he was engaged on “pakyaw” or task basis.
employee who performs tasks usually necessary
and desirable to the usual trade of petitioner’s However, the governing law on 13th month pay
business. Accordingly, respondent is entitled to is PD No. 851. As with holiday and SIL pay, 13th
the grant of service incentive leave. month pay benefits generally cover all
employees; an employee must be one of those
expressly enumerated to be exempted. Section 3
of the Rules and Regulations Implementing P.D.
David/Yiels Hog Dealer v. Macasio GR No. No. 851 enumerates the exemptions from the
195466, July 2, 2014 coverage of 13th month pay benefits. Under
Section 3(e), “employers of those who are paid
FACTS: In January 2009, Macasio filed before the on task basis, and those who are paid a fixed
LA a complaint against petitioner Ariel L. David, amount for performing a specific work,
doing business under the name and style “Yiels irrespective of the time consumed in the
Hog Dealer,” for non-payment of overtime pay, performance thereof are exempted.
holiday pay and 13th month pay. He also claimed
payment for moral and exemplary damages and Note that unlike the IRR of the Labor Code on
attorney’s fees. holiday and SIL pay, Section 3(e) of the Rules and
Regulations Implementing PD No. 851exempts
Macasio also claimed payment for service employees "paid on task basis" without any
incentive leave (SIL) David claimed that he reference to "field personnel." This could only
started his hog dealer business in 2005 and that mean that insofar as payment of the 13th month
pay is concerned, the law did not intend to 2. Whether or not the respondents are
qualify the exemption from its coverage with the entitled to 13th month pay, holiday and
requirement that the task worker be a "field Service Incentive pay.
personnel" at the same time.
HELD:

1. No. Under the law, only the value of the

facilities may be deducted from the
employees’ wages but not the value of
OUR HAUS REALTY DEVELOPMENT supplements. In the present case, the
CORPORATION vs. ALEXANDER PARIAN et al. board and lodging provided by Our Haus
cannot be categorized as facilities but as
FACTS: The respondents were all laborers supplements.
working for the petitioner, Our Haus Realty
Development Corporation, a company engaged The employer’s’ argument is a vain
in the construction business. Sometime in May attempt to circumvent the minimum wage
2010, Our Haus experienced financial distress. law by trying to create a distinction
To alleviate, petitioner suspended some of its where none exists. There is no substantial
construction projects and asked the affected distinction between deducting and
workers, including the respondents, to take charging a facility’s value from the
vacation leave. When respondents were asked to employee’s wage. Hence, the legal
report back to work, they instead filed with the requirements for creditability apply to
Labor Arbiter for underpayment of their daily both. These requirements are (a) proof
wages. They further alleged that Our Haus failed must be shown that such facilities are
to pay them their holiday, service incentive leave customarily furnished by the trade; (b)
(SIL), 13th month and overtime pay. the provision of deductible facilities must
be voluntarily accepted in writing by the
LA – ruled in favor of Our Haus ---- if the employee; and (c) the facilities must be
reasonable values of the board and lodging charged at fair and reasonable value.
would be taken into account, the respondents’
daily wages would meet the minimum wage rate. The SC further held that even if a benefit
As to the other benefits, the LA found that the is customarily provided by the trade, it
respondents were not able to substantiate their must still pass the purpose test set by
claims for it. jurisprudence. Under this test, if a benefit
or privilege granted to the employee is
NLRC - reversed the LA’s decision. The NLRC clearly for the employer’s convenience, it
noted that the respondents did not authorize Our will not be considered as a facility but a
Haus in writing to charge the values of their supplement. Here, careful consideration is
board and lodging to their wages. Thus, it cannot given to the nature of the employer’s
be credited. The NLRC also ruled that business in relation to the work
respondents are entitled 13th month payments performed by the employee. This test is
and SIL payments. However, it sustained the LA’s used to address inequitable situations
ruling that the respondents were not entitled to wherein employers consider a benefit
overtime pay since the exact dates and times deductible from the wages even if the
when they rendered overtime work had not been factual circumstances show that it clearly
proven. redounds to the employers’ greater
advantage.
CA - The CA affirmed in toto the NLRC’s rulings.
It found no real distinction between deduction 2. Yes. In labor cases, the burden of proving
and charging and ruled that the legal payment of monetary claims rests on the
requirements before any deduction or charging employer on the reasoning that the
can be made, apply to both. Our Haus, however, pertinent personnel files, payrolls,
failed to prove that it complied with any of the records, remittances and other similar
requirements laid down in Mabeza v. National documents — which will show that
Labor Relations Commission. Accordingly, it overtime, differentials, service incentive
cannot consider the values of its meal and leave and other claims of workers have
housing facilities in the computation of the been paid which are not in the possession
respondents’ total wages. of the worker but in the custody and
absolute control of the employer.
ISSUES:
Our Haus merely presented a hand-
1. Whether the facility’s value will be written certification from its
deducted or merely included in the administrative officer that its employees
computation of the wages. become entitled to 5 days service
incentive leave after they passed
probation period. The evidence adduced
 by Our Haus is not sufficient to prove LA - The labor arbiter credited Latag (P) with 37
actual payment of monetary claims. years of service for La Mallorca and R&E
Hence, respondents are entitled to 13th Transport.
month pay, holiday and Service Incentive
pay. NLRC- reversed and credited Latag with only 14
years of service at R&E Transport. However,
before the NLRC decision, Latag's widow
***** accepted a part of the retirement pay and signed
Supplement v. Facilities a quitclaim or waiver.
The benefit or privilege given to the
employee which constitutes an extra CA - Later on in an appeal, the appellate court
remuneration above and over his basic or upheld the finding of the labor arbiter because
ordinary earning or wage is supplement; petitioners’ appeal before the NLRC was not
and when said benefit or privilege is part accompanied by an appropriate cash or surety
of the laborers' basic wages, it is a bond, such appeal was not perfected.
facility.
ISSUE: Whether or not Pedro Latag is entitled to
If it is primarily for the employee’s gain, retirement benefit despite the signed quitclaim
then the benefit is a facility; if its and waiver by his wife.
provision is mainly for the employer’s
advantage, then it is a supplement. RULING: The Supreme Court ruled that the
respondent is entitled to retirement benefits
Purpose Test despite of the waiver of quitclaims.
If a benefit or privilege granted to the
employee is clearly for the employer’s As to the Quitclaim and Waiver signed by
convenience, it will not be considered as a Respondent Latag, the CA committed no error
facility but a supplement. Here, careful when it ruled that the document was invalid and
consideration is given to the nature of the could not bar her from demanding the benefits
employer’s business in relation to the legally due her husband. This is not to say that all
work performed by the employee. This quitclaims are invalid per se. Courts, however,
test is used to address inequitable are wary of schemes that frustrate workers'
situations wherein employers consider a rights and benefits, and look with disfavor upon
benefit deductible from the wages even if quitclaims and waivers that bargain these away.
the factual circumstances show that it
clearly redounds to the employers’ greater Pedro M. Latag was credited with 14 years of
advantage. service with R&E transport, Inc. Article 287 of
the Labor Code, as amended by Republic Act No.
7641, which provides:
R&E Transport vs. Latag
G.R. No. 155214, Feb. 13, 2004 Retirement. In the absence of retirement plan or
agreement providing for retirement benefits of
FACTS: Pedro Latag was a regular employee of employees in the establishments, an employee
La Mallorca Taxi since March 1, 1961. However, upon reaching the age of sixty years or more, but
he was transferred to the petitioner R & E not beyond sixty-five years which is hereby
Transport, Inc. upon cessation of La Mallorca’s declared as the compulsory age, who has served at
business operations. In January 1995, he got sick least five years in said establishment, may retire
and was forced to apply for partial disability and shall be entitled to retirement pay to at least
with the SSS, which was then granted. Upon one-half month salary for every year of service.
recovery, he reported back to work in September Unless the parties provide for broader inclusions,
1998 but was no longer allowed on account of the term one half month salary shall mean 15
his old age. Latag asked the petitioner, through days plus one twelfth of the 13-month pay and the
its administrative officer for his retirement pay cash equivalent of not more than 5 days of service
pursuant to Republic Act 7641 but he was incentive leaves.
ignored. Latag filed a case for payment of his
retirement pay before the NLRC. The rules implementing the new Retirement Law
similarly provide the above-mentioned formula
Upon Pedro Latag’s death on April 30, 1999, he for computing the one-half month salary.
was substituted by his wife, the respondent
Avelina Latag. Labor Arbiter rendered a decision Since Pedro was paid according to the
in favour of Latag. Petitioner filed the quitclaim "boundary" system, he is not entitled to the 13th
and motion to dismiss where the Labor Arbiter month and the service incentive pay; hence his
issued an order for Writ of Execution. Petitioners retirement pay should be computed on the sole
interposed an appeal before NLRC. Appeal was basis of his salary. It is accepted that taxi drivers
dismissed for failure to post a cash or surety do not receive fixed wages, but retain only those
bond, as mandated by law. sums in excess of the boundary or fee they pay to
the owners of their vehicles. It is accepted that
taxi drivers do not receive fixed wages, but governed by the contracts they sign every time
retain only those sums in excess of the they are rehired. Moreover, PD 851 does not
"boundary" or fee they pay to the owners or apply to seafarers since it only contemplates the
operators of their vehicles.34 Thus, the basis for situation of land-based workers and not of
computing their benefits should be the average seafarers who generally earn more than
daily income. In this case, the CA found that domestic land-based workers. The court
Pedro was earning an average of five hundred reinstate the decision of LA and REMAND the
pesos (₱500) per day. We thus compute his case to the Labor Arbiter to determine if Florello
retirement pay as follows: ₱500 x 15 days x 14 Tanchico has been paid his disability benefits for
years of service equals ₱105,000. Compared 18 days in accordance with his Contract of
with this amount, the ₱38,850 he received, Enlistment.
which represented just over one third of what
was legally due him, was unconscionable.

PETROLEUM SHIPPING LIMITED (formerly

ESSO INTERNATIONAL SHIPPING (BAHAMAS)
CO., LTD.) and TRANS-GLOBAL MARITIME
AGENCY, INC., Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION
and FLORELLO W. TANCHICO, Respondents.

FACTS: Florello W. Tanchico was hired by Esso

International Shipping Co., Ltd., through Trans-
Global Maritime Agency, Inc. as First Assistant
Engineer who was later promoted to Chief
Engineer. After completing his eight-month
deployment, Tanchico returned to
the Philippines for a two-month vacation. Upon
his return and prior to boarding the vessel,
medical examination revealed that Tanchico was
suffering from Ischemic Heart Disease,
Hypertensive Cardio- Muscular Disease and
Diabetes Mellitus. He took medications for two
months and was subsequently cleared. However,
Esso no longer deployed Tanchico and offered
to pay him benefits under the Career
Employment Incentive Plan instead. Tanchico
accepted the offer but later filed a complaint
for illegal dismissal with claims for 13th-month
pay among others.

LA- dismissed the complaint for lack of merit;

NLRC – affirmed in an appeal, on the ground
that complainant had been declared as one with
partial permanent disability. Thus, he should be
entitled to disability benefit.

CA - ruled that Tanchico was a regular employee

of Petroleum Shipping and held that petitioners
are not exempt from the coverage of P.D. 851
which mandates the payment of 13th month pay
to all employees.

ISSUE: Whether Tanchico is entitled to 13th

month pay, disability benefits and attorney’s
fees.

HELD: No. Tanchico is not entitled to 13th-month

pay. SC held that the CA erred in granting of 13 th-
month pay to Tanchico on the ground that he
was a regular employee. The Supreme Court
reiterated its ruling in Millares vs. NLRC which
held that seafarers are considered contractual
employees. Their employment, therefore, are