Minimum Labor Standard Benefits

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G.R. No. 119205 April 15, 1998

SIME DARBY PILIPINAS, INC.petitioner, vs. NATIONAL LABOR RELATIONSCOMMISSION (2ND DIVISION) and SIME DARBY SALARIED EMPLOYEESASSOCIATION (ALU-TUCP),respondents.

BELLOSILLO,J.:

Is the act of management in revising the work schedule of its employees and discarding their paid lunch break constitutiveof unfair labor practice?

Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotivetires, tubes and other rubber products. Sime Darby Salaried Employees Association(ALU-TUCP), private respondent, is an association of monthly salaried employees ofpetitioner at its Marikina factory. Prior to the present controversy, all company factory

workers in Marikina including members of private respondent union worked from 7 :45a .m. to 3 :45 p .m. with a 30-minute paid "on call" lunch break.

On 14 August 1992 petitioner issued a memorandum to all factory-based employeesadvising all its monthly salaried employees in its Marikina Tire Plant, except those inthe Warehouse and Quality Assurance Department working on shifts, a change in workschedule effective 14 September 1992 thus —

TO: ALL FACTORY-BASED EMPLOYEES

RE: NEW WORK SCHEDULEEffective Monday, September 14, 1992, the new work schedule of the factory office willbe as follows:

7:45 A.M. — 4:45 P.M. (Monday to Friday)

7:45 A.M. — 11:45 A.M. (Saturday).

Coffee break time will be ten minutes only anytime between:

9:30 A.M. — 10:30 A.M. and

2:30 P.M. — 3:30 P.M.

Lunch break will be between:

12:00 NN — 1:00 P.M. (Monday to Friday).

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. 1

Since private respondent felt affected adversely by the change in the work schedule anddiscontinuance of the 30-minute paid "on call" lunch break, it filed on behalf of its members acomplaint with the Labor Arbiter for unfair labor practice, discrimination and evasion of liabilitypursuant to the resolution of this Court in Sime Darby International Tire Co ., Inc . v . NLRC . 2

However, the Labor Arbiter dismissed the complaint on the ground that the change in the

work schedule and the elimination of the 30-minute paid lunch break of the factory workersconstituted a valid exercise of management prerogative and that the new work schedule,break time and one-hour lunch break did not have the effect of diminishing the benefitsgranted to factory workers as the working time did not exceed eight (8) hours.

The Labor Arbiter further held that the factory workers would be unjustly enriched ifthey continued to be paid during their lunch break even if they were no longer "on call"or required to work during the break. He also ruled that the decision in the earlier SimeDarby case 3 was not applicable to the instant case because the former involveddiscrimination of certain employees who were not paid for their 30-minute lunch break while

the rest of the factory workers were paid; hence, this Court ordered that the discriminatedemployees be similarly paid the additional compensation for their lunch break.

Private respondent appealed to respondent National Labor Relations Commission(NLRC) which sustained the Labor Arbiter and dismissed the appeal. 4 However, uponmotion for reconsideration by private respondent, the NLRC, this time with two (2) newcommissioners replacing those who earlier retired, reversed its earlier decision of 20 April1994 as well as the decision of the Labor Arbiter. 5 The NLRC considered the decision of thisCourt in the Sime Darby case of 1990 as the law of the case wherein petitioner was orderedto pay "the money value of these covered employees deprived of lunch and/or working time

breaks." The public respondent declared that the new work schedule deprived the employeesof the benefits of a time-honored company practice of providing its employees a 30-minutepaid lunch break resulting in an unjust diminution of company privileges prohibited by Art. 100of the Labor Code, as amended. Hence, this petition alleging that public respondentcommitted grave abuse of discretion amounting to lack or excess of jurisdiction: (a) in rulingthat petitioner committed unfair labor practice in the implementation of the change in the workschedule of its employees from 7:45 a.m. — 3:45 p.m. to 7:45 a.m. — 4:45 p.m. with one-hour lunch break from 12:00 nn to 1:00 p.m.; (b) in holding that there was diminution ofbenefits when the 30-minute paid lunch break was eliminated; (c) in failing to consider that inthe earlier Sime Darby case affirming the decision of the NLRC, petitioner was authorized todiscontinue the practice of having a 30-minute paid lunch break should it decide to do so;and, (d) in ignoring petitioner's inherent management prerogative of determining and fixingthe work schedule of its employees which is expressly recognized in the collective bargainingagreement between petitioner and private respondent.

The Office of the Solicitor General filed in a lieu of comment a manifestation andmotion recommending that the petitioner be granted, alleging that the 14 August 1992memorandum which contained the new work schedule was not discriminatory of theunion members nor did it constitute unfair labor practice on the part of petitioner.



We agree, hence, we sustain petitioner. The right to fix the work schedules of theemployees rests principally on their employer. In the instant case petitioner, as theemployer, cites as reason for the adjustment the efficient conduct of its businessoperations and its improved production. 6 It rationalizes that while the old work scheduleincluded a 30-minute paid lunch break, the employees could be called upon to do jobs duringthat period as they were "on call." Even if denominated as lunch break, this period could verywell be considered as working time because the factory employees were required to work if

necessary and were paid accordingly for working. With the new work schedule, theemployees are now given a one-hour lunch break without any interruption from theiremployer. For a full one-hour undisturbed lunch break, the employees can freely andeffectively use this hour not only for eating but also for their rest and comfort which areconducive to more efficiency and better performance in their work. Since the employees areno longer required to work during this one-hour lunch break, there is no more need for themto be compensated for this period. We agree with the Labor Arbiter that the new workschedule fully complies with the daily work period of eight (8) hours without violating the LaborCode. 7 Besides, the new schedule applies to all employees in the factory similarly situatedwhether they are union members or not. 8

Consequently, it was grave abuse of discretion for public respondent to equate the earlierSime Darby case 9 with the facts obtaining in this case. That ruling in the former case is notapplicable here. The issue in that case involved the matter of granting lunch breaks to certainemployees while depriving the other employees of such breaks. This Court affirmed in thatcase the NLRC's finding that such act of management was discriminatory and constitutedunfair labor practice.

The case before us does not pertain to any controversy involving discrimination ofemployees but only the issue of whether the change of work schedule, which

management deems necessary to increase production, constitutes unfair laborpractice. As shown by the records, the change effected by management with regard toworking time is made to apply to all factory employees engaged in the same line ofwork whether or not they are members of private respondent union. Hence, it cannotbe said that the new scheme adopted by management prejudices the right of privaterespondent to self-organization.

Every business enterprise endeavors to increase its profits. In the process, it maydevise means to attain that goal. Even as the law is solicitous of the welfare of theemployees, it must also protect the right of an employer to exercise what are clearlymanagement prerogatives. 10 Thus, management is free to regulate, according to its owndiscretion and judgment, all aspects of employment, including hiring, work assignments,working methods, time, place and manner of work, processes to be followed, supervision ofworkers, working regulations, transfer of employees, work supervision, lay off of workers anddiscipline, dismissal and recall of workers. 11 Further, management retains the prerogative,whenever exigencies of the service so require, to change the working hours of its employees.So long as such prerogative is exercised in good faith for the advancement of the employer'sinterest and not for the purpose of defeating or circumventing the rights of the employeesunder special laws or under valid agreements, this Court will uphold such exercise. 12



While the Constitution is committed to the policy of social justice and the protection of theworking class, it should not be supposed that every dispute will be automatically decided infavor of labor. Management also has rights which, as such, are entitled to respect andenforcement in the interest of simple fair play. Although this Court has inclined more oftenthan not toward the worker and has upheld his cause in his conflicts with the employer, suchfavoritism has not blinded the Court to the rule that justice is in every case for the deserving,to be dispensed in the light of the established facts and the applicable law and doctrine. 13

WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor RelationsCommission dated 29 November 1994 is SET ASIDE and the decision of the Labor Arbiterdated 26 November 1993 dismissing the complaint against petitioner for unfair labor practiceis AFFIRMED.

SO ORDERED.



G.R. No. 147420 June 10, 2004

CEZAR ODANGO in his behalf and in behalf of 32 complainants, petitioners,vs. NATIONAL LABOR RELATIONS COMMISSION and ANTIQUE ELECTRIC

COOPERATIVE, INC.,respondents.

D E C I S I O N

CARPIO, J.:

The Case

Before the Court is a petition for review 1 assailing the Court of Appeals’ Resolutions of27 September 2000 2 and 7 February 2001 in CA-G.R. SP No. 51519. The Court of

Appeals upheld the Decision 3 dated 27 November 1997 and the Resolution dated 30 April 1998 of the National Labor Relations Commission ("NLRC") in NLRC Case No. V-0048-97. The NLRC reversed the Labor Arbiter’s Decision of 29 November 1996,which found respondent Antique Electric Cooperative ("ANTECO") liable for petitioners’wage differentials amounting to P1,017,507.73 plus attorney’s fees of 10%.

Antecedent Facts

Petitioners are monthly-paid employees of ANTECO whose workdays are fromMonday to Friday and half of Saturday. After a routine inspection, the Regional Branchof the Department of Labor and Employment ("DOLE") found ANTECO liable forunderpayment of the monthly salaries of its employees. On 10 September 1989, theDOLE directed ANTECO to pay its employees wage differentials amounting toP1,427,412.75. ANTECO failed to pay.

Thus, on various dates in 1995, thirty-three (33) monthly-paid employees filedcomplaints with the NLRC Sub-Regional Branch VI, Iloilo City, praying for payment ofwage differentials, damages and attorney’s fees. Labor Arbiter Rodolfo G. Lagoc("Labor Arbiter") heard the consolidated complaints.

On 29 November 1996, the Labor Arbiter rendered a Decision in favor of petitionersgranting them wage differentials amounting to P1,017,507.73 and attorney’s fees of

10%. Florentino Tongson, whose case the Labor Arbiter dismissed, was the soleexception.

ANTECO appealed the Decision to the NLRC on 24 December 1996. On 27 November1997, the NLRC reversed the Labor Arbiter’s Decision. The NLRC denied petitioners’motion for reconsideration in its Resolution dated 30 April 1998. Petitioners thenelevated the case to this Court through a petition for certiorari, which the Courtdismissed for petitioners’ failure to comply with Section 11, Rule 13 of the Rules ofCourt. On petitioners’ motion for reconsideration, the Court on 13 January 1999 setaside the dismissal. Following the doctrine in St. Martin Funeral Home v. NLRC ,4 the



Court referred the case to the Court of Appeals.

On 27 September 2000, the Court of Appeals issued a Resolution dismissing thepetition for failure to comply with Section 3, Rule 46 of the Rules of Court. The Court of

Appeals explained that petitioners failed to allege the specific instances where theNLRC abused its discretion. The appellate court denied petitioners’ motion forreconsideration on 7 February 2001.

Hence, this petition.

The Labor Arbiter’s Ruling

The Labor Arbiter reasoned that ANTECO failed to refute petitioners’ argument thatmonthly-paid employees are considered paid for all the days in a month under Section2, Rule IV of Book 3 of the Implementing Rules of the Labor Code ("Section 2"). 5

Petitioners claim that this includes not only the 10 legal holidays, but also their un-worked half of Saturdays and all of Sundays.

The Labor Arbiter gave credence to petitioners’ arguments on the computation of theirwages based on the 304 divisor used by ANTECO in converting the leave credits of itsemployees. The Labor Arbiter agreed with petitioners that ANTECO’s use of 304 asdivisor is an admission that it is paying its employees for only 304 days a year insteadof the 365 days as specified in Section 2. The Labor Arbiter concluded that ANTECOowed its employees the wages for 61 days, the difference between 365 and 304, forevery year.

The NLRC’s Ruling

On appeal, the NLRC reversed the Labor Arbiter’s ruling that ANTECO underpaid itsemployees. The NLRC pointed out that the Labor Arbiter’s own computation showedthat the daily wage rates of ANTECO’s employees were above the minimum dailywage of P124. The lowest paid employee of ANTECO was then receiving a monthlywage of P3,788. The NLRC applied the formula in Section 2 [(Daily Wage Rate =(Wage x 12)/365)] to the monthly wage of P3,788 to arrive at a daily wage rate ofP124.54, an amount clearly above the minimum wage.

The NLRC noted that while the reasoning in the body of the Labor Arbiter’s decisionsupported the view that ANTECO did not underpay, the conclusion arrived at was theopposite. Finally, the NLRC ruled that the use of 304 as a divisor in converting leavecredits is more favorable to the employees since a lower divisor yields a higher rate ofpay.

The Ruling of the Court of Appeals

The Court of Appeals held that the petition was insufficient in form and substance sinceit "does not allege the essential requirements of the extra-ordinary special action of



certiorari." The Court of Appeals faulted petitioners for failing to recite "where and inwhat specific instance public respondent abused its discretion." The appellate courtcharacterized the allegations in the petition as "sweeping" and clearly falling short ofthe requirement of Section 3, Rule 46 of the Rules of Court.

The Issues

Petitioners raise the following issues:

I

WHETHER THE COURT OF APPEALS IS CORRECT IN DISMISSING THE CASE.

II WHETHER PETITIONERS ARE ENTITLED TO THEIR MONEY CLAIM. 6

The Ruling of the Court

The petition has no merit.

On the sufficiency of the petition

Petitioners argue that the Court of Appeals erred in dismissing their petition becausethis Court had already ruled that their petition is sufficient in form and substance. Theyargue that this precludes any judgment to the contrary by the Court of Appeals.Petitioners cite this Court’s Resolution dated 13 January 1999 as their basis. ThisResolution granted petitioners’ motion for reconsideration and set aside the dismissalof their petition for review.

Petitioners’ reliance on our 16 September 1998 Resolution is misplaced. In ourResolution, we dismissed petitioners’ case for failure to comply with Section 11, Rule13 of the Rules of Court. 7 The petition lacked a written explanation on why service wasmade through registered mail and not personally.

The error petitioners committed before the Court of Appeals is different. The appellatecourt dismissed their petition for failure to comply with the first paragraph of Section 3of Rule 46 8 in relation to Rule 65 of the Rules of Court, outlining the necessarycontents of a petition for certiorari. This is an entirely different ground. The previousdismissal was due to petitioners’ failure to explain why they resorted to service byregistered mail. This time the content of the petition itself is deficient. Petitioners failedto allege in their petition the specific instances where the actions of the NLRCamounted to grave abuse of discretion.

There is nothing in this Court’s Resolution dated 13 January 1999 that remotelysupports petitioners’ argument. What we resolved then was to reconsider the dismissalof the petition due to a procedural defect and to refer the case to the Court of Appealsfor its proper disposition. We did not in any way rule that the petition is sufficient in



form and substance.

Petitioners also argue that their petition is clear and specific in its allegation of graveabuse of discretion. They maintain that they have sufficiently complied with therequirement in Section 3, Rule 46 of the Rules of Court.

Again, petitioners are mistaken.

We quote the relevant part of their petition:

REASONS RELIED UPON FOR ALLOWANCE OF PETITION

12. This Honorable court can readily see from the facts and circumstances of this case,the petitioners were denied of their rights to be paid of 4 hours of each Saturday, 51rest days and 10 legal holidays of every year since they started working withrespondent ANTECO.

13. The respondent NLRC while with open eyes knew that the petitioners are entitledto salary differentials consisting of 4 hours pay on Saturdays, 51 rest days and 10 legalholidays plus 10% attorney’s fees as awarded by the Labor Arbiter in the above-mentioned decision, still contrary to law, contrary to existing jurisprudence issuedarbitrary, without jurisdiction and in excess of jurisdiction the decision vacating andsetting aside the said decision of the Labor Arbiter, to the irreparable damage andprejudice of the petitioners.

14. That the respondent NLRC in grave abuse of discretion in the exercise of itsfunction, by way of evasion of positive duty in accordance with existing labor laws,illegally refused to reconsider its decision dismissing the petitioners’ complaints.

15. That there is no appeal, nor plain, speedy and adequate remedy in law from theabove-mentioned decision and resolution of respondent NLRC except this petition forcertiorari. 9

These four paragraphs comprise the petitioners’ entire argument. In these fourparagraphs petitioners ask that a writ of certiorari be issued in their favor. We find thatthe Court of Appeals did not err in dismissing the petition outright. Section 3, Rule 46 of

the Rules of Court requires that a petition for certiorari must state the grounds relied onfor the relief sought. A simple perusal of the petition readily shows that petitionersfailed to meet this requirement.

The appellate court’s jurisdiction to review a decision of the NLRC in a petition forcertiorari is confined to issues of jurisdiction or grave abuse of discretion. 10 Anextraordinary remedy, a petition for certiorari is available only and restrictively in trulyexceptional cases. The sole office of the writ of certiorari is the correction of errors of

jurisdiction including the commission of grave abuse of discretion amounting to lack orexcess of jurisdiction. 11 It does not include correction of the NLRC’s evaluation of the



evidence or of its factual findings. Such findings are generally accorded not onlyrespect but also finality. 12 A party assailing such findings bears the burden of showingthat the tribunal acted capriciously and whimsically or in total disregard of evidencematerial to the controversy, in order that the extraordinary writ of certiorari will lie. 13

We agree with the Court of Appeals that nowhere in the petition is there anyacceptable demonstration that the NLRC acted either with grave abuse of discretion orwithout or in excess of its jurisdiction. Petitioners merely stated generalizations andconclusions of law. Rather than discussing how the NLRC acted capriciously,petitioners resorted to a litany of generalizations.

Petitions that fail to comply with procedural requisites, or are unintelligible or clearlywithout legal basis, deserve scant consideration. Section 6, Rule 65 of the Rules ofCourt requires that every petition be sufficient in form and substance before a courtmay take further action. Lacking such sufficiency, the court may dismiss the petitionoutright.

The insufficiency in substance of this petition provides enough reason to end ourdiscussion here. However, we shall discuss the issues raised not so much to addressthe merit of the petition, for there is none, but to illustrate the extent by whichpetitioners have haphazardly pursued their claim.

On the right of the petitioners to wage differentials

Petitioners claim that the Court of Appeals gravely erred in denying their claim forwage differentials. Petitioners base their claim on Section 2, Rule IV of Book III of the

Omnibus Rules Implementing the Labor Code. Petitioners argue that under thisprovision monthly-paid employees are considered paid for all days of the monthincluding un-worked days. Petitioners assert that they should be paid for all the 365days in a year. They argue that since in the computation of leave credits, ANTECOuses a divisor of 304, ANTECO is not paying them 61 days every year.

Petitioners’ claim is without basis

We have long ago declared void Section 2, Rule IV of Book III of the Omnibus RulesImplementing the Labor Code. In Insular Bank of Asia v. Inciong ,14 we ruled as

follows:

Section 2, Rule IV, Book III of the Implementing Rules and Policy Instructions No. 9issued by the Secretary (then Minister) of Labor are null and void since in the guise ofclarifying the Labor Code’s provisions on holiday pay, they in effect amended them byenlarging the scope of their exclusion.

The Labor Code is clear that monthly-paid employees are not excluded from thebenefits of holiday pay. However, the implementing rules on holiday pay promulgated



by the then Secretary of Labor excludes monthly-paid employees from the saidbenefits by inserting, under Rule IV, Book III of the implementing rules, Section 2 whichprovides that monthly-paid employees are presumed to be paid for all days in themonth whether worked or not.

Thus, Section 2 cannot serve as basis of any right or claim. Absent any other legalbasis, petitioners’ claim for wage differentials must fail.

Even assuming that Section 2, Rule IV of Book III is valid, petitioners’ claim will still fail.The basic rule in this jurisdiction is "no work, no pay." The right to be paid for un-worked days is generally limited to the ten legal holidays in a year. 15 Petitioners’ claimis based on a mistaken notion that Section 2, Rule IV of Book III gave rise to a right tobe paid for un-worked days beyond the ten legal holidays. In effect, petitioners demandthat ANTECO should pay them on Sundays, the un-worked half of Saturdays and otherdays that they do not work at all. Petitioners’ line of reasoning is not only a violation ofthe "no work, no pay" principle, it also gives rise to an invidious classification, aviolation of the equal protection clause. Sustaining petitioners’ argument will makemonthly-paid employees a privileged class who are paid even if they do not work.

The use of a divisor less than 365 days cannot make ANTECO automatically liable forunderpayment. The facts show that petitioners are required to work only from Mondayto Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is theresult of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Anydivisor below 287 days means that ANTECO’s workers are deprived of their holidaypay for some or all of the ten legal holidays. The 304 days divisor used by ANTECO isclearly above the minimum of 287 days.

Finally, petitioners cite Chartered Bank Employees Association v. Ople 16 as ananalogous situation. Petitioners have misread this case.

In Chartered Bank , the workers sought payment for un-worked legal holidays as a rightguaranteed by a valid law. In this case, petitioners seek payment of wages for un-worked non-legal holidays citing as basis a void implementing rule. The circumstancesare also markedly different. In Chartered Bank, there was a collective bargainingagreement that prescribed the divisor. No CBA exists in this case. In Chartered Bank ,the employer was liable for underpayment because the divisor it used was 251 days, afigure that clearly fails to account for the ten legal holidays the law requires to be paid.Here, the divisor ANTECO uses is 304 days. This figure does not deprive petitioners oftheir right to be paid on legal holidays.

A final note. ANTECO’s defense is likewise based on Section 2, Rule IV of Book III ofthe Omnibus Rules Implementing the Labor Code although ANTECO’s interpretation ofthis provision is opposite that of petitioners. It is deplorable that both parties premisedtheir arguments on an implementing rule that the Court had declared void twenty yearsago in Insular Bank. This case is cited prominently in basic commentaries. 17 And yet,



counsel for both parties failed to consider this. This does not speak well of the qualityof representation they rendered to their clients. This controversy should have endedlong ago had either counsel first checked the validity of the implementing rule on whichthey based their contentions.

WHEREFORE, the petition is DENIED. The Resoution of the Court of AppealsDISMISSING CA-G.R. SP No. 51519 is AFFIRMED.

SO ORDERED.



G.R. No. 151309 October 15, 2008

BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as UnionPresident, JOSELITO LARIÑO, VIVENCIO B. BARTE, SATURNINO EGERA andSIMPLICIO AYA-AY, petitioners, vs. NATIONAL LABOR RELATIONSCOMMISSION, TRYCO PHARMA CORPORATION, and/or WILFREDO C. RIVERA respondents.

D E C I S I O N

NACHURA,J. :

This petition seeks a review of the Decision 1 of the Court of Appeals (CA) dated July24, 2001 and Resolution dated December 20, 2001, which affirmed the finding of theNational Labor Relations Commission (NLRC) that the petitioners' transfer to anotherworkplace did not amount to a constructive dismissal and an unfair labor practice.

The pertinent factual antecedents are as follows:

Tryco Pharma Corporation (Tryco) is a manufacturer of veterinary medicines and itsprincipal office is located in Caloocan City. Petitioners Joselito Lariño, Vivencio Barte,Saturnino Egera and Simplicio Aya-ay are its regular employees, occupying thepositions of helper, shipment helper and factory workers, respectively, assigned to theProduction Department. They are members of Bisig Manggagawa sa Tryco (BMT), theexclusive bargaining representative of the rank-and-file employees.

Tryco and the petitioners signed separate Memorand[a] of Agreement 2 (MOA),providing for a compressed workweek schedule to be implemented in the companyeffective May 20, 1996. The MOA was entered into pursuant to Department of Laborand Employment Department Order (D.O.) No. 21, Series of 1990, Guidelines on theImplementation of Compressed Workweek . As provided in the MOA, 8:00 a.m. to 6:12p.m., from Monday to Friday, shall be considered as the regular working hours, and noovertime pay shall be due and payable to the employee for work rendered during thosehours. The MOA specifically stated that the employee waives the right to claimovertime pay for work rendered after 5:00 p.m. until 6:12 p.m. from Monday to Fridayconsidering that the compressed workweek schedule is adopted in lieu of the regular

workweek schedule which also consists of 46 hours. However, should an employee bepermitted or required to work beyond 6:12 p.m., such employee shall be entitled toovertime pay.

Tryco informed the Bureau of Working Conditions of the Department of Labor andEmployment of the implementation of a compressed workweek in the company. 3

In January 1997, BMT and Tryco negotiated for the renewal of their collectivebargaining agreement (CBA) but failed to arrive at a new agreement.



Meantime, Tryco received the Letter dated March 26, 1997 from the Bureau of AnimalIndustry of the Department of Agriculture reminding it that its production should beconducted in San Rafael, Bulacan, not in Caloocan City:

MR. WILFREDO C. RIVERA President, Tryco Pharma Corporation San Rafael,Bulacan

Subject: LTO as VDAP Manufacturer at San Rafael, Bulacan

Dear Mr. Rivera:

This is to remind you that your License to Operate as Veterinary Drug and ProductManufacturer is addressed at San Rafael, Bulacan, and so, therefore, your productionshould be done at the above mentioned address only. Further, production of a drugincludes propagation, processing, compounding, finishing, filling, repacking, labeling,advertising, storage, distribution or sale of the veterinary drug product. In no instance,therefore, should any of the above be done at your business office at 117 M. PonceSt., EDSA, Caloocan City.

Please be guided accordingly.

Thank you.

Very truly yours,

(sgd.)

EDNA ZENAIDA V. VILLACORTE, D.V.M. Chief, Animal Feeds Standard Division 4

Accordingly, Tryco issued a Memorandum 5 dated April 7, 1997 which directedpetitioner Aya-ay to report to the company's plant site in Bulacan. When petitioner Aya-ay refused to obey, Tryco reiterated the order on April 18, 1997. 6 Subsequently,through a Memorandum 7 dated May 9, 1997, Tryco also directed petitioners Egera,Lariño and Barte to report to the company's plant site in Bulacan.

BMT opposed the transfer of its members to San Rafael, Bulacan, contending that itconstitutes unfair labor practice. In protest, BMT declared a strike on May 26, 1997.

In August 1997, petitioners filed their separate complaints 8 for illegal dismissal,underpayment of wages, nonpayment of overtime pay and service incentive leave, andrefusal to bargain against Tryco and its President, Wilfredo C. Rivera. In their PositionPaper, 9 petitioners alleged that the company acted in bad faith during the CBAnegotiations because it sent representatives without authority to bind the company,and this was the reason why the negotiations failed. They added that the managementtransferred petitioners Lariño, Barte, Egera and Aya-ay from Caloocan to San Rafael,Bulacan to paralyze the union. They prayed for the company to pay them their salaries



from May 26 to 31, 1997, service incentive leave, and overtime pay, and to implementWage Order No. 4.

In their defense, respondents averred that the petitioners were not dismissed but theyrefused to comply with the management's directive for them to report to the company'splant in San Rafael, Bulacan. They denied the allegation that they negotiated in badfaith, stating that, in fact, they sent the Executive Vice-President and Legal Counsel asthe company's representatives to the CBA negotiations. They claim that the failure toarrive at an agreement was due to the stubbornness of the union panel.

Respondents further averred that, long before the start of the negotiations, thecompany had already been planning to decongest the Caloocan office to comply withthe government policy to shift the concentration of manufacturing activities from themetropolis to the countryside. The decision to transfer the company's productionactivities to San Rafael, Bulacan was precipitated by the letter-reminder of the Bureauof Animal Industry.

On February 27, 1998, the Labor Arbiter dismissed the case for lack of merit. 10 TheLabor Arbiter held that the transfer of the petitioners would not paralyze or render theunion ineffective for the following reasons: (1) complainants are not members of thenegotiating panel; and (2) the transfer was made pursuant to the directive of theDepartment of Agriculture.

The Labor Arbiter also denied the money claims, ratiocinating that the nonpayment ofwages was justified because the petitioners did not render work from May 26 to 31,1997; overtime pay is not due because of the compressed workweek agreement

between the union and management; and service incentive leave pay cannot beclaimed by the complainants because they are already enjoying vacation leave withpay for at least five days. As for the claim of noncompliance with Wage Order No. 4,the Labor Arbiter held that the issue should be left to the grievance machinery orvoluntary arbitrator.

On October 29, 1999, the NLRC affirmed the Labor Arbiter's Decision, dismissing thecase, thus:

PREMISES CONSIDERED, the Decision of February 27, 1998 is hereby AFFIRMED

and complainants' appeal therefrom DISMISSED for lack of merit. ComplainantsJoselito Lariño, Vivencio Barte, Saturnino Egera and Simplicio Aya-ay are directed toreport to work at respondents' San Rafael Plant, Bulacan but without backwages.Respondents are directed to accept the complainants back to work.

SO ORDERED. 11

On December 22, 1999, the NLRC denied the petitioners' motion for reconsiderationfor lack of merit. 12



Left with no recourse, petitioners filed a petition for certiorari with the CA.

On July 24, 2001, the CA dismissed the petition for certiorari and ruled that the transferorder was a management prerogative not amounting to a constructive dismissal or anunfair labor practice. The CA further sustained the enforceability of the MOA,particularly the waiver of overtime pay in light of this Court's rulings upholding a waiverof benefits in exchange of other valuable privileges. The dispositive portion of the saidCA decision reads:

WHEREFORE, the instant petition is DISMISSED. The Decision of the Labor Arbiterdated February 27, 1998 and the Decision and Resolution of the NLRC promulgatedon October 29, 1999 and December 22, 1999, respectively, in NLRC-NCR Case Nos.08-05715-97, 08-06115-97 and 08-05920-97, are AFFIRMED.

SO ORDERED. 13

The CA denied the petitioners' motion for reconsideration on December 20, 2001. 14

Dissatisfied, petitioners filed this petition for review raising the following issues:

-A-

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE PATENTLYERRONEOUS RULING OF THE LABOR ARBITER AND THE COMMISSION THATTHERE WAS NO DISMISSAL, MUCH LESS ILLEGAL DISMISSAL, OF THEINDIVIDUAL PETITIONERS.

-B-

THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING AND CONCLUDINGTHAT PRIVATE RESPONDENTS COMMITTED ACTS OF UNFAIR LABORPRACTICE.

-C-

THE COURT OF APPEALS ERRED IN NOT FINDING AND CONCLUDING THATPETITIONERS ARE ENTITLED TO THEIR MONEY CLAIMS AND TO DAMAGES, ASWELL AS LITIGATION COSTS AND ATTORNEY'S FEES. 15


We have no reason to deviate from the well-entrenched rule that findings of fact oflabor officials, who are deemed to have acquired expertise in matters within theirrespective jurisdiction, are generally accorded not only respect but even finality, andbind us when supported by substantial evidence. 16 This is particularly true when thefindings of the Labor Arbiter, the NLRC and the CA are in absolute agreement. 17 In this



case, the Labor Arbiter, the NLRC, and the CA uniformly agreed that the petitionerswere not constructively dismissed and that the transfer orders did not amount to anunfair labor practice. But if only to disabuse the minds of the petitioners who havepersistently pursued this case on the mistaken belief that the labor tribunals and theappellate court committed grievous errors, this Court will go over the issues raised inthis petition.

Petitioners mainly contend that the transfer orders amount to a constructive dismissal.They maintain that the letter of the Bureau of Animal Industry is not credible because itis not authenticated; it is only a ploy, solicited by respondents to give them an excuseto effect a massive transfer of employees. They point out that the Caloocan City officeis still engaged in production activities until now and respondents even hired newemployees to replace them.

We do not agree.

We refuse to accept the petitioners' wild and reckless imputation that the Bureau of Animal Industry conspired with the respondents just to effect the transfer of thepetitioners. There is not an iota of proof to support this outlandish claim. Absent anyevidence, the allegation is not only highly irresponsible but is grossly unfair to thegovernment agency concerned. Even as this Court has given litigants and counsel arelatively wide latitude to present arguments in support of their cause, we will nottolerate outright misrepresentation or baseless accusation. Let this be fair warning tocounsel for the petitioners.

Furthermore, Tryco's decision to transfer its production activities to San Rafael,

Bulacan, regardless of whether it was made pursuant to the letter of the Bureau of Animal Industry, was within the scope of its inherent right to control and manage itsenterprise effectively. While the law is solicitous of the welfare of employees, it mustalso protect the right of an employer to exercise what are clearly managementprerogatives. The free will of management to conduct its own business affairs toachieve its purpose cannot be denied. 18

This prerogative extends to the management's right to regulate, according to its owndiscretion and judgment, all aspects of employment, including the freedom to transferand reassign employees according to the requirements of its business. 19

Management's prerogative of transferring and reassigning employees from one area ofoperation to another in order to meet the requirements of the business is, therefore,generally not constitutive of constructive dismissal. 20 Thus, the consequent transfer ofTryco's personnel, assigned to the Production Department was well within the scope ofits management prerogative.

When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee,and it does not involve a demotion in rank or diminution of salaries, benefits, and otherprivileges, the employee may not complain that it amounts to a constructive



dismissal. 21 However, the employer has the burden of proving that the transfer of anemployee is for valid and legitimate grounds. The employer must show that the transferis not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve ademotion in rank or a diminution of his salaries, privileges and other benefits. 22

Indisputably, in the instant case, the transfer orders do not entail a demotion in rank ordiminution of salaries, benefits and other privileges of the petitioners. Petitioners,therefore, anchor their objection solely on the ground that it would cause them greatinconvenience since they are all residents of Metro Manila and they would incuradditional expenses to travel daily from Manila to Bulacan.

The Court has previously declared that mere incidental inconvenience is not sufficientto warrant a claim of constructive dismissal. 23 Objection to a transfer that is groundedsolely upon the personal inconvenience or hardship that will be caused to theemployee by reason of the transfer is not a valid reason to disobey an order oftransfer. 24

Incidentally, petitioners cite Escobin v. NLRC 25 where the Court held that the transfer ofthe employees therein was unreasonable. However, the distance of the workplace towhich the employees were being transferred can hardly compare to that of the presentcase. In that case, the employees were being transferred from Basilan to Manila;hence, the Court noted that the transfer would have entailed the separation of theemployees from their families who were residing in Basilan and accrual of additionalexpenses for living accommodations in Manila. In contrast, the distance from Caloocanto San Rafael, Bulacan is not considerably great so as to compel petitioners to seekliving accommodations in the area and prevent them from commuting to Metro Manila

daily to be with their families.

Petitioners, however, went further and argued that the transfer orders amounted tounfair labor practice because it would paralyze and render the union ineffective.

To begin with, we cannot see how the mere transfer of its members can paralyze theunion. The union was not deprived of the membership of the petitioners whose workassignments were only transferred to another location.

More importantly, there was no showing or any indication that the transfer orders were

motivated by an intention to interfere with the petitioners' right to organize. Unfair laborpractice refers to acts that violate the workers' right to organize. With the exception of

Article 248(f) of the Labor Code of the Philippines, the prohibited acts are related to theworkers' right to self-organization and to the observance of a CBA. Without thatelement, the acts, no matter how unfair, are not unfair labor practices. 26

Finally, we do not agree with the petitioners' assertion that the MOA is not enforceableas it is contrary to law. The MOA is enforceable and binding against the petitioners.Where it is shown that the person making the waiver did so voluntarily, with full



understanding of what he was doing, and the consideration for the quitclaim is credibleand reasonable, the transaction must be recognized as a valid and bindingundertaking. 27

D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits thatthe employees will derive from the adoption of a compressed workweek scheme, thus:

The compressed workweek scheme was originally conceived for establishmentswishing to save on energy costs, promote greater work efficiency and lower the rate ofemployee absenteeism, among others. Workers favor the scheme considering that itwould mean savings on the increasing cost of transportation fares for at least one (1)day a week; savings on meal and snack expenses; longer weekends, or an additional52 off-days a year, that can be devoted to rest, leisure, family responsibilities, studiesand other personal matters, and that it will spare them for at least another day in aweek from certain inconveniences that are the normal incidents of employment, suchas commuting to and from the workplace, travel time spent, exposure to dust andmotor vehicle fumes, dressing up for work, etc. Thus, under this scheme, the generallyobserved workweek of six (6) days is shortened to five (5) days but prolonging theworking hours from Monday to Friday without the employer being obliged for payovertime premium compensation for work performed in excess of eight (8) hours onweekdays, in exchange for the benefits abovecited that will accrue to the employees.

Moreover, the adoption of a compressed workweek scheme in the company will helptemper any inconvenience that will be caused the petitioners by their transfer to afarther workplace.

Notably, the MOA complied with the following conditions set by the DOLE, under D.O.No. 21, to protect the interest of the employees in the implementation of a compressedworkweek scheme:

1. The employees voluntarily agree to work more than eight (8) hours a day the total ina week of which shall not exceed their normal weekly hours of work prior to adoption ofthe compressed workweek arrangement;

2. There will not be any diminution whatsoever in the weekly or monthly take-home payand fringe benefits of the employees;

3. If an employee is permitted or required to work in excess of his normal weekly hoursof work prior to the adoption of the compressed workweek scheme, all such excesshours shall be considered overtime work and shall be compensated in accordance withthe provisions of the Labor Code or applicable Collective Bargaining Agreement (CBA);

4. Appropriate waivers with respect to overtime premium pay for work performed inexcess of eight (8) hours a day may be devised by the parties to the agreement.



5. The effectivity and implementation of the new working time arrangement shall be byagreement of the parties.

PESALA v. NLRC ,28 cited by the petitioners, is not applicable to the present case. Inthat case, an employment contract provided that the workday consists of 12 hours andthe employee will be paid a fixed monthly salary rate that was above the legalminimum wage. However, unlike the present MOA which specifically states that theemployee waives his right to claim overtime pay for work rendered beyond eight hours,the employment contract in that case was silent on whether overtime pay was includedin the payment of the fixed monthly salary. This necessitated the interpretation by theCourt as to whether the fixed monthly rate provided under the employment contractincluded overtime pay. The Court noted that if the employee is paid only the minimumwage but with overtime pay, the amount is still greater than the fixed monthly rate asprovided in the employment contract. It, therefore, held that overtime pay was notincluded in the agreed fixed monthly rate.

Considering that the MOA clearly states that the employee waives the payment ofovertime pay in exchange of a five-day workweek, there is no room for interpretationand its terms should be implemented as they are written.

WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated July 24,2001 and Resolution dated December 20, 2001 are AFFIRMED.

SO ORDERED.



G.R. No. L-52415 October 23, 1984

INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION (IBAAEU),petitioner, vs. HON. AMADO G. INCIONG, Deputy Minister, Ministry of Labor andINSULAR BANK OF ASIA AND AMERICA,respondents.

Sisenando R. Villaluz, Jr. for petitioner.

Abdulmaid Kiram Muin colloborating counsel for petitioner.

The Solicitor General Caparas, Tabios, Ilagan Alcantara & Gatmaytan Law Office andSycip, Salazar, Feliciano & Hernandez Law Office for respondents.

MAKASIAR,J.: ñé+.£ªwph!1

This is a petition for certiorari to set aside the order dated November 10, 1979, ofrespondent Deputy Minister of Labor, Amado G. Inciong, in NLRC case No. RB-IV-1561-76 entitled "Insular Bank of Asia and America Employees' Union (complainant-appellee), vs. Insular Bank of Asia and America" (respondent-appellant), thedispositive portion of which reads as follows: têñ.£îhqwâ£

xxx xxx xxx

ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of theNational Labor Relations Commission dated 20 June 1978 be, as it is hereby, set asideand a new judgment. promulgated dismissing the instant case for lack of merit (p. 109rec.).

The antecedent facts culled from the records are as follows:

On June 20, 1975, petitioner filed a complaint against the respondent bank for thepayment of holiday pay before the then Department of Labor, National Labor RelationsCommission, Regional Office No. IV in Manila. Conciliation having failed, and upon therequest of both parties, the case was certified for arbitration on July 7, 1975 (p. 18,NLRC rec.

On August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in theabove-entitled case, granting petitioner's complaint for payment of holiday pay.Pertinent portions of the decision read: têñ.£îhqwâ£

xxx xxx xxx

The records disclosed that employees of respondent bank were not paid their wageson unworked regular holidays as mandated by the Code, particularly Article 208, to wit:têñ.£îhqwâ£



Art. 208. Right to holiday pay.

(a) Every worker shall be paid his regular daily wage during regular holidays, except inretail and service establishments regularly employing less than 10 workers.

(b) The term "holiday" as used in this chapter, shall include: New Year's Day, MaundyThursday, Good Friday, the ninth of April the first of May, the twelfth of June, the fourth

of July, the thirtieth of November, the twenty-fifth and the thirtieth of December and theday designated by law for holding a general election.

xxx xxx xxx

This conclusion is deduced from the fact that the daily rate of pay of the bankemployees was computed in the past with the unworked regular holidays as excludedfor purposes of determining the deductible amount for absences incurred Thus, if theemployer uses the factor 303 days as a divisor in determining the daily rate of monthlypaid employee, this gives rise to a presumption that the monthly rate does not includepayments for unworked regular holidays. The use of the factor 303 indicates thenumber of ordinary working days in a year (which normally has 365 calendar days),excluding the 52 Sundays and the 10 regular holidays. The use of 251 as a factor (365calendar days less 52 Saturdays, 52 Sundays, and 10 regular holidays) gives riselikewise to the same presumption that the unworked Saturdays, Sundays and regularholidays are unpaid. This being the case, it is not amiss to state with certainty that theinstant claim for wages on regular unworked holidays is found to be tenable andmeritorious.

WHEREFORE, judgment is hereby rendered:(a) xxx xxxx xxx

(b) Ordering respondent to pay wages to all its employees for all regular h(olidayssince November 1, 1974 (pp. 97-99, rec., underscoring supplied).

Respondent bank did not appeal from the said decision. Instead, it complied with theorder of Arbiter Ricarte T. Soriano by paying their holiday pay up to and includingJanuary, 1976.

On December 16, 1975, Presidential Decree No. 850 was promulgated amending,among others, the provisions of the Labor Code on the right to holiday pay to read asfollows: têñ.£îhqwâ£

Art. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wagesduring regular holidays, except in retail and service establishments regularly employingless than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee



shall be paid a compensation equivalent to twice his regular rate and

(c) As used in this Article, "holiday" includes New Year's Day, Maundy Thursday, GoodFriday, the ninth of April, the first of May, the twelfth of June, the fourth of July, thethirtieth of November, the twenty-fifth and the thirtieth of December, and the daydesignated by law for holding a general election.

Accordingly, on February 16, 1976, by authority of Article 5 of the same Code, theDepartment of Labor (now Ministry of Labor) promulgated the rules and regulations forthe implementation of holidays with pay. The controversial section thereof reads: têñ.£îhqwâ£

Sec. 2. Status of employees paid by the month. — Employees who are uniformly paidby the month, irrespective of the number of working days therein, with a salary of notless than the statutory or established minimum wage shall be presumed to be paid forall days in the month whether worked or not.

For this purpose, the monthly minimum wage shall not be less than the statutoryminimum wage multiplied by 365 days divided by twelve" (italics supplied).

On April 23, 1976, Policy Instruction No. 9 was issued by the then Secretary of Labor(now Minister) interpreting the above-quoted rule, pertinent portions of which read: têñ.£îhqwâ£

xxx xxx xxx

The ten (10) paid legal holidays law, to start with, is intended to benefit principally dailyemployees. In the case of monthly, only those whose monthly salary did not yet includepayment for the ten (10) paid legal holidays are entitled to the benefit.

Under the rules implementing P.D. 850, this policy has been fully clarified to eliminatecontroversies on the entitlement of monthly paid employees, The new determining ruleis this: If the monthly paid employee is receiving not less than P240, the maximummonthly minimum wage, and his monthly pay is uniform from January to December, heis presumed to be already paid the ten (10) paid legal holidays. However, if deductionsare made from his monthly salary on account of holidays in months where they occur,then he is still entitled to the ten (10) paid legal holidays. ..." (emphasis supplied).

Respondent bank, by reason of the ruling laid down by the aforecited ruleimplementing Article 94 of the Labor Code and by Policy Instruction No. 9, stopped thepayment of holiday pay to an its employees.

On August 30, 1976, petitioner filed a motion for a writ of execution to enforce thearbiter's decision of August 25, 1975, whereby the respondent bank was ordered topay its employees their daily wage for the unworked regular holidays.

On September 10, 1975, respondent bank filed an opposition to the motion for a writ ofexecution alleging, among others, that: (a) its refusal to pay the corresponding



unworked holiday pay in accordance with the award of Labor Arbiter Ricarte T. Sorianodated August 25, 1975, is based on and justified by Policy Instruction No. 9 whichinterpreted the rules implementing P. D. 850; and (b) that the said award is alreadyrepealed by P.D. 850 which took effect on December 16, 1975, and by said PolicyInstruction No. 9 of the Department of Labor, considering that its monthly paidemployees are not receiving less than P240.00 and their monthly pay is uniform fromJanuary to December, and that no deductions are made from the monthly salaries ofits employees on account of holidays in months where they occur (pp. 64-65, NLRCrec.).

On October 18, 1976, Labor Arbiter Ricarte T. Soriano, instead of issuing a writ ofexecution, issued an order enjoining the respondent bank to continue paying itsemployees their regular holiday pay on the following grounds: (a) that the judgment isalready final and the findings which is found in the body of the decision as well as thedispositive portion thereof is res judicata or is the law of the case between the parties;and (b) that since the decision had been partially implemented by the respondent bank,

appeal from the said decision is no longer available (pp. 100-103, rec.).On November 17, 1976, respondent bank appealed from the above-cited order ofLabor Arbiter Soriano to the National Labor Relations Commission, reiterating thereinits contentions averred in its opposition to the motion for writ of execution. Respondentbank further alleged for the first time that the questioned order is not supported byevidence insofar as it finds that respondent bank discontinued payment of holiday paybeginning January, 1976 (p. 84, NLRC rec.).

On June 20, 1978, the National Labor Relations Commission promulgated its

resolution en banc dismissing respondent bank's appeal, the dispositive portion ofwhich reads as follows: têñ.£îhqwâ£

In view of the foregoing, we hereby resolve to dismiss, as we hereby dismiss,respondent's appeal; to set aside Labor Arbiter Ricarte T. Soriano's order of 18October 1976 and, as prayed for by complainant, to order the issuance of the properwrit of execution (p. 244, NLRC rec.).

Copies of the above resolution were served on the petitioner only on February 9, 1979or almost eight. (8) months after it was promulgated, while copies were served on therespondent bank on February 13, 1979.

On February 21, 1979, respondent bank filed with the Office of the Minister of Labor amotion for reconsideration/appeal with urgent prayer to stay execution, alleging thereinthe following: (a) that there is prima facie evidence of grave abuse of discretion,amounting to lack of jurisdiction on the part of the National Labor RelationsCommission, in dismissing the respondent's appeal on pure technicalities withoutpassing upon the merits of the appeal and (b) that the resolution appealed from iscontrary to the law and jurisprudence (pp. 260-274, NLRC rec.).



On March 19, 1979, petitioner filed its opposition to the respondent bank's appeal andalleged the following grounds: (a) that the office of the Minister of Labor has no

jurisdiction to entertain the instant appeal pursuant to the provisions of P. D. 1391; (b)that the labor arbiter's decision being final, executory and unappealable, execution is amatter of right for the petitioner; and (c) that the decision of the labor arbiter dated

August 25, 1975 is supported by the law and the evidence in the case (p. 364, NLRCrec.).

On July 30, 1979, petitioner filed a second motion for execution pending appeal,praying that a writ of execution be issued by the National Labor Relations Commissionpending appeal of the case with the Office of the Minister of Labor. Respondent bankfiled its opposition thereto on August 8, 1979.

On August 13, 1979, the National Labor Relations Commission issued an order whichstates: têñ.£îhqwâ£

The Chief, Research and Information Division of this Commission is hereby directed todesignate a Socio-Economic Analyst to compute the holiday pay of the employees ofthe Insular Bank of Asia and America from April 1976 to the present, in accordancewith the Decision of the Labor Arbiter dated August 25, 1975" (p. 80, rec.).

On November 10, 1979, the Office of the Minister of Labor, through Deputy Minister Amado G. Inciong, issued an order, the dispositive portion of which states: têñ.£îhqwâ£

ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of theNational Labor Relations Commission dated 20 June 1978 be, as it is hereby, set aside

and a new judgment promulgated dismissing the instant case for lack of merit (p. 436,NLRC rec.).

Hence, this petition for certiorari charging public respondent Amado G. Inciong withabuse of discretion amounting to lack or excess of jurisdiction.

The issue in this case is: whether or not the decision of a Labor Arbiter awardingpayment of regular holiday pay can still be set aside on appeal by the Deputy Ministerof Labor even though it has already become final and had been partially executed, thefinality of which was affirmed by the National Labor Relations Commission sitting en

banc, on the basis of an Implementing Rule and Policy Instruction promulgated by theMinistry of Labor long after the said decision had become final and executory.

WE find for the petitioner.

I

WE agree with the petitioner's contention that Section 2, Rule IV, Book III of theimplementing rules and Policy Instruction No. 9 issued by the then Secretary of Laborare null and void since in the guise of clarifying the Labor Code's provisions on holiday



pay, they in effect amended them by enlarging the scope of their exclusion (p. 1 1,rec.).

Article 94 of the Labor Code, as amended by P.D. 850, provides: têñ.£îhqwâ£

Art. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wageduring regular holidays, except in retail and service establishments regularly employing

less than ten (10) workers. ...

The coverage and scope of exclusion of the Labor Code's holiday pay provisions isspelled out under Article 82 thereof which reads: têñ.£îhqwâ£

Art. 82. Coverage. — The provision of this Title shall apply to employees in allestablishments and undertakings, whether for profit or not, but not to governmentemployees, managerial employees, field personnel members of the family of theemployer who are dependent on him for support domestic helpers, persons in the

personal service of another, and workers who are paid by results as determined by theSecretary of Labor in appropriate regulations .

... (emphasis supplied).

From the above-cited provisions, it is clear that monthly paid employees are notexcluded from the benefits of holiday pay. However, the implementing rules on holidaypay promulgated by the then Secretary of Labor excludes monthly paid employeesfrom the said benefits by inserting, under Rule IV, Book Ill of the implementing rules,Section 2, which provides that: "employees who are uniformly paid by the month,irrespective of the number of working days therein, with a salary of not less than thestatutory or established minimum wage shall be presumed to be paid for all days in themonth whether worked or not. "

Public respondent maintains that "(T)he rules implementing P. D. 850 and PolicyInstruction No. 9 were issued to clarify the policy in the implementation of the ten (10)paid legal holidays. As interpreted, 'unworked' legal holidays are deemed paid insofaras monthly paid employees are concerned if (a) they are receiving not less than thestatutory minimum wage, (b) their monthly pay is uniform from January to December,and (c) no deduction is made from their monthly salary on account of holidays in

months where they occur. As explained in Policy Instruction No, 9, 'The ten (10) paidlegal holidays law, to start with, is intended to benefit principally daily paid employees.In case of monthly, only those whose monthly salary did not yet include payment forthe ten (10) paid legal holidays are entitled to the benefit' " (pp. 340-341, rec.). Thiscontention is untenable.

It is elementary in the rules of statutory construction that when the language of the lawis clear and unequivocal the law must be taken to mean exactly what it says. In thecase at bar, the provisions of the Labor Code on the entitlement to the benefits of



holiday pay are clear and explicit - it provides for both the coverage of and exclusionfrom the benefits. In Policy Instruction No. 9, the then Secretary of Labor went as far asto categorically state that the benefit is principally intended for daily paid employees,when the law clearly states that every worker shall be paid their regular holiday pay.This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code,which states that "All doubts in the implementation and interpretation of the provisionsof this Code, including its implementing rules and regulations, shall be resolved in favorof labor." Moreover, it shall always be presumed that the legislature intended to enact avalid and permanent statute which would have the most beneficial effect that itslanguage permits (Orlosky vs. Haskell, 155 A. 112.)

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authoritygranted by Article 5 of the Labor Code authorizing him to promulgate the necessaryimplementing rules and regulations.

Public respondent vehemently argues that the intent and spirit of the holiday pay law,as expressed by the Secretary of Labor in the case of Chartered Bank Employees

Association v. The Chartered Bank (NLRC Case No. RB-1789-75, March 24, 1976), isto correct the disadvantages inherent in the daily compensation system of employment— holiday pay is primarily intended to benefit the daily paid workers whoseemployment and income are circumscribed by the principle of "no work, no pay." Thisargument may sound meritorious; but, until the provisions of the Labor Code on holidaypay is amended by another law, monthly paid employees are definitely included in thebenefits of regular holiday pay. As earlier stated, the presumption is always in favor oflaw, negatively put, the Labor Code is always strictly construed against management.

While it is true that the contemporaneous construction placed upon a statute byexecutive officers whose duty is to enforce it should be given great weight by thecourts, still if such construction is so erroneous, as in the instant case, the same mustbe declared as null and void. It is the role of the Judiciary to refine and, whennecessary, correct constitutional (and/or statutory) interpretation, in the context of theinteractions of the three branches of the government, almost always in situationswhere some agency of the State has engaged in action that stems ultimately fromsome legitimate area of governmental power (The Supreme Court in Modern Role, C.B. Swisher 1958, p. 36).

Thus. in the case of Philippine Apparel Workers Union vs. National Labor RelationsCommission (106 SCRA 444, July 31, 1981) where the Secretary of Labor enlargedthe scope of exemption from the coverage of a Presidential Decree granting increasein emergency allowance, this Court ruled that: têñ.£îhqwâ£

... the Secretary of Labor has exceeded his authority when he included paragraph (k)in Section 1 of the Rules implementing P. D. 1 1 23.

xxx xxx xxx



Clearly, the inclusion of paragraph k contravenes the statutory authority granted to theSecretary of Labor, and the same is therefore void, as ruled by this Court in a long lineof cases . . . .. têñ.£îhqwâ£

The recognition of the power of administrative officials to promulgate rules in theadministration of the statute, necessarily limited to what is provided for in the legislativeenactment, may be found in the early case of United States vs. Barrios decided in1908. Then came in a 1914 decision, United States vs. Tupasi Molina (29 Phil. 119)delineation of the scope of such competence. Thus: "Of course the regulations adoptedunder legislative authority by a particular department must be in harmony with theprovisions of the law, and for the sole purpose of carrying into effect its generalprovisions. By such regulations, of course, the law itself cannot be extended. So long,however, as the regulations relate solely to carrying into effect the provisions of thelaw, they are valid." In 1936, in People vs. Santos, this Court expressed its disapprovalof an administrative order that would amount to an excess of the regulatory powervested in an administrative official We reaffirmed such a doctrine in a 1951 decision,

where we again made clear that where an administrative order betrays inconsistencyor repugnancy to the provisions of the Act, 'the mandate of the Act must prevail andmust be followed. Justice Barrera, speaking for the Court in Victorias Milling inc. vs.Social Security Commission , citing Parker as well as Davis did tersely sum up thematter thus: "A rule is binding on the Courts so long as the procedure fixed for itspromulgation is followed and its scope is within the statutory authority granted by thelegislature, even if the courts are not in agreement with the policy stated therein or itsinnate wisdom. ... On the other hand, administrative interpretation of the law is at bestmerely advisory, for it is the courts that finally determine chat the law means."

"It cannot be otherwise as the Constitution limits the authority of the President, inwhom all executive power resides, to take care that the laws be faithfully executed. Nolesser administrative executive office or agency then can, contrary to the expresslanguage of the Constitution assert for itself a more extensive prerogative. Necessarily,it is bound to observe the constitutional mandate. There must be strict compliance withthe legislative enactment. Its terms must be followed the statute requires adherence to,not departure from its provisions. No deviation is allowable. In the terse language ofthe present Chief Justice, an administrative agency "cannot amend an act ofCongress." Respondents can be sustained, therefore, only if it could be shown that therules and regulations promulgated by them were in accordance with what the VeteransBill of Rights provides" (Phil. Apparel Workers Union vs. National Labor RelationsCommission, supra, 463, 464, citing Teozon vs. Members of the Board of

Administrators, PVA 33 SCRA 585; see also Santos vs. Hon. Estenzo, et al, 109 Phil.419; Hilado vs. Collector of Internal Revenue, 100 Phil. 295; Sy Man vs. Jacinto &Fabros, 93 Phil. 1093; Olsen & Co., Inc. vs. Aldanese and Trinidad, 43 Phil. 259).

This ruling of the Court was recently reiterated in the case of American Wire & CableWorkers Union (TUPAS) vs. The National Labor Relations Commission and AmericanWire & Cable Co., Inc., G.R. No. 53337, promulgated on June 29, 1984.



In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement theLabor Code and Policy instruction No. 9 issued by the then Secretary of Labor must bedeclared null and void. Accordingly, public respondent Deputy Minister of Labor AmadoG. Inciong had no basis at all to deny the members of petitioner union their regularholiday pay as directed by the Labor Code.

II

It is not disputed that the decision of Labor Arbiter Ricarte T. Soriano dated August 25,1975, had already become final, and was, in fact, partially executed by the respondentbank.

However, public respondent maintains that on the authority of De Luna vs. Kayanan,61 SCRA 49, November 13, 1974, he can annul the final decision of Labor ArbiterSoriano since the ensuing promulgation of the integrated implementing rules of theLabor Code pursuant to P.D. 850 on February 16, 1976, and the issuance of PolicyInstruction No. 9 on April 23, 1976 by the then Secretary of Labor are facts andcircumstances that transpired subsequent to the promulgation of the decision of thelabor arbiter, which renders the execution of the said decision impossible and unjust onthe part of herein respondent bank (pp. 342-343, rec.).

This contention is untenable.

To start with, unlike the instant case, the case of De Luna relied upon by the publicrespondent is not a labor case wherein the express mandate of the Constitution on theprotection to labor is applied. Thus Article 4 of the Labor Code provides that, "All

doubts in the implementation and interpretation of the provisions of this Code, includingits implementing rules and regulations, shall be resolved in favor of labor and Article1702 of the Civil Code provides that, " In case of doubt, all labor legislation and alllabor contracts shall be construed in favor of the safety and decent living for thelaborer.

Consequently, contrary to public respondent's allegations, it is patently unjust todeprive the members of petitioner union of their vested right acquired by virtue of afinal judgment on the basis of a labor statute promulgated following the acquisition ofthe "right".

On the question of whether or not a law or statute can annul or modify a judicial orderissued prior to its promulgation, this Court, through Associate Justice Claro M. Recto,said: têñ.£îhqwâ£

xxx xxx xxx

We are decidedly of the opinion that they did not. Said order, being unappealable,became final on the date of its issuance and the parties who acquired rights thereunder



cannot be deprived thereof by a constitutional provision enacted or promulgatedsubsequent thereto. Neither the Constitution nor the statutes, except penal lawsfavorable to the accused, have retroactive effect in the sense of annulling or modifyingvested rights, or altering contractual obligations" (China Ins. & Surety Co. vs. Judge ofFirst Instance of Manila, 63 Phil. 324, emphasis supplied).

In the case of In re: Cunanan, et al., 19 Phil. 585, March 18, 1954, this Court said: "...when a court renders a decision or promulgates a resolution or order on the basis ofand in accordance with a certain law or rule then in force, the subsequent amendmentor even repeal of said law or rule may not affect the final decision, order, or resolutionalready promulgated, in the sense of revoking or rendering it void and of no effect."Thus, the amendatory rule (Rule IV, Book III of the Rules to Implement the LaborCode) cannot be given retroactive effect as to modify final judgments. Not even a lawcan validly annul final decisions (In re: Cunanan, et al., Ibid).

Furthermore, the facts of the case relied upon by the public respondent are notanalogous to that of the case at bar. The case of De Luna speaks of final andexecutory judgment, while iii the instant case, the final judgment is partially executed.

just as the court is ousted of its jurisdiction to annul or modify a judgment the moment itbecomes final, the court also loses its jurisdiction to annul or modify a writ of executionupon its service or execution; for, otherwise, we will have a situation wherein a finaland executed judgment can still be annulled or modified by the court upon mere motionof a panty This would certainly result in endless litigations thereby rendering inutile therule of law.

Respondent bank counters with the argument that its partial compliance was

involuntary because it did so under pain of levy and execution of its assets (p. 138,rec.). WE find no merit in this argument. Respondent bank clearly manifested itsvoluntariness in complying with the decision of the labor arbiter by not appealing to theNational Labor Relations Commission as provided for under the Labor Code under

Article 223. A party who waives his right to appeal is deemed to have accepted the judgment, adverse or not, as correct, especially if such party readily acquiesced in the judgment by starting to execute said judgment even before a writ of execution wasissued, as in this case. Under these circumstances, to permit a party to appeal fromthe said partially executed final judgment would make a mockery of the doctrine offinality of judgments long enshrined in this jurisdiction.

Section I of Rule 39 of the Revised Rules of Court provides that "... execution shallissue as a matter of right upon the expiration of the period to appeal ... or if no appealhas been duly perfected." This rule applies to decisions or orders of labor arbiters whoare exercising quasi-judicial functions since "... the rule of execution of judgmentsunder the rules should govern all kinds of execution of judgment, unless it is otherwiseprovided in other laws" Sagucio vs. Bulos 5 SCRA 803) and Article 223 of the LaborCode provides that "... decisions, awards, or orders of the Labor Arbiter or compulsoryarbitrators are final and executory unless appealed to the Commission by any or both



of the parties within ten (10) days from receipt of such awards, orders, or decisions. ..."

Thus, under the aforecited rule, the lapse of the appeal period deprives the courts of jurisdiction to alter the final judgment and the judgment becomes final ipso jure (Vegavs. WCC, 89 SCRA 143, citing Cruz vs. WCC, 2 PHILAJUR 436, 440, January 31,1978; see also Soliven vs. WCC, 77 SCRA 621; Carrero vs. WCC and Regala vs.WCC, decided jointly, 77 SCRA 297; Vitug vs. Republic, 75 SCRA 436; Ramos vs.Republic, 69 SCRA 576).

In Galvez vs. Philippine Long Distance Telephone Co., 3 SCRA 422, 423, October 31,1961, where the lower court modified a final order, this Court ruled thus: têñ.£îhqwâ£

xxx xxx xxx

The lower court was thus aware of the fact that it was thereby altering or modifying itsorder of January 8, 1959. Regardless of the excellence of the motive for acting as itdid, we are constrained to hold however, that the lower court had no authorities tomake said alteration or modification. ...

xxx xxx xxx

The equitable considerations that led the lower court to take the action complained ofcannot offset the dem ands of public policy and public interest — which are alsoresponsive to the tenets of equity — requiring that an issues passed upon in decisionsor final orders that have become executory, be deemed conclusively disposed of anddefinitely closed for, otherwise, there would be no end to litigations, thus setting atnaught the main role of courts of justice, which is to assist in the enforcement of therule of law and the maintenance of peace and order, by settling justiciablecontroversies with finality .

xxx xxx xxx

In the recent case of Gabaya vs. Mendoza , 113 SCRA 405, 406, March 30, 1982, thisCourt said: têñ.£îhqwâ£

xxx xxx xxx

In Marasigan vs. Ronquillo (94 Phil. 237), it was categorically stated that the rule isabsolute that after a judgment becomes final by the expiration of the period providedby the rules within which it so becomes, no further amendment or correction can bemade by the court except for clerical errors or mistakes. And such final judgment isconclusive not only as to every matter which was offered and received to sustain ordefeat the claim or demand but as to any other admissible matter which must havebeen offered for that purpose (L-7044, 96 Phil. 526). In the earlier case of Contrerasand Ginco vs. Felix and China Banking Corp., Inc. (44 O.G. 4306), it was stated thatthe rule must be adhered to regardless of any possible injustice in a particular case for



(W)e have to subordinate the equity of a particular situation to the over-mastering needof certainty and immutability of judicial pronouncements

xxx xxx xxx

III

The despotic manner by which public respondent Amado G. Inciong divested themembers of the petitioner union of their rights acquired by virtue of a final judgment istantamount to a deprivation of property without due process of law Public respondentcompletely ignored the rights of the petitioner union's members in dismissing theircomplaint since he knew for a fact that the judgment of the labor arbiter had longbecome final and was even partially executed by the respondent bank.

A final judgment vests in the prevailing party a right recognized and protected by lawunder the due process clause of the Constitution (China Ins. & Surety Co. vs. Judge ofFirst Instance of Manila, 63 Phil. 324). A final judgment is "a vested interest which it isright and equitable that the government should recognize and protect, and of which theindividual could no. be deprived arbitrarily without injustice" (Rookledge v. Garwood, 65N.W. 2d 785, 791).

lt is by this guiding principle that the due process clause is interpreted. Thus, in thepithy language of then Justice, later Chief Justice, Concepcion "... acts of Congress, aswell as those of the Executive, can deny due process only under pain of nullity, and

judicial proceedings suffering from the same flaw are subject to the same sanction, anystatutory provision to the contrary notwithstanding (Vda. de Cuaycong vs. Vda. de

Sengbengco 110 Phil. 118, emphasis supplied), And "(I)t has been likewiseestablished that a violation of a constitutional right divested the court of jurisdiction;and as a consequence its judgment is null and void and confers no rights" (Phil.Blooming Mills Employees Organization vs. Phil. Blooming Mills Co., Inc., 51 SCRA211, June 5, 1973).

Tested by and pitted against this broad concept of the constitutional guarantee of dueprocess, the action of public respondent Amado G. Inciong is a clear example ofdeprivation of property without due process of law and constituted grave abuse ofdiscretion, amounting to lack or excess of jurisdiction in issuing the order dated

November 10, 1979.

WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLICRESPONDENT IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTET. SORIANO DATED AUGUST 25, 1975, IS HEREBY REINSTATED.

COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA. SO ORDERED. 1



G.R. No. L-44717 August 28, 1985

THE CHARTERED BANK EMPLOYEES ASSOCIATION,petitioner, vs. HON. BLASF. OPLE, in his capacity as the Incumbent Secretary of Labor, and THECHARTERED BANK,respondents.

GUTIERREZ, JR., J.:

This is a petition for certiorari seeking to annul the decision of the respondentSecretary, now Minister of Labor which denied the petitioner's claim for holiday payand its claim for premium and overtime pay differentials. The petitioner claims that therespondent Minister of Labor acted contrary to law and jurisprudence and with graveabuse of discretion in promulgating Sec. 2, Rule IV, Book III of the Integrated Rulesand in issuing Policy Instruction No. 9, both referring to holidays with pay.

On May 20, 1975, the Chartered Bank Employees Association, in representation of itsmonthly paid employees/members, instituted a complaint with the Regional Office No.IV, Department of Labor, now Ministry of Labor and Employment (MOLE) againstprivate respondent Chartered Bank, for the payment of ten (10) unworked legalholidays, as well as for premium and overtime differentials for worked legal holidaysfrom November 1, 1974.

The memorandum for the respondents summarizes the admitted and/or undisputedfacts as follows:

l. The work force of respondent bank consists of 149 regular employees, all of whomare paid by the month;

2. Under their existing collective bargaining agreement, (Art. VII thereof) said monthlypaid employees are paid for overtime work as follows:

Section l. The basic work week for all employees excepting security guards who byvirtue of the nature of their work are required to be at their posts for 365 days per year,shall be forty (40) hours based on five (5) eight (8) hours days, Monday to Friday.

Section 2. Time and a quarter hourly rate shall be paid for authorized work performedin excess of eight (8) hours from Monday through Friday and for any hour of workperformed on Saturdays subject to Section 5 hereof.

Section 3. Time and a half hourly rate shall be paid for authorized work performed onSundays, legal and special holidays.

xxx xxx xxx



xxx xxx xxx

Section 5. The provisions of Section I above notwithstanding the BANK may revert tothe six (6) days work week, to include Saturday for a four (4) hour day, in the event theCentral Bank should require commercial banks to open for business on Saturday.

3. In computing overtime pay and premium pay for work done during regular holidays,

the divisor used in arriving at the daily rate of pay is 251 days although formerly thedivisor used was 303 days and this was when the respondent bank was still operatingon a 6-day work week basis. However, for purposes of computing deductionscorresponding to absences without pay the divisor used is 365 days.

4. All regular monthly paid employees of respondent bank are receiving salaries waybeyond the statutory or minimum rates and are among the highest paid employees inthe banking industry.

5. The salaries of respondent bank's monthly paid employees suffer no deduction forholidays occurring within the month.

On the bases of the foregoing facts, both the arbitrator and the National LaborRelations Commission (NLRC) ruled in favor of the petitioners ordering the respondentbank to pay its monthly paid employees, holiday pay for the ten (10) legal holidayseffective November 1, 1974 and to pay premium or overtime pay differentials to allemployees who rendered work during said legal holidays. On appeal, the Minister ofLabor set aside the decision of the NLRC and dismissed the petitioner's claim for lackof merit basing its decision on Section 2, Rule IV, Book Ill of the Integrated Rules and

Policy Instruction No. 9, which respectively provide:Sec. 2. Status of employees paid by the month. Employees who are uniformly paid bythe month, irrespective of the number of working days therein, with a salary of not lessthan the statutory or established minimum wage shall be presumed to be paid for alldays in the month whether worked or not.

POLICY INSTRUCTION NO. 9

TO: All Regional Directors

SUBJECT: PAID LEGAL HOLIDAYS

The rules implementing PD 850 have clarified the policy in the implementation of theten (10) paid legal holidays. Before PD 850, the number of working days a year in afirm was considered important in determining entitlement to the benefit. Thus, wherean employee was working for at least 313 days, he was considered definitely alreadypaid. If he was working for less than 313, there was no certainty whether the ten (10)paid legal holidays were already paid to him or not.



The ten (10) paid legal holidays law, to start with, is intended to benefit principally dailyemployees. In the case of monthly, only those whose monthly salary did not yet includepayment for the ten (10) paid legal holidays are entitled to the benefit.

Under the rules implementing PD 850, this policy has been fully clarified to eliminatecontroversies on the entitlement of monthly paid employees. The new determining ruleis this: 'If the monthly paid employee is receiving not less than P240, the maximummonthly minimum wage, and his monthly pay is uniform from January to December, heis presumed to be already paid the ten (10) paid legal holidays. However, if deductionsare made from his monthly salary on account of holidays in months where they occur,then he is still entitled to the ten (10) paid legal holidays.

These new interpretations must be uniformly and consistently upheld.

This issuance shall take effect immediately.

The issues are presented in the form of the following assignments of errors:

First Error

Whether or not the Secretary of Labor erred and acted contrary to law in promulgatingSec. 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9.

Second Error

Whether or not the respondent Secretary of Labor abused his discretion and actedcontrary to law in applying Sec. 2, Rule IV of the Integrated Rules and PolicyInstruction No. 9 abovestated to private respondent's monthly-paid employees.

Third Error

Whether or not the respondent Secretary of Labor, in not giving due credence to therespondent bank's practice of paying its employees base pay of 100% and premiumpay of 50% for work done during legal holidays, acted contrary to law and abused hisdiscretion in denying the claim of petitioners for unworked holidays and premium andovertime pay differentials for worked holidays.

The petitioner contends that the respondent Minister of Labor gravely abused hisdiscretion in promulgating Section 2, Rule IV, Book III of the Integrated Rules andPolicy Instruction No. 9 as guidelines for the implementation of Articles 82 and 94 ofthe Labor Code and in applying said guidelines to this case. It maintains that while it istrue that the respondent Minister has the authority in the performance of his duty topromulgate rules and regulations to implement, construe and clarify the Labor Code,such power is limited by provisions of the statute sought to be implemented, construedor clarified. According to the petitioner, the so-called "guidelines" promulgated by therespondent Minister totally contravened and violated the Code by excluding the



employees/members of the petitioner from the benefits of the holiday pay, when theCode itself did not provide for their expanding the Code's clear and concise conclusionand notwithstanding the Code's clear and concise phraseology defining thoseemployees who are covered and those who are excluded from the benefits of holidaypay.

On the other hand, the private respondent contends that the questioned guidelines didnot deprive the petitioner's members of the benefits of holiday pay but merely classifiedthose monthly paid employees whose monthly salary already includes holiday pay andthose whose do not, and that the guidelines did not deprive the employees of holidaypay. It states that the question to be clarified is whether or not the monthly salaries ofthe petitioner's members already includes holiday pay. Thus, the guidelines werepromulgated to avoid confusion or misconstruction in the application of Articles 82 and94 of the Labor Code but not to violate them. Respondent explains that the rationalebehind the promulgation of the questioned guidelines is to benefit the daily paidworkers who, unlike monthly-paid employees, suffer deductions in their salaries for not

working on holidays. Hence, the Holiday Pay Law was enacted precisely to countervailthe disparity between daily paid workers and monthly-paid employees.

The decision in Insular Bank of Asia and America Employees' Union (IBAAEU) v.Inciong (132 SCRA 663) resolved a similar issue. Significantly, the petitioner in thatcase was also a union of bank employees. We ruled that Section 2, Rule IV, Book III ofthe Integrated Rules and Policy Instruction No. 9, are contrary to the provisions of theLabor Code and, therefore, invalid This Court stated:

It is elementary in the rules of statutory construction that when the language of the law

is clear and unequivocal the law must be taken to mean exactly what it says. In thecase at bar, the provisions of the Labor Code on the entitlement to the benefits ofholiday pay are clear and explicit it provides for both the coverage of and exclusionfrom the benefit. In Policy Instruction No. 9, the then Secretary of Labor went as far asto categorically state that the benefit is principally intended for daily paid employees,when the law clearly states that every worker shall be paid their regular holiday pay.This is flagrant violation of the mandatory directive of Article 4 of the Labor Code,which states that 'All doubts in the implementation and interpretation of the provisionsof this Code, including its implementing rules and regulations, shall be resolved in favorof labor.' Moreover, it shall always be presumed that the legislature intended to enact avalid and permanent statute which would have the most beneficial effect that itslanguage permits (Orlosky v. Hasken, 155 A. 112)

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authoritygranted by Article 5 of the Labor Code authorizing him to promulgate the necessaryimplementing rules and regulations.

We further ruled:



While it is true that the contemporaneous construction placed upon a statute byexecutive officers whose duty is to enforce it should be given great weight by thecourts, still if such construction is so erroneous, as in the instant case, the same mustbe declared as null and void. It is the role of the Judiciary to refine and, whennecessary correct constitutional (and/or statutory) interpretation, in the context of theinteractions of the three branches of the government, almost always in situationswhere some agency of the State has engaged in action that stems ultimately fromsome legitimate area of governmental power (The Supreme Court in Modern Role,C.B. Swisher 1958, p. 36).

xxx xxx xxx

In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement theLabor Code and Policy Instruction No. 9 issued by the then Secretary of Labor must bedeclared null and void. Accordinglyl public respondent Deputy Minister of Labor AmadoG. Inciong had no basis at all to deny the members of petitioner union their regularholiday pay as directed by the Labor Code.

Since the private respondent premises its action on the invalidated rule and policyinstruction, it is clear that the employees belonging to the petitioner association areentitled to the payment of ten (10) legal holidays under Articles 82 and 94 of the LaborCode, aside from their monthly salary. They are not among those excluded by law fromthe benefits of such holiday pay.

Presidential Decree No. 850 states who are excluded from the holiday provisions ofthat law. It states:

ART. 82. Coverage . The provision of this Title shall apply to employees in allestablishments and undertakings, whether for profit or not, but not to governmentemployees, managerial employees, field personnel members of the family of theemployer who are dependent on him for support, domestic helpers, persons in the

personal service of another, and workers who are paid by results as determined by theSecretary of Labor in appropriate regulations. (Emphasis supplied).

The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary'sPolicy Instruction No. 9 add another excluded group, namely, "employees who are

uniformly paid by the month." While the additional exclusion is only in the form of apresumption that all monthly paid employees have already been paid holiday pay, itconstitutes a taking away or a deprivation which must be in the law if it is to be valid.

An administrative interpretation which diminishes the benefits of labor more than whatthe statute delimits or withholds is obviously ultra vires.

It is argued that even without the presumption found in the rules and in the policyinstruction, the company practice indicates that the monthly salaries of the employeesare so computed as to include the holiday pay provided by law. The petitioner



contends otherwise.

One strong argument in favor of the petitioner's stand is the fact that the CharteredBank, in computing overtime compensation for its employees, employs a "divisor" of251 days. The 251 working days divisor is the result of subtracting all Saturdays,Sundays and the ten (10) legal holidays from the total number of calendar days in ayear. If the employees are already paid for all non-working days, the divisor should be365 and not 251.

The situation is muddled somewhat by the fact that, in computing the employees'absences from work, the respondent bank uses 365 as divisor. Any slight doubts,however, must be resolved in favor of the workers. This is in keeping with theconstitutional mandate of promoting social justice and affording protection to labor(Sections 6 and 9, Article II, Constitution). The Labor Code, as amended, itselfprovides:

ART. 4. Construction in favor of labor . All doubts in the implementation andinterpretation of the provisions of this Code, including its implementing rules andregulations, shall be resolved in favor of labor.

Any remaining doubts which may arise from the conflicting or different divisors used inthe computation of overtime pay and employees' absences are resolved by the mannerin which work actually rendered on holidays is paid. Thus, whenever monthly paidemployees work on a holiday, they are given an additional 100% base pay on top of apremium pay of 50%. If the employees' monthly pay already includes their salaries forholidays, they should be paid only premium pay but not both base pay and premium

pay.The contention of the respondent that 100% base pay and 50% premium pay for workactually rendered on holidays is given in addition to monthly salaries only because thecollective bargaining agreement so provides is itself an argument in favor of thepetitioner stand. It shows that the Collective Bargaining Agreement alreadycontemplated a divisor of 251 days for holiday pay computations before the questionedpresumption in the Integrated Rules and the Policy Instruction was formulated. There isfurthermore a similarity between overtime pay, which is computed on the basis of 251working days a year, and holiday pay, which should be similarly treatednotwithstanding the public respondents' issuances. In both cases overtime work andholiday work- the employee works when he is supposed to be resting. In the absenceof an express provision of the CBA or the law to the contrary, the computation shouldbe similarly handled.

We are not unmindful of the fact that the respondent's employees are among thehighest paid in the industry. It is not the intent of this Court to impose any undueburdens on an employer which is already doing its best for its personnel. we have toresolve the labor dispute in the light of the parties' own collective bargaining agreement



and the benefits given by law to all workers. When the law provides benefits for"employees in all establishments and undertakings, whether for profit or not" and listsspecifically the employees not entitled to those benefits, the administrative agencyimplementing that law cannot exclude certain employees from its coverage simplybecause they are paid by the month or because they are already highly paid. Theremedy lies in a clear redrafting of the collective bargaining agreement with astatement that monthly pay already includes holiday pay or an amendment of the lawto that effect but not an administrative rule or a policy instruction.

WHEREFORE, the September 7, 1976 order of the public respondent is herebyREVERSED and SET ASIDE. The March 24, 1976 decision of the National LaborRelations Commission which affirmed the October 30, 1975 resolution of the Labor

Arbiter but deleted interest payments is REINSTATED.

SO ORDERED. äwphï1.ñët



G.R. No. 149252. April 28, 2005

DONALD KWOK, Petitioners, vs. PHILIPPINE CARPET MANUFACTURINCORPORATION, Respondents.

D E C I S I O N

CALLEJO, SR., J. : This is a petition for review of the Decision 1 of the Court of Appeals (CA) in CA-G.R.SP No. 60232 dismissing Donald Kwok’s petition for review on certiorari and affirmingthe majority Decision of the National Labor Relations Commission (NLRC), as well asits resolution in NLRC NCR Case No. 00-12-07454-96 dismissing the motion forreconsideration of the said decision.

The Antecedents

In 1965, petitioner Donald Kwok and his father-in-law Patricio L. Lim, along with someother stockholders, established a corporation, the respondent Philippine CarpetManufacturing Corporation (PCMC). The petitioner became its general manager,executive vice-president and chief operations officer. Lim, on the other hand, was itspresident and chairman of the board of directors. When the petitioner retired 36 yearslater or on October 31, 1996, he was receiving a monthly salary of P160,000.00. 2 Hedemanded the cash equivalent of what he believed to be his accumulated vacation andsick leave credits during the entire length of his service with the respondentcorporation, i.e., from November 16, 1965 to October 31, 1996, in the total amount ofP7,080,546.00 plus interest. 3 However, the respondent corporation refused to accedeto the petitioner’s demands, claiming that the latter was not entitled thereto. 4

The petitioner filed a complaint against the respondent corporation for the payment ofhis accumulated vacation and sick leave credits before the NLRC. He claimed that Limmade a verbal promise to give him unlimited sick leave and vacation leave benefitsand its cash conversion upon his retirement or resignation without the need for anyapplication therefor. In addition, Lim also promised to grant him other benefits, such asgolf and country club membership; the privilege to charge the respondent corporation’saccount; 6% profit-sharing in the net income of the respondent corporation (while Lim

got 4%); and other corporate perquisites. According to the petitioner, all of thesepromises were complied with, except for the grant of the cash equivalent of hisaccumulated vacation and sick leave credits upon his retirement. 5

The respondent corporation denied all these, claiming that upon the petitioner’sretirement, he received the amount of P6,902,387.19 representing all the benefits duehim. Despite this, the petitioner again demanded P7,080,546.00, which demand waswithout factual and legal basis. The respondent corporation asserted that the chairmanof its board of directors and its president/vice-president had unlimited discretion in the



use of their time, and had never been required to file applications for vacation and sickleaves; as such, the said officers were not entitled to vacation and sick leave benefits.The respondent corporation, likewise, pointed out that even if the petitioner wasentitled to the said additional benefits, his claim had already prescribed. It furtheraverred that it had no policy to grant vacation and sick leave credits to the petitioner. 6

In his Affidavit 7 dated May 19, 1998, Lim denied making any such verbal promise to hisson-in-law on the grant of unlimited vacation and sick leave credits and the cashconversion thereof. Lim averred that the petitioner had received vacation and sickleave benefits from 1994 to 1996. Moreover, assuming that he did make such promiseto the petitioner, the same had not been confirmed or approved via resolution of therespondent corporation’s board of directors.

It was further pointed out that as per the Memorandum dated November 6, 1981, onlyregular employees and managerial and confidential employees falling under Category Iwere entitled to vacation and sick leave credits. The petitioner, whose position did notfall under Category I, was, thus, not entitled to the benefits under the saidmemorandum. The respondent corporation alleged that this was admitted by thepetitioner himself and affirmed by Raoul Rodrigo, its incumbent executive vice-president and general manager.

In a Decision 8 dated November 27, 1998, the Labor Arbiter ruled in favor of thepetitioner. The fallo of the decision reads:

WHEREFORE, all the foregoing premises being considered, judgment is herebyrendered ordering the respondent company to pay complainant the sum of

P7,080,546.00, plus ten percent (10%) thereof as and for attorney’s fees.SO ORDERED. 9

Undaunted, the respondent corporation appealed the decision to the NLRC, allegingthat:

I. THE LABOR ARBITER ERRED IN CONCLUDING THAT KWOK WAS COVEREDBY THE NOVEMBER 6, 1981 MEMORANDUM ON VACATION AND SICK LEAVECREDITS. 10

II. THE LABOR ARBITER ERRED IN CONCLUDING THAT IT WASDISCRIMINATORY NOT TO GRANT KWOK THESE BENEFITS. 11

III. KWOK’S CLAIMS ARE BASELESS. 12

IV. KWOK’S CLAIMS FOR BENEFITS ACCRUING FROM 1966 ARE BARRED BYPRESCRIPTION. 13

V. THERE IS NO BASIS FOR THE AWARD OF P7,080,546.00. 14



The respondent corporation averred that based on the petitioner’s memorandum, hisadmissions and the contract of employment, the petitioner was not entitled to the cashconversion of his sick and vacation leave credits. While the respondent corporationconceded that the petitioner may have been entitled to unlimited sick and vacationleave benefits during his employment, it maintained that no such promise was made byLim to convert the same; even assuming that such verbal promise was made, therespondent corporation was not bound thereby since the petitioner failed to adduce thewritten conformity of its board of directors. The respondent corporation insisted that theclaims of the petitioner were barred under Article 291 of the Labor Code.

For his part, the petitioner made the following averments in his memorandum:

The non-performance by PCMC of this particular promise to convert in cash all of hisunused cash ( sic ) and sick leave credits was precipitated by the falling out of themarriage between Mr. Kwok and his wife, the daughter of Mr. Lim. In fact, even whileMr. Kwok was still the Executive Vice-President and General Manager of PCMC, whenthe falling out of the said marriage became apparent, the other benefits or perquisiteswhich Mr. Kwok used to enjoy were immediately curtailed by Mr. Lim to the prejudice ofMr. Kwok. 15

On November 29, 1999, the NLRC, by majority vote, rendered judgment granting theappeal, reversing and setting aside the decision of the Labor Arbiter. 16 The NLRCordered the dismissal of the complaint. Commissioner Angelita A. Gacutan filed adissenting opinion. 17

Aggrieved, the petitioner filed a petition for review with the CA, on the following

grounds:I

THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION ORWITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OFJURISDICTION WHEN IT DECLARED THAT THE VERBAL PROMISE OF MR. LIMTO PETITIONER WAS UNENFORCEABLE.

II

THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION ORWITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OFJURISDICTION WHEN IT RULED THAT THE VERBAL PROMISE BY MR. LIM TOPETITIONER WAS NOT BINDING AS IT WAS NOT APPROVED BY THE BOARD OFDIRECTORS.

III

THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION OR



WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OFJURISDICTION WHEN IT IGNORED STRONG EVIDENCE THAT PCMC CLOTHEDMR. LIM WITH AWESOME POWERS TO GRANT BENEFITS TO ITS EMPLOYEESINCLUDING PETITIONER AND RATIFIED THE SAME BY ITS SILENCE AND WHENIT IGNORED TOO EXISTING JURISPRUDENCE ON THE MATTER.

IV

THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION ORWITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OFJURISDICTION WHEN IT IGNORED STRONG AND CLEAR EVIDENCE THAT INPCMC THE GIVING OF BENEFITS TO PETITIONER, THOUGH NOT IN WRITING,WAS A PREVALENT PRACTICE.

V

THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION ORWITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OFJURISDICTION WHEN IT RULED THAT THE MEMORANDUM DATED APRIL 26,1997 APPLICABLE TO MR. RAOUL RODRIGO WAS ALSO APPLICABLE TOPETITIONER. 18

On February 28, 2001, the CA rendered judgment affirming the decision of the NLRCand dismissing the petition. 19 The petitioner’s motion for reconsideration thereof wasdenied by the appellate court, per its Resolution 20 dated July 17, 2001.

The petitioner, thus, filed the instant petition for review on certiorari with this Court,assailing the decision and resolution of the CA on the following claims:

I

The Hon. Court of Appeals, contrary to law, gravely erred and disregarded established jurisprudence in ruling that petitioner has not adduced sufficient evidence to supporthis claim that he was, indeed, promised the cash conversion of his unused vacationand sick leave credits upon retirement. 21

IIThe Hon. Court of Appeals gravely erred in ruling that even if private respondent’s (sic)Mr. Lim did make him such promise, the same cannot be enforced. 22

III

The Hon. Court of Appeals gravely erred and disregarded clear jurisprudence on thematter when it ruled that there is no showing that private respondent, thru its board ofdirectors either recognized, approved or ratified the promise made by Mr. Lim to



petitioner. 23

As gleaned from his Memorandum, the petitioner posits that he had adducedsubstantial evidence to prove that Lim, as president and chairman of the respondentcorporation’s board of directors, made a verbal promise to give him the cashconversion of his accumulated vacation and sick leave credits upon his retirement (thatis, benefits at par with the number of days to which the officer next in rank to him wasentitled). According to the petitioner, his claim is fortified by the fact that his successor,Raoul Rodrigo, has unlimited vacation and sick leave credits. The petitioner furtherasserts that he would not have accepted the positions in the respondent corporationwithout such benefit, especially since his subordinates were also enjoying the same.He posits that he was entitled to the said privilege because of his rank. He, likewise,claims that, in contrast to the evidence he has presented, the respondent corporationfailed to adduce proof of its affirmative allegations.

The petitioner further argues that his complaint was not time-barred since he filed it onDecember 5, 1996. Even if this were so, he is, nevertheless, entitled to the cash valueof his vacation and sick leave credits for three years before his retirement. Moreover,the evidence on record shows that officers belonging to Category I had been grantedthe cash conversion of their earned leave credits after the lapse of three years.

The respondent corporation, for its part, asserts that the petitioner failed to adducesubstantial evidence to the claims in his complaint. Even if Lim had made such verbalpromise to the petitioner, the same is not binding on the respondent corporation absentits conformity through board resolution. Moreover, the petitioner is not covered by theMemorandum dated November 6, 1981 because he had unlimited leave credits;

hence, it cannot be gainsaid that he still had unused leave credits to be converted. According to the respondent corporation, the petitioner himself admitted that he wasnot included in the Memorandum dated November 6, 1981; and even assuming that hewas covered by the said memorandum, the fact that his complaint was filed only in1996 precludes him from claiming the cash conversion of such leave credits for theyears 1966 to 1993.

The Court’s Ruling


The threshold issue in this case is factual – whether or not the petitioner is entitled,based on the documentary and testimonial evidence on record, to the cash value of hisvacation and sick leave credits in the total amount of P7,080,546.00. The resolution ofthe issue is riveted to our resolution of whether the petitioner’s mainly testimonialevidence of an alleged verbal promise made by a corporate officer to grant him theprivilege of converting accumulated vacation and sick leave credits after retirement orseparation from employment is entitled to probative weight.





Except for his bare assertions, petitioner has not adduced sufficient evidence tosupport his claim that he was, indeed, promised the cash conversion of his unusedvacation and sick leaves upon retirement. Petitioner harps on what he calls theprevalent practice in PCMC of giving him benefits, such as the use of golf and countryclub facilities, salary increases, the use of the company vehicle and driver, and sharingin PCMC’s annual net income, without either a written contract or a Board resolution toback it up. Respondent PCMC denies all these, however. According to respondent,petitioner’s share in the income of the company is actually part of the consultancy feewhich PCMC pays DK Management Services, Inc., a firm owned by petitioner’scompany. PCMC adds that the yearly salary increases of corporate officers werealways with the prior approval of the Board.

Nevertheless, assuming that petitioner was, indeed, given the benefits which he soclaimed, it does not necessarily follow that among those is the cash conversion of hisaccumulated leaves. It is a basic rule in evidence that each party must prove hisaffirmative allegation. Since the burden of proof lies with the party who asserts an

affirmative allegation, the plaintiff or complainant has to prove his affirmativeallegations in the complaint and the defendant or respondent has to prove theaffirmative allegations in his affirmative defenses and counterclaim. Petitioner, in thecase at bar, has failed to discharge this burden. 26

The CA made short shift of the claim of the petitioner that per Memorandum datedNovember 6, 1981, he was not entitled to the benefits of the company policy ofcommutation of leave credits. Indeed, the company policy of conversion into equivalentcash of unused vacation and sick leave credits applied only to its regular employees.The petitioner failed to offer evidence to rebut the testimony of Nel Gopez, Chief

Accountant of the respondent, that the petitioner was not among the regularemployees covered by the policy for the simple reason that he had unlimited vacationleave benefits. As stated by the CA, the petitioner no less corroborated the testimonyof Gopez, thus:

ATTY. PIMENTEL

And, so you mention[ed] earlier that ! the policy on vacation leave benefits apply forcategory one employee(s) and rank-and-file employee(s)?

WITNESS (Mr. Nel Gopez)

Yes.

ATTY. PIMENTEL

And who are considered category one employee(s)?

WITNESS



Category One employees are from the rank and of Senior Vice-President and AssistantGeneral Manager and below, up to the level of department managers.

ATTY. PIMENTEL

How about the complainant, Mr. Kwok, does he falling (sic) to the category one?

WITNESS

As far as I can remember, he is ( sic ) not belong to category one employee.

ATTY. PIMENTEL

Therefore, he is not entitled to the lump sum benefit?

WITNESS

Yes, Ma’am. ATTY. PIMENTEL

And would you know, Mr. Witness, why he is ( sic ) not given the conversion of thevacation leave benefits at the time category one employees sectors ( sic ) are given?

WITNESS

Because he has, as far as I can remember, he has unlimited vacation leave."

This was corroborated by petitioner himself when he testified in this wise:

ATTY. PIMENTEL

Mr. Witness, you occupied the position of Executive Vice-President and GeneralManager. You agree with me that this position or this office of Executive Vice-Presidentand General Manager are not covered by this policy.

WITNESS (Donald Kwok)

Yes, it is not covered by this policy.

!

ATTY. PIMENTEL

So this policy applies to persons below you and your father-in-law?

WITNESS



Yes, right.

ATTY. PIMENTEL

And this policy does not apply to you?

WITNESS

As far as I’m concerned, it does not apply for ( sic ) me.

In all respects, therefore, petitioner, by virtue of his position as Executive Vice-President, is not covered by the November 6, 1981 Memorandum granting PCMCemployees the conversion of their unused vacation and sick leaves into cash. 27

We have reviewed the records and found no evidence to controvert the followingfindings of the CA and its ratiocinations on its resolution of the petitioner’s submissions:

Second, even assuming that petitioner is included among the "regular employees" ofPCMC referred to in said memorandum, there is no evidence that he complied with thecut-off dates for the filing of the cash conversion of vacation and sick leaves. Thisbeing so, we find merit in respondent’s argument that petitioner’s money claims havealready been barred by the three-year prescriptive period under Article 291 of theLabor Code, as amended.

Third, and this is of primordial importance, there is no proof that petitioner has filedvacation and sick leaves with PCMC’s personnel department. Without a record ofpetitioner’s absences, there is no way to determine the actual number of leave creditshe is entitled to. The P7,080,546.00 figure arrived at by petitioner supposedlyrepresenting the cash equivalent of his earned sick and vacation leaves is thus totallybaseless.

And, fourth, even assuming that PCMC President Patricio Lim did promise petitionerthe cash conversion of his leaves, we agree with respondent that this cannot bind thecompany in the absence of any Board resolution to that effect. We must stress that thepersonal act of the company president cannot bind the corporation. As explicitly statedby the Supreme Court in People’s Aircargo and Warehousing Co., Inc. v. Court of

Appeals: "The general rule is that, in the absence of authority from the board of directors, noperson, not even its officers, can validly bind a corporation. A corporation is a juridicalperson, separate and distinct from its stockholders and members, ‘having xxx powers,attributes and properties expressly authorized by law or incident to its existence.’

!

"! the power and the responsibility to decide whether the corporation should enter into



a contract that will bind the corporation is lodged in the board, subject to the articles ofincorporation, by-laws, or relevant provisions of law."

Anent the third assigned error, petitioner maintains that the PCMC Board of Directorshas granted its President, Patricio Lim, awesome powers to grant benefits to itsemployees, adding that the Board has always given its consent to the way Lim ran theaffairs of the company especially on matters relating to the benefits that its corporateofficers enjoyed.

True, jurisprudence holds that the president of a corporation possesses the power toenter into a contract for the corporation when "the conduct on the part of both thepresident and corporation [shows] that he had been in the habit of acting in similarmatters on behalf of the company and that the company had authorized him so to actand had recognized, approved and ratified his former and similar actions."

In the case at bar, however, there is no showing that PCMC had either recognized,approved or ratified the cash conversion of petitioner’s leave credits as purportedlypromised to him by Lim. On the contrary, PCMC has steadfastly maintained that "theCompany, through the Board, has long adopted the policy of granting its earliermentioned corporate officers unlimited leave benefits denying them the privilege ofconverting their unused vacation or sick leave benefits into their cash equivalent."

As to the last assigned error, petitioner faults the NLRC for holding as applicable topetitioner, the April 26, 1997 Memorandum issued by PCMC to Raoul Rodrigo, DonaldKwok’s successor as company executive vice-president. The said memo grantedRodrigo unlimited sick and vacation leave credits but disallowed the cash conversion

thereof. Before he became executive vice-president, Rodrigo was senior vice-presidentand enjoyed the commutation of his unused vacation and sick leaves.

We note that the April 26, 1997 memo was issued to Rodrigo when petitioner wasalready retired from PCMC. While said memorandum was particularly directed toRodrigo, however, this does not necessarily mean that petitioner, as former executivevice-president, was then not prohibited from converting his earned vacation and sickleaves into cash since he was not issued a similar memo. On the contrary, the memosimply affirms the long-standing company practice of excluding PCMC’s top twopositions, that of president and executive vice-president, from the commutation ofleaves. As heretofore discussed, among the perks of those occupying these posts isthe privilege of having unlimited leaves, which is totally incompatible with the conceptof converting unused leave credits into their cash equivalents. 28

We are not convinced by the petitioner’s claim that Lim capriciously deprived him of hisentitlement to the cash conversion of his accumulated vacation and sick leave creditssimply because of his estrangement from his wife, who happens to be Lim’s daughter.The petitioner did not adduce any evidence to show that he appealed to therespondent corporation’s board of directors for the implementation of the said privilege



which was allegedly granted to him. Even if Lim was the president and chairman of therespondent corporation’s board of directors, the rest of the membership of the boardcould have overruled him and granted to the petitioner his claim if, indeed, the latterwas entitled thereto. Indeed, even the petitioner admitted that, after his retirement, theboard of directors granted to him salary increase for two years prior to his retirement. Ifthe claim of the petitioner had been approved by the board of directors, for sure, itwould have approved the same despite his falling out with the daughter of Lim.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. Costsagainst the petitioner.

SO ORDERED.

Documents

Minimum Labor Standard Benefits