G.R. No.

119205, April 15, 1998

Sime Darby Pilipinas, Inc. petitioner, vs NLRC and Sime Darby Salaried Employees Assoc., respondents

Ponente: Bellosillo

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

Facts: Sime Darby is engaged in the manufacture of automotive tires, tubes and other rubber products.
Private respondent (Sime Darby Salaried Employees Assoc.) is an association of the monthly salaried
employees of the Sime Darby factory workers in Marikina. Prior to the controversy, all employees of
Sime Darby worked from 7:45am to 3:45pm with a 30-minute paid "on call" lunch break.

On August 14, 1992, the company issued a memorandum to all factory employees advising all its
monthly salaried employees in Marikina Tire plant except those in the warehouse and Quality Assurance
Dept., of a change in work schedules. (M-F, 7:45am-4:45pm and Sat 7:45am-11:45am) with cofee break
of 10 minutes between 9:30am-10:30am and 2:30pm-3:30pm and lunch break between 12nn-1pm(M-
F).

Because of this memorandum, the association filed a complaint in behalf of its members a complaint
with labor Arbiter for unfair labor practice, discrimination and evasion of liability. However , the labor
arbiter dismissed the complaint on the grounds that the elimination of the 30 minute paid lunch break
constituted a valid exercise of management prerogative and that the new work schedule did not have
the effect of dimishing the benefits for the work did not exceed 8 hours.

Labor arbiter added that it would be unjust if they continue to be paid during their lunch break even if
they are no longer on call or required to work during the break.

The association appealed to the NLRC but NLRC has affirmed the labor arbiter's decision and dismissed
the appeal. However, in the motion for reconsideration, NLRC having two new commissioners has
reversed the earlier decision. Stating that,the the employees assoc. declared that the new work
schedule deprived the employees of the benefits of a time-honored company practice of providing its
employees a 30-minute paid lunch break resulting in an unjust diminution of company privileges
prohibited by Art. 100 of the Labor Code, as amended.

Ruling: The Office of the Solicitor General filed in a lieu of comment a manifestation and motion
recommending that the petitioner be granted, alleging that the 14 August 1992 memorandum which
contained the new work schedule was not discriminatory of the union 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 the employees rests
principally on their employer. In the instant case Sime Darby, as the employer, cites as reason for the
adjustment the efficient conduct of its business operations and its improved production.
The case before us does not pertain to any controversy involving discrimination of employees but only
the issue of whether the change of work schedule, which management deems necessary to increase
production, constitutes unfair labor practice. As shown by the records, the change effected by
management with regard to working time is made to apply to all factory employees engaged in the
same line of work whether or not they are members of private respondent union. Hence, it cannot be
said that the new scheme adopted by management prejudices the right of private respondent to self-
organization.

Management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations, transfer of employees, work
supervision, lay off of workers and discipline, dismissal and recall of workers. 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's interest and not for the purpose of defeating or circumventing the rights of the employees
under special laws or under valid agreements, this Court will uphold such exercise.

In this case, the new work schedule set by the employer fully complies with the daily work period of
eight (8) hours without violating the Labor Code. Although the old work schedule included a 30-minute
paid lunch break, the employees were on call and could be called upon to do jobs during lunch break.
With the new schedule, they can take one-hour lunch break without any interruption from their
employer.

Petition granted.

"Article 100. Prohibition against elimination or diminution of benefits.- Nothing in this Book shall
be construed to eliminate or in any way diminish supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code."
4. G.R. No. L-12075 May 29, 1959

NATIONAL RICE AND CORN CORPORATION (NARIC), petitioner,

vs.
NARIC WORKERS UNION, ET AL., respondents.

Characters: (1) National Rice and Corn Corp. (NARIC) – employer

(2) NARIC Workers Union - employees

Dissected Facts:
(A) Work: not stated. The report shows that there are 163 workers and employees of the corporation
who have rendered night work.
(B) Complaint: the Court of Industrial Relations directed that the corporation pay to its workers 25
per cent additional compensation for night work rendered by them from October 3, 1952, to
February 16, 1953. Computed on the basis of their respective monthly salaries, it amounted to
P5,221.84. The corporation prays before the Court for a recomputation.
(C) How the Chief Examiner made the computation:
He considered any all work performed between 6:00 o'clock in the afternoon and 6:00 o'clock in
the morning as "night work" and accordingly has awarded each employee or worker an additional
compensation of 25 per cent for "night work". He further stated that if a particular employee
worked from 8:00 o'clock in the morning to 5:00 o'clock in the afternoon and then rendered
overtime service from 5:00 o'clock in the afternoon of the same day to 7:00 o'clock in the evening
of the same day, he considered the work from 5:00 to 6:00 p.m. as overtime work and entitled to
25 per cent additional compensation as overtime work, and the same work from 6:00 to 7:00 p.m.
as both overtime work and night work and therefore entitled to 25 per cent additional
compensation as overtime work and another 25 per cent additional compensation as night work.

(D) Employer’s argument: That this interpretation of the term "night work" is, according to the
corporation, erroneous for it runs counter to the definition given to said term by this Court in Shell
Company of the Philippines vs. National Labor Union, 81 Phil., 315; 46 Off. Gaz., 97.

Issue: Should the employee performing his regular eight hours work during the daytime from 8:00 o'clock
in the morning to 12:00 o'clock at noon and from 1:00 o'clock to 5:00 o'clock in the afternoon . . . be paid
for his services from 5:00 o'clock to 9:00 in the afternoon as "overtime work" and at the same time be paid
from 6:00 o'clock to 9:00 o'clock in the evening as night work?"

Ruling: YES.

Thus, in said case (Shell Co. v. National Labor Union), the following comment was made: "The night work
which the Shell Company demands of its laborers is not merely an overtime work in the sense in which
this word is issued in Act No. 444, but it is in reality a complete working day also of eight hours, only that,
instead of its being done at daytime, it is performed at night. In other words, the night work referred to
here is not an excess, extension or overtime of the regular work during the day time, but it is rather
another kind of work absolutely independent of the work being done during the day. For this reason, there
are two shifts: the shift of laborers who work during the day and the shift of those who work at night."

While it is true that this Court made the above comment in the aforementioned case, it does not intend to
convey the idea that work done at night cannot also be an overtime work. The comment only served to
emphasize that the demand which the Shell company made upon its laborers is not merely an overtime
work but night work and so there was need to differentiate night work from daytime work. In fact, the
company contended that there was no law that required the payment of additional compensation for night
work unlike an overtime work which is covered by Commonwealth Act No. 444 (Eight Hour Labor Law).
And this Court in that case said that while there was no law actually requiring payment of additional
compensation for night work, the industrial court has the power to determine the wages that night workers
should receive under Commonwealth Act No. 103, and so it justified the additional compensation given to
night workers by the industrial court in the Shell case for "hygienic, medical, moral, cultural and
sociological reasons." That case therefore cannot be invoked as an authority for concluding that one who
does night work cannot be paid additional compensation for the same work as overtime. One is paid for
his work done during the night and the other is paid because it is excess of the regular eight-hour work
may be legally required to do. One is done for reasons of health and the other because of an express
mandate of the law (Commonwealth Act No. 444). We find therefore correct the computation made by the
chief examiner as affirmed by the industrial court.

The Court’s example:

The logic of this conclusion may be better seen by an example. Let us suppose that the workers of an
industrial company work in three shifts: one from 8:00 o'clock a.m. to 4:00 o'clock p.m.; another from 4:00
o'clock p.m. to 12:00 o'clock p.m.; and still another from 12:00 o'clock p.m. to 8:00 o'clock a.m. Supposing
that night work begins from 6:00 o'clock p.m. and ends at 6:00 o'clock a.m. (Article 13, New Civil Code.)
Under the law and jurisprudence, the first shift workers will have to be paid a compensation as day
workers; the second shift workers will have to be partly as day workers and partly as night workers; and
the third workers will have to be partly paid as night workers and partly as day workers.

Supposing again that the second shift workers, for some justifiable reasons, are required to extend their
work from 12:00 o'clock p.m. to 2:00 o'clock a.m. Under the law, they are entitled to additional
compensation for overtime work on the basis of their wages as night workers. If the first shift workers
were required to extend their work up to 8:00 o'clock p.m., is it not fair and logical that for the two hours
they work at night (6:00 to 8:00) they also be paid an overtime compensation on the basis of wages paid
for night workers? This is the only logical conclusion based on our ruling in the Shell case which requires
payment of additional compensation for night work. In other words, work done at night should be paid
more than work done by the chief examiner. Respondent court is there-workers regular hour of duty, he
should also be paid additional compensation for overtime work. This is what was done by the chief
examiner. Respondent court is therefore justified in affirming his report.
[G.R. No. 88795. October 4, 1994.]

6. SEABORNE CARRIERS CORPORATION and JERRY RONALDO GATAN, Petitioners, v.

NATIONAL LABOR RELATIONS COMMISSION and ARMANDO A. TERNIDA, Respondents.

Characters: Seaborne – employer corporation

Ternida – employee
Gatan – Seaborne’s President and General Manager

Dissected Facts:
(A) Work: Ternida began working for Seaborne on April 8, 1983 as Tug Master with monthly salary
of P 2,475.00.
(B) Complaint (by Ternida): for illegal dismissal, illegal deduction and unpaid wages which was later
amended to include petitioner Gatan as party-respondent and to embrace claims for overtime
pay, holiday pay, 13th month pay, sick leave pay, damages, and attorney’s fees
(C)Employees’ argument: On September 15, 1987, the tugboat he was manning met an accident.
Half of the cost of repairs totalling P5,000.00 was shouldered by Seaborne. Private respondent was
required to pay for the other half, and an initial salary deduction of P250.00 was actually made by
Seaborne. On September 24, 1987, he sought permission to go on leave of absence to ask from the
Department of Labor and Employment if such deduction was legal, but this request was not granted.
Instead, he was asked by petitioner Gatan, Seaborne’s president and manager, to tender his
resignation. When he refused to resign, as he had not yet received any separation pay, he was
dismissed.

(D) Employer’s argument: In this petition, the petitioners are asking the Court to set aside and
nullify the NLRC’s decision dated March 21, 1989, and the resolutions denying their motions for
reconsideration, on the following grounds: (a) the NLRC erred in concluding that the private
respondent is entitled to service incentive leave benefits as well as holiday and 13th month pay; and
(b) the NLRC erred in holding petitioner Jerry Ronaldo Gatan personally liable, with the petitioner
corporation, for the payment of backwages, holiday pay, 13th month pay, service incentive leave
benefits, and attorney’s fees.

Having limited the issues to these two questions, the other portions of the challenged decision are
deemed admitted by Seaborne. Hence, we will no longer dwell on the issue of dismissal,
reinstatement, award of backwages and attorney’s fees, and reimbursement of the amount illegally
deducted from the Ternida’s salary.

Seaborne aver that the award to Ternida should not have included service incentive pay because it
was never sought in the complaint and the private respondent is already enjoying vacation leave
benefits, which bars the employee from entitlement to the yearly service incentive leave benefit
mandated by Article 95 of the Labor Code.

With regard to the award 13th month and holiday pay, Seaborne allege that Ternida failed to prove or
establish that he is entitled to the same, and that he did not specify which holiday or what year he
was not paid said benefits.

First Issue: Whether or not Ternida has the burden of proving that he was not paid benefits.
Second Issue: Whether or not Gatan, Seaborne’s President and General Manager is personally liable.

Ruling for First Issue: These arguments are untenable.

Ternida’s allegation of non-payment of these benefits, to which he is by law entitled, is a negative

allegation which need not be supported by evidence unless it is an essential part of the cause of
action. It must be noted that the main cause of action of Ternida is his illegal dismissal, and the claim for
the monetary benefits is but an incident of the protest against such dismissal. Thus, the burden of
proving that payment of said benefits has been made rests upon the party who will suffer if no
evidence at all is presented by either party, that is, the petitioners as private respondent’s
employer.

Ruling for Second issue: This brings us to the second issue raised by Seaborne: Should Jerry Ronaldo
Gatan, as president and general manager of Seaborne be held responsible to the private respondent for
the payment of backwages and other monetary benefits awarded by the NLRC?

Seaborne rely on the case of Garcia v. NLRC, Et Al., where the personal liability of corporate officers to
dismissed employees was made to depend on whether such officers acted with evident malice and bad
faith. They argue that the assailed decision did not make any finding that Jerry Gatan acted maliciously or
in bad faith in terminating the services of Ternida.

This contention is meritorious. All that the evidence shows is that petitioner Gatan ordered Ternida to
resign and dismissed him when he failed to do so without considering the reason for such refusal, which
is the non-payment of his separation pay. There is nothing on record which would prove the insinuation
that Jerry Gatan sanctioned the deduction of P250.00 from private respondent’s salary, as well as the
denial of the latter’s request for leave of absence.

IN VIEW OF THE FOREGOING, the instant petition is DISMISSED and the liability of petitioner Seaborne
Carriers Corporation to Ternida is hereby affirmed.
G.R. No. 172029 August 6, 2008
8.    Association v. United Harbors’
ASSOCIATION OF INTERNATIONAL SHIPPING LINES, INC., in its own behalf and in representation of
its members: AMERICAN TRANSPORT LINES, INC., AUSTRALIAN NATIONAL LINE, xxxx petitioners,
vs.
UNITED HARBOR PILOTS’ ASSOCIATION OF THE PHILIPPINES, INC., respondent.

Characters: Association – employers UHPAP - employees

Dissected Facts:
(A) Work: harbor pilots.
(B) Complaint (by United Harbor Pilots’ Assoc.) claims for nighttime and overtime pay.
(C) Employees’ argument:

(D) Employer’s argument: No nighttime and overtime pay because of PPA Resolutions disallowing
overtime premium or charge and recalling its recommendation for a reasonable night premium pay or
night differential pay.

On March 1, 1985, the Philippine Ports Authority (PPA) issued PPA Administrative Order (AO) No. 03-
85 [herein referred to PPA AO 03-85] substantially adopting the provisions of Customs Administrative
Order (CAO) No. 15-654 on the payment of additional charges for pilotage service rendered
“between 1800H to 1600H,” or on “Sundays or Holidays,” practically referring to “nighttime and
overtime pay.”

On February 3, 1986, responding to the clamor of harbor pilots for the increase and rationalization of
pilotage service charges, then President Ferdinand E. Marcos issued Executive Order (EO) No. 1088
providing for uniform and modified rates for pilotage services rendered in all Philippine ports. It
fixed the rate of pilotage fees on the basis of the “vessel’s tonnage” and provided that the “rate for
docking and undocking anchorage, conduction and shifting and other related special services is equal to
100%.” EO No. 1088 also contained a repealing clause stating that all orders, letters of instruction, rules,
regulations, and issuances inconsistent with it are repealed or amended accordingly.

Subsequently, pursuant to EO No. 1088, the PPA issued several resolutions [Res. No. 1486, 1541,
and 1554 ] disallowing overtime premium or charge and recalling its recommendation for a
reasonable night premium pay or night differential pay.

On the strength of PPA Resolution No. 1486, petitioners Association of International Shipping Lines
(AISL) and its members refused to pay respondent United Harbor Pilots’ Association of the Philippines,
Inc. (UHPAP)’s claims for nighttime and overtime pay. In response, UHPAP threatened to discontinue
pilotage services should their claims be continually ignored.

Petitioners then filed a petition for declaratory relief with the RTC. The issues raised there were: (1) xxx

RTC granted the petition and declared that respondent UHPAP is not authorized to collect any overtime
or night shift differential for pilotage services rendered; respondent UHPAP filed directly before this Court
a petition for review on certiorari, decision was reversed in favor of respondents. Decision became final
and executory. Respondent UHPAP filed a motion for the issuance of a writ of execution with the
RTC.14Petitioners opposed15 the motion alleging that,

x x x [W]hen the Supreme Court ruled and declared that Executive Order 1088 does not deprive the PPA
of its power and authority to promulgate rules and rates for payment of fees including additional charges,
it had effectively ruled on the validity of PPA resolutions 1486, 1541, and 1554.
Opposition denied. Hence, filed a petition for certiorari under Rule 65 with CA, partly granted rendering
PPA Resolution Nos. 1486, 1541, and 1554 are valid and effective thereby disallowing the collection of
overtime pay BUT did not discuss the logical consequence of the resolution of the issue on PPA
Resolution. Therefore, filed a motion for partial reconsideration, DENIED. Hence, the present recourse.

Issue: : whether EO No. 1088 repealed the provisions of CAO No. 15-65 and PPA AO No. 03-85, as
amended, on payment of additional pay for holidays work and premium pay for nighttime service;

HELD: No.

No Intention to amend or supersede PPA AO

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

No inconsistency between EO 1088 and PA AO03-85

There is no inconsistency between EO No. 1088 and the provisions of PPA AO No. 03-85. These two
orders dwell on entirely different subject matters.

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

UHPAP members are entitled to nighttime and overtime pay

Members of respondent UHPAP are entitled to nighttime and overtime pay. Undoubtedly, pursuant
to PPA AO No. 03-85, members of respondent UHPAP are legally entitled to nighttime and
overtime pay.

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

**UHPAP’s motion for execution is procedurally infirm. In such civil actions for declaratory relief under
Rule 63 of the Rules of Court, the judgment does not entail an executory process, as the primary
objective of petitioner is to determine any question of construction or validity and for a declaration of
concomitant rights and duties.39 The proper remedy would have been for members of respondent
UHPAP to claim for overnight and nighttime pay before petitioners AISLI and its members.

Peition DENIED.
10. NATIONAL SHIPYARDS AND STEEL CORPORATION (NASSCO) vs.
COURT OF INDUSTRIAL RELATIONS and DOMINADOR MALONDRAS

G.R. No. L-17068 December 30, 1961

Characters: NASSCO – employer Malondras - employee

Dissected Facts:
(A) Work: seaman
(B) Complaint (by Malondras): filed for payment of overtime compensation. Granted by the CIR. The
Chief examiner excluded him from the second report so he filed a petition with the court to
include him in the second report.
(C) Employees’ argument:
(D) Employer’s argument: Questions the basis of the chief examiner in computing the overtime
compensation. The mere fact that Malondras was required to be on board his barge all day so that he
could immediately be called to duty when his services were needed does not imply that he should be
paid overtime for sixteen hours a day, but that he should receive compensation only for the actual
service in excess of eight hours that he can prove.

FACTS:
• The petitioner NASSCO, a GOCC, is the owner of several barges and tugboats used in the
transportation of cargoes and personnel in connection with its business of shipbuilding and repair.
• In order that its bargeman could immediately be called to duty whenever their services are
needed, they are required to stay in their respective barges.
• On April 15, 1957, 39 crew members of NASSCO’s tugboat service, including therein respondent
Dominador Malondras, filed with for the payment of overtime compensation to which NASSCO admitted
that they were required to render service during Sundays and legal holidays and are paid by NASSCO
their regular salaries and subsistence allowance, without additional compensation for overtime work.
• Pursuant thereto, CIR ordered that the overtime pay be computed.
• The crew members were granted by the court an overtime service of five (5) hours each day
on the first report covering January 1 to December 31, 1957. They were also given the same overtime
pay on the second report covering the period from January 1, 1954 to December 31, 1956 to the
exclusion of herein private respondent Dominador Malondras.
• Because of his exclusion from the second report of the examiner, and his time sheets having
been located in the meantime, Dominador Malondras filed petitions in the same case asking for the
compensation and payment of his overtime compensation for the period from January 1, 1954 to
December 31, 1956.
• The examiner submitted report giving Malondras an average of sixteen (16) overtime hours a
day, on the basis of being detailed on board in his time sheets, and recommending the payment to him of
the total amount of P15,242.15 as overtime compensation during the periods covered by the report.
• This was objected by NASSCO but was denied. The NASSCO moved for reconsideration, which
was denied by the Court en banc, with one judge dissenting. Whereupon, the NASSCO appealed to this
Court.

• CONTENTION OF EXAMINER: The words "Detail" or "Detailed on Board" means that as long as
respondent Malondras was in his barge for twenty-four hours, he should be paid overtime for sixteen
hours a day or the time in excess of the legal eight working hours that he could not leave his barge.
• CONTENTION OF NASSCO: The mere fact that Malondras was required to be on board his
barge all day so that he could immediately be called to duty when his services were needed does not
imply that he should be paid overtime for sixteen hours a day, but that he should receive compensation
only for the actual service in excess of eight hours that he can prove.

ISSUE: WON Malondras is entitled to 16 hours overtime while detailed on board.

HELD: NO.
The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore,
whether they were on board and cannot leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said number of hours.

Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this
reason that, in addition to their regular compensation, they are given free living quarters and subsistence
allowances when required to be on board. It could not have been the purpose of our law to require their
employers to pay them overtime even when they are not actually working; otherwise, every sailor on
board a vessel would be entitled to overtime for sixteen hours each day, even if he had spent all those
hours resting or sleeping in his bunk, after his regular tour of duty.

While Malondras' daily time sheets do not show his actual working hours, nevertheless, NASSCO has
already admitted in the Stipulation of Facts in this case that Malondras and his co-claimants did render
service beyond eight (8) hours a day when so required by the exigencies of the service; and in fact,
Malondras was credited and already paid for five (5) hours daily overtime work during the period from
May 1 to December 31, 1957, under the examiner's first report. Since Malondras has been at the same
job since 1954, it can be reasonably inferred that the overtime service he put in whenever he was
required to be aboard his barge all day from 1954 to 1957 would be more or less consistent. In truth, the
other claimants who served with Malondras under the same conditions and period have been finally paid
for an overtime of 5 hours a day, and no substantial difference exists between their case and the present
one, which was not covered by the same award only because Malondras' time records not found until
later.
 12. Caltex v. CIR, Nov. 3, 1986??????????

14.PNB v. PEMA, 115 SCRA 507 same with 11. PNB v. CIR

16. Mla. Railroad v. CIR, July 31, 1952

Characters: Manila Railroad – employer

1. CLAIM OF THE HEIRS OF TOMAS GUTIERREZ

Characters: Tomas Gutierrez – former employee, died in April 1945.

Complaint: (by heirs of Gutierrez) for the money equivalent of his unused vacation and sick leave.
Employer’s contention: The claim granted by the Court was not valid on the ground that:

-the CIR had no jurisdiction to pass upon said claim for the reason that it involved only a money claim and
not a labor dispute, so, the action should have been brought in an ordinary courts; and that furthermore,

-this grant was in violation of Sec. 286 of the Revised Administrative Code which provides that
accumulated vacation and sick leave shall be forfeited upon separation from the service.

Ruling: Jurisdiction ✔
Legality of the grant ✔

As regards the matter of jurisdiction, when the claim for the money equivalent of the vacation and sick
leave of Tomas Gutierrez was denied by the Railroad company with whom it was first filed, and the
claimants were dissatisfied with the denial, it became a labor dispute cognizable by the CIR.
Furthermore, in the case of Leyte Land Transportation Co., Inc. vs. Leyte Farmers-Laborers Union, 45
O.G. 4862, this Tribunal has already ruled that the Court of industrial Relations has authority to grant
employees and laborers vacation and sick leave with pay. In other words, the subject-matter of vacation
and sick leave or the demand for payment of the money equivalent thereof comes within the jurisdiction of
that court.

As to the propriety or legality of the grant, it would appear that the claim was based not so much on Sec.
286 of the Administrative Code, but rather upon a circular (Exhibit "I") issued by the Manager of the
Railroad company relative to the "grant of monetary aid to former employees and/or to the latter's
dependents, who could not be reinstated on account of illness or death." Besides, according to the
findings of the CIR "it was a long-standing policy of the railroad company to pay vacation and sick
leave duly acquired by its employees and laborers effective upon separation from the service" and
it said that that acquired right should be transmitted to the heirs in case of death. Moreover, Sec. 286 of
the Administrative Code relied upon by Manila Railroad has been amended by Republic Act No,
611 which suppresses that part relating to forfeiture of accrued vacation and sick leave upon
separation from the service. Instead, the amendment provides for payment thereof upon
separation from the service thru no fault of the employee.

2. CLAIM OF PEDRO DE LA CRUZ

Characters: Pedro de la Cruz – employee, incoming freight clerk

Complaint: (by de la Cruz) He filed a claim for his salary corresponding to the period of suspension and
CIR granted it.
Employer’s contention: The company on appeal now questions the grant on the theory that Pedro de la
Cruz was negligent, and so his suspension was a merited punishment.

Ruling: there exist no prima facie evidence to sustain the charge that he is responsible for the apparent
loss of 200 sacks of flour covered by and so Superintendent Libunao recommended that Pedro be
recalled to the service and that his temporary suspension be regarded as leave with pay.

Pedro de la Cruz was the incoming freight clerk of the Company in Naga, Camarines Sur on April 11,
1947. On that date, one Yu Eng Siong secured a waybill for 200 sacks of flour; a little later, he secured
another waybill for another shipment of 200 sacks of flour, all to be shipped to Naga. Of the 400 sacks of
flour only 200 passed thru the office of Pedro de la Cruz before delivery to the consignee. The other 200
sacks of flour were delivered to the consignee without passing thru his office as they should. However, for
both consignments or shipments, payment for the freight was made by the consignee, so that the
Company suffered no loss. For this alleged irregularity, Pedro de la Cruz was suspended from August 28,
1947 until December 5, 1947. He filed a claim for his salary corresponding to the period of suspension
and CIR granted it. The company on appeal now questions the grant on the theory that Pedro de la Cruz
was negligent, and so his suspension was a merited punishment, and that furthermore, the fact that the
company suffered no financial loss should not be considered in the disciplinary action taken by it.

In support of its action in granting the claim, the CIR in its decision says that the suspension of Pedro de
la Cruz was the result of a misunderstanding; that Pedro was not to blame for the irregularity because the
reason why the other shipment of 200 sacks of flour did not pass thru his office was because the station
laborers in his office immediately delivered the flour to the consignee without his knowledge and consent.

This declaration and finding of the trial court weighs heavily in favor of his innocence. Moreover,
according to Exhibit "O", a "memo for the Actg. Managing Director of the Railroad Co., Mr. Jose Libunao,
Superintendent of Transportation, who would appear to have made some investigation of the case,
believed that there exist no prima facie evidence to sustain the charge that he is responsible for the
apparent loss of 200 sacks of flour covered by and so Superintendent Libunao recommended that Pedro
be recalled to the service and that his temporary suspension be regarded as leave with pay.

We find this portion of the decision appealed from, ordering the railroad company to pay the salary of De
la Cruz during the whole period of his suspension warranted, but that as recommended by the
Superintendent of Transportation, the period of suspension be considered as leave with pay. With this
modification, this part of the decision of the lower court is affirmed.

3. CLAIMS OF TOMAS MENDOZA, ALFREDO RAGAS, NESTOR SALAZAR and DEMETRIO

AGONCILLO

Characters; Tomas Mendoza - assistant mechanic

Demetrio Agoncillo - mechanic
Nestor Salazar and Alfredo Ragas - tiremen

Complaint: (by Mendoza) prays the Court that the Company be ordered to pay him his salary from
the time he was dismissed on October 27, 1947 until August 21, 1948 when he was re-employed as
temporary riveter
(by Salazar, Agoncillo and Ragas) petitioned the same Court to order the refund of their
fines; P80, P81; P20, respectively.

Employer’s contention: the employees conspired to steal the power generator, the box of carpenter
tools and the jeep battery.

Ruling: When a company after due and fair investigation is convinced that an employee is dishonest and
disloyal and it has lost confidence in him, said company may not be compelled to retain him in its employ.
In the month of September, 1947 Tomas Mendoza was working as assistant mechanic, Demetrio
Agoncillo as mechanic, and Nestor Salazar and Alfredo Ragas as tiremen, for the Manila Railroad Co. in
the Caloocan electrical shop and garage of the Luzon Bus Line, a subsidiary of the Railroad company,
were deposited among others one power generator valued at P200.00 belonging to the Superintendent of
the Luzon Bus Line, one box containing carpenter tools belonging to Bonifacio Flores, valued at P250.00
and one battery belonging to a jeep assigned for the use of the purchasing agent, costing P40.00. The
power generator was loaned to the Company and was being used in the garage. At about 8:45 p.m. on
September 14, 1947, Agoncillo drove bus No. 39 out of the garage with Salazar and Ragas inside the
bus, presumably to test its brakes. Tomas Mendoza was then near the entrance or gate of the garage
working on the stop light of bus No. 38. As was the custom, Patrolman or guard Velasquez of the
Company stopped bus 39 at the gate to inspect and search it with the use of his flashlight. As he was
beginning or about to begin his inspection Mendoza approached and asked him to accompany him to go
to another part of the garage to investigate a noise supposedly coming from there. Pat, Velasquez
acceding to his suggestion or request, left bus 39 but warned the occupants Including the driver not to
leave until he returned and made his inspection. In the company of Mendoza, Pat, Velasquez went to the
place indicated but found nothing. When he returned to the gate to make his inspection he found that bus
39 had already left, in violation of his instructions. The following morning the power generator, the
box of carpenter tools and the jeep battery, were found missing. For the loss of these articles
Mendoza, Ragas, Salazar and Agoncillo after due investigation were held responsible. Tomas
Mendoza as the mastermind was summarily dismissed on October 27, 1947, while Ragas, Salazar
and Agoncillo were fined P80.00, P81.00 and P20.00, respectively, Mendoza later asked the CIR to
order the Company to pay him his salary from the time he was dismissed on October 27, 1947
until August 21, 1948 when he was re-employed as temporary riveter and Salazar, Agoncillo and
Ragas petitioned the same Court to order the refund of their fines. The Court of Industrial Relations
in its decision appealed from held that there was no evidence under which to hold these four men
responsible for the loss of the articles in question because nobody saw them steal said articles and so
granted their demands.

After a careful review of the record of the case particularly that referring to this point, we agree with the
petitioner that the respondent Court of Industrial Relations not only erred in arriving at its conclusion that
these four employees of the company should not be held responsible for the loss of the properties in
question, but that it committed a grave abuse of discretion in disregarding and ignoring completely the
various investigations conducted by the company over the loss of said properties, investigations and re-
investigations made at the request of said four men and wherein they were represented by counsel.
There is no allegation or claim that these investigations were not conducted properly or that the finding
and decision of the company was illegal or arbitrary. Mr. Sergio Bayan, General Manager of the Railroad
company at the time, prepared a long and elaborate report based on the investigations conducted by the
company and there is every reason to believe as claimed by him that there was connivance
between Mendoza and the three other employees who removed and carried away the generator,
carpenter tools and battery from the garage by using the bus No. 39. According to Manager Bayan,
because the garage was surrounded by a wall on three sides and the only exit was the gate, it was next
to impossible to remove the articles stolen, particularly the power generator except thru the gate and by
means of a vehicle; that said articles must have been loaded in bus No. 39 that night, and that to prevent
their being discovered by the guard or patrolman, Mendoza through an artifice, distracted the attention of
the guard by taking him away from the gate by asking him to investigate a noise on one of the corners of
the garage, and that during his absence and despite his instructions to the contrary, the bus was driven
away. According to Manager Bayan, in an effort to accord more favorable consideration Mendoza, he
investigated his background and his past conduct in relation to his employment in the Company so that if
it should turn out that he had a good character and had been loyal to the Company and observed
exemplary behaviour, his highly suspicious conduct with regard to the loss of the articles in question
might be overlooked. It turned out, however, that in the past, articles and properties of the company had
been disappearing, and that the circumstances surrounding their loss pointed to Mendoza as the one
most likely to have taken them away; and that furthermore, after the dismissal of Mendoza on October 27,
1947, the loss of articles and properties from the premises of the company ceased.
In support of its finding that Mendoza was not responsible for the loss of the generator, carpenter tools
and jeep battery, the CIR said that the Corporate Counsel, convinced of the innocence of Mendoza, did
not file any criminal action or any administrative charges. This is hardly correct. The reason said
Corporate Counsel did not file any criminal charge against Mendoza was not because he was convinced
that Mendoza was innocent but because in his opinion there was not sufficient evidence to support a
criminal conviction. This appears in his letter to the General Manager, Exhibit K. As to the filing of
administrative charges, it was not he who files administrative charges but the officials of the company. In
fact, said administrative action was taken. Several investigations were conducted resulting in the
dismissal of Mendoza and the fining of his companions. To secure conviction in a criminal case, guilt must
be established beyond reasonable doubt. In an administrative case, that degree of proof is not necessary.
The CIR in exonerating Mendoza and his companions said that no one saw them steal the articles lost.
But sometimes, even in criminal cases, circumstantial evidence is competent, even sufficient. This is
more so in administrative cases. When a company after due and fair investigation is convinced that
an employee is dishonest and disloyal and it has lost confidence in him, said company may not be
compelled to retain him in its employ. (Manila Trading & Supply Co. v. Zulueta et al., 69 Phil. 485)

According to Manager Bayan, because of his entreaties, Mendoza was re-employed as a temporary
riveter, as an act of generosity on the part of the company, not because it was convinced that he was
innocent, or that he deserved to be exonerated. As to Ragas, Salazar and Agoncillo, what we have
already said about Mendoza, applies to them and we agree with the result of the administrative action
taken by the Company against them. For the foregoing reasons, this part of the decision appealed
from ordering the company to pay Mendoza his salary from October 27, 1947 to August 21, 1948
and to refund the fines of P80.00, P81.00 and P20.00 imposed on Ragas, Salazar and Agoncillo,
respectively, is reversed.

4. CLAIMS OF ELIODORO BICIERRO, IRINEO ARAGON, FERNANDO BALINGUIT, AND MARCELO

HERMOSURA

Characters: Bicierro - checker

Aragon - night clerk
Balinguit - receiving clerk
Hermosura,- relief clerk

FACTS and RULING: A piano was destroyed when unloading. The Court found that only Bicierro is
responsible for the damage and ordered the refund of fines imposed on Aragon, Balinguit and
Hermosura. From the evidence, only Biciero was the one present when it arrived and when it was
unloaded, the damage evidently having occurred in the process of unloading.

In the month of August, 1947, Bicierro was a checker, Aragon a night clerk, Ballnguit, a receiving clerk
and Hermosura, a relief clerk, of the Railroad company. On August 3, 1947, a piano shipped from Ligao,
Albay thru the Manila Railroad Co. was received at the Manila station. It arrived in good condition and
was received by Bicierro as checker. The piano was covered by a crate. Pursuant to the practice of the
company and under the supervision of Bicierro, the crate was raised and removed and the piano was
unloaded by the porters and the crate later replaced. When the owner came to claim the piano, he found
it damaged, two legs and a small portion of one side having been destroyed. Said owner filed a complaint
with the company and the corresponding investigation was conducted resulting in Bicierro, Aragon,
Balinguit and Hermosura being fined P100.00 each. From the evidence the respondent court found that
only Bicierro may be held liable for the damage to the piano because he was the one present when it
arrived and when it was unloaded, the damage evidently having occurred in the process of unloading; that
the three other men should not be held responsible because they had nothing to do with the unloading
and in fact arrived at the office and commenced work after the piano had been unloaded; and that their
only fault if any, was their failure to report the damage, but they claim that they did not notice it. We agree
with the respondent Court in holding only Bicierro responsible for the damage, approving the fine imposed
upon him and ordering the refund of the fines imposed on Aragon, Balinguit and Hermosura. Tills part of
the decision appealed from is therefore affirmed.
5. THE CLAIMS OF DOMICIANO NODADO AND FRANCISCO GARCIA

Characters: Nodado and Garcia – auditors.

Complaint: (by Nodado)– overtime pay for services rendered from March 1 st to Aug. 15, 1947
(by Garcia) – overtime pay for services rendered from January 1st to August 15, 1947 for
Garcia

Employees’ contention:

Employer’s contention: on the ground that the overtime services were rendered in violation of the rules
and regulations of the company as well as the circular issued to the effect that before overtime work may
be performed with pay, the approval of the corresponding department head should be secured.

Ruling: They are entitled to overtime pay. The circular referred to was issued and promulgated after the
overtime work had been rendered by Nodado and Garcia and , it has been shown that it was necessary
for the two men to work overtime in order to audit all the passenger trains assigned to them,

Nodado and Garcia worked as auditors of the Company, As such they filed claims for overtime pay for
services rendered from March 1st to August 15, 1947 for Nodado, and from January 1st to August 15,
1947 for Garcia. These claims were turned down by the Company on the ground that the overtime
services were rendered in violation of the rules and regulations of the company as well as the circular
issued to the effect that before overtime work may be performed with pay, the approval of the
corresponding department head should be secured. The respondent CIR correctly found that the circular
referred to was issued and promulgated after the overtime work had been rendered by Nodado
and Garcia. Furthermore, it has been shown that it was necessary for the two men to work overtime
in order to audit all the passenger trains assigned to them, sometimes working from 4:20 in the
morning until 8:45 in the evening in order to follow the schedule, and that they had been instructed to do
so by their immediate superior, District Auditor P. Meneses. Under the circumstances the respondent
Court was justified in ordering the company to pay for this overtime work in the amounts of 863.58 and
648.09 to Nodado and Garcia, respectively.

6. THE CLAIM OF FELIX BASILIO

Characters: Basilio – storekeeper

There is no dispute her

There is no dispute as to Basilio having performed overtime work which benefited the Company.

Felix Basilio was employed as storekeeper in Baguio by the Benguet Auto Line, a subsidiary of the Manila
Railroad Co. His claim for overtime work was denied by the Company but it was approved by the
respondent Court of Industrial Relations. There is no dispute as to Basilio having performed overtime
work which benefited the Company. At the time he rendered said service the Company was in that
particular line short-handed and Basilio had to do the work of several men. His chief Mr. Casiano
Rivera, Superintendent of the Benguet Auto Line, asked him to render said service and later Mr.
Rivera recommended that payment of this overtime be made. Said recommendation was approved
by Mr. Sergio Bayan, General Manager of the Railroad company. It was also approved by Mr.
Rabaya, the corresponding department head. To us, it is therefore clear that the order of the
industrial court on the company to pay Basilio for this overtime work was fully justified. For this
reason, this portion of the decision is hereby affirmed.
7. CLAIM OF SANTOS UMALI

Characters: Umali – conductor

Complaint: (by Umali) overtime pay

Employee’s contention:

Employer’s contention: The Company refused to pay for this overtime work on the ground that it was
rendered in violation of Circular No. 251 requiring previous authority from the corresponding department
head and that it was not supported by supporting papers.

Ruling: the overtime work was actually performed by Umali despite the non-conformity of the Company's
timekeeper. As conductor he had to perform his duties during the trip and if said trip lasted more than
eight hours because of unavoidable delays, engine or tire trouble, etc., he could not just quit work upon
the expiration of the 8-hour period unless there was a substitute ready to take his place. Under the
circumstances, and because of the small amount involved, we have no hesitation in affirming as we
hereby affirm this part of the decision of the Court of Industrial Relations.

Umali worked as a conductor on the Luzon Bus Line, a subsidiary of the Company. In connection with his
work as conductor he had to make long trips from Manila to Laguna and Tayabas and to perform his
duties, he had to work sometimes more than eight hours a day. For this overtime work he rendered from
February 2, 1947 to June 30, 1949, he claims P127.65. The Company refused to pay for this overtime
work on the ground that it was rendered in violation of Circular No. 251 requiring previous authority from
the corresponding department head and that it was not supported by supporting papers. We agree with
the respondent Court that the overtime work was actually performed by Umali despite the non-conformity
of the Company's timekeeper. Umali presented bis corresponding slips to support his claim. The trial
court believed him. As conductor he had to perform his duties during the trip and if said trip lasted more
than eight hours because of unavoidable delays, engine or tire trouble, etc., he could not just quit work
upon the expiration of the 8-hour period unless there was a substitute ready to take his place. Under the
circumstances, and because of the small amount involved, we have no hesitation in affirming as we
hereby affirm this part of the decision of the Court of Industrial Relations.

8. DEMAND OF THE ADDITIONAL EMPLOYEES FOR PERMANENT APPOINTMENTS

Characters: Laborers on temporary basis

Complaint: employees demanded that they be made permanent after rendering six months service

Employee’s contention:

Employer’s contention:

Ruling: this part of the decision appealed from ordering the company to give permanent appointment to all
temporary employees who rendered at least six months for ordinary laborers and twelve months for
skilled laborers is reversed.

To work on specific projects of the Railroad Company such as the rehabilitation of motor cars, trailers and
passenger coaches which were damaged during the war, laborers were employed on a temporary basis.
They were given to understand that their employment would cease upon termination of the project
upon which they were working. Some of these projects lasted over a year. However, some of these
temporary employees because the project upon which they were working terminated or because work
thereon had to stop for lack of materials and for other reasons, were assigned to another work directly
connected with the promotion of the business of the Company, All these employees demanded that they
be made permanent after rendering six months service. The respondent Court in a majority opinion
granted the demand and directed the Company to appoint permanently all employees who have rendered
at least six months continuous and efficient service for ordinary laborers and twelve months for skilled
laborers, provided that the service rendered was loyal and efficient. The Company is appealing from this
part of the decision.

The record of the case fully supports the stand taken by Judge Juan L. Lanting in his dissent from the
majority or rather from the majority resolution in banc denying the company's motion for reconsideration.
It turns out that this same demand for permanent appointment of additional employees had already been
presented and considered by the Court of Industrial Relations in case No. 270-V, Demand No. 11
between the same parties. The original decision of the trial court on that point dated February 10, 1950,
reads thus:

"In the case at bar, it is admitted by respondent Company that some of the workers have been assigned
to departments other than their original assignments a mute evidence that the Company intends to retain
them as such permanent employees. Insofar as these workers are concerned, therefore, the Court finds
them no longer as temporary employees but as permanent workers. With respect to the rest if really the
company has no more work for them, they may be dismissed, considering that they are just temporary
workers."

The above ruling was clarified in a subsequent order of the same court dated September 8, 1950, reading
as follows:

"That the so-called 'additional employees' who worked on definite projects such as rehabilitation
of motor cars, motor car trailers, and passenger couches which were damaged during the war,
and who were retained and transferred to departments other than their original assignments but
directly connected with promotion of its regular business, become permanent employees six (6)
months after such retentions and transfers: but those who were retained in their original
assignments in the rehabilitation projects regardless of the length of service remained to be
temporary. Those of the latter category, the temporary employees, are 'the rest' referred to in the
decision."

As Judge Lanting points out, the previous decision, both original and as clarified, is wholly
inconsistent with the present decision on this point in that the first decision which has already
become final distinguishes between temporary employees who have been re-assigned to other
work more or less permanent in nature and those employees who remained in their original
assignment or on projects of a temporary character. In the present decision the distinction is
ignored regardless of the kind of work tn which the employees were assigned, whether temporary
or permanent and despite the fact that in the temporary projects the employees were given to
understand that their employment would cease upon completion of the project. The decision in
case No. 270-V between the same parties dated February 10, 1950, clarified by the order of September
8, 1950, besides being more, reasonable and fair, has become final and should stand. For this reason,
this part of the decision appealed from ordering the company to give permanent appointment to all
temporary employees who rendered at least six months for ordinary laborers and twelve months for
skilled laborers is reversed.

18. GLOBAL INC. vs. ATIENZA ET AL

G.R. No.L-51612-13
JULY 22, 1986

GLOBAL INCORPORATED, petitioner,

vs.
HON. COMMISSIONERS DIEGO D. ATIENZA, GERONIMO Q. QUADRA and CLETO T. VILLATUYA,
and CLARITA ROSAL, respondents.

Characters: Global – employer

Clarita Rosal – respondent, sales clerk

Employee’s contention: Clarita Rosal filed her opposition to the clearance application as well as a
counter-complaint against Global Inc., for illegal dismissal, overtime pay and premium pay.

Employer’s contention: filed , an application for clearance to terminate the services of Clarita Rosal, for
having violated company rules and regulations by incurring repeated absences and tardiness.

FACTS: Rosal, herein private respondent, commenced her employment with petitioner Global
Incorporated in February, 1970, as a “Sales Clerk.” In November 1976 Global Inc. filed with the
Department of Labor Regional Office, an application for clearance to terminate the services of Clarita
Rosal, for having violated company rules and regulations by incurring repeated absences and tardiness.
The subject employee was placed under preventive suspension on November 16, 1976 pending
resolution of the application for clearance.

Clarita Rosal filed her opposition to the clearance application as well as a counter-complaint against
Global Inc., for illegal dismissal, overtime pay and premium pay.

The officer-in-charge of Regional Office, Ministry of labor Leogardo, Jr. lifted the preventive suspension of
Clarita Rosal, finding her suspension not warranted, and reinstated her to her former position without loss
of rights and with full backwages from the time of preventive suspension up to the date of her actual
reinstatement.

The Labor Arbiter rendered his decision dismissing the complaint for illegal dismissal, overtime
compensation and premium pay, and the clearance for the complainant’s termination is granted.

Rosal appealed the aforesaid decision to the NLRC.Respondents Commissioners Atienza and Quadra
modified the appealed decision, whereby:
(a) respondent is ordered to pay complainant overtime pay for the period Nov. 1, 1974 to Nov. 16, 1976
when she was suspended;
(b) respondent is likewise ordered to pay complainant backwages from Dec. 2, 1976 to May 31, 1978;
(c) the decision of the Labor Arbiter granting clearance to terminate the services of the complainant is
affirmed.
Respondent Commissioner Villatuya voted to affirm the Labor Arbiter’s decision. Hence, the instant
petition.

ISSUE: WON
Rosal is entitled to overtime pay
Rosal is entitled to backwages

HELD: The assailed decision of the NLRC is modified, where the order to pay overtime pay to Rosal is
set aside, the order to pay Rosal backwages affirmed, and the decision granting clearance to terminate
the services of Rosal likewise affirmed

Overtime pay
1. NO. We agree with the conclusion of the Labor Arbiter that the same should be denied for want of
sufficient factual and legal basis. No employee is authorized to work after office hours, during Sundays
and Holidays unless required by a written memorandum from the General Manager. During the period
from Nov. 1, 1974 to Nov. 16, 1976, no employee of the company was never required to work after 5:00 in
the afternoon. There is nothing in the record except her bare allegations which would show that she truly
and actually rendered said overtime work

Backwages
2. YES. the NLRC ordered petitioner to pay Rosal “backwages from Dec. 2, 1976 to May 31, 1978”, the
date when Asst. Secretary Leogardo, Jr., rendered his decision lifting the preventive suspension of Rosal
and ordering petitioner to reinstate her to her former position without loss of rights and with full
backwages from the time of preventive suspension up to the date of her actual reinstatement.c

We agree. We note that this decision of the Labor Arbiter ordering reinstatement had not been complied
with. Neither was it appealed by petitioner, therefore, the decision had become final and executory. To
exempt petitioner from the payment of backwages would be to give premium to the blant disregard of
orders of the Ministry of Labor. Moreover, it would be in consonance with compassionate justice that
Rosal be paid backwages during the period that she was supposed to be reinstated

Note that the only ground for the imposition of preventive suspension is provided for under Sec. 4, Rule
XIV of the Implementing Regulations of the Ministry of Labor which reads-

SEC. 4. Preventive suspension. The employer may place the employee concerned under preventive
suspension only if the continued employment of the employee poses a serious and imminent threat to the
life or property of the employer or of the co-employees. Any preventive suspension before the filing of the
application shall be considered worked days, and shall be duly paid as such if the continued presence of
the employee concerned does not pose a serious threat to the life and property of the employer or of the
co-employees.

As aptly held by Asst. Secretary Leogardo Jr., the continued presence of Clarita Rosal never posed a
serious and imminent threat to the life or property of the employer or co-employees as would warrant her
preventive suspension
20. WILLIAM LINES, INC. and ESPIRITU TAN, as Manager, petitioners, vs. EUGENIO LOPEZ and
COURT OF INDUSTRIAL RELATIONS, respondents.
G.R. No. L-33013 March 29, 1980

Characters: William Lines – employer

Eugenio Lopez – employee, storekeeper

Complaint: (by Lopez) claiming salary differentials in the amount of P2,816.00, premium pay for services
rendered on Sundays and holidays, as well as daily overtime compensation, with a request for
reinstatement.

Employee’s contention:

Employer’s contention:

Facts:William Lines engaged in shipping business in the Philippines, employed Eugenio Lopez, as
storekeeper of the M/V Luzon, with a monthly salary of P122.00. was transferred to the M. VEdward, then
to M/V Victoriano, and finally to M/V Davao.

Lopez ‘ services were terminated on October 13, 1962 when the M/V Davao was drydocked in Cebu. He
received the separation pay of P1,586.00.

On March 17, 1964. approximately one (1) year, five (5) months and four (4) days after his services were
terminated, Lopez, who was refused readmission to work by petitioners filed a petition with the CIR,
claiming salary differentials in the amount of P2,816.00, premium pay for services rendered on Sundays
and holidays, as well as daily overtime compensation, with a request for reinstatement.

William Liner's Argument (Overtime)

Lopez never rendered overtime service because the nature of his work was without fixed time and did not
require him to work for more than eight (8) hours a day.

CIR Ruling: reinstatement + overtime compensation

CIR directed William shipping corporation to -

". . . immediately reinstate complainant Eugenio Lopez to his former work or to any equivalent position,
pay him the corresponding overtime compensation at the rate of 2 hours a day for the duration of his
employment, computed on the basis of his actual working days at his last rate.

ISSUES:

1. Whether or not the CIR has jurisdiction over the money claims ... for salary differentials, premium pay
for Sundays and holidays and overtime pay, considering that herein claimant filed the said case long after
the termination of the employer-employee relationship and considering further that he did not at an
support his claim for reinstatement with any proof that his dimissal was wrongful or illegal;
(CIR has jurisdiction… because Lopez claims right to be reinstated to his former work, aside from
backwages)

2. Whether or not the CIR, assuming it has jurisdiction over the case, could lawfully order the
reinstatement of herein claimant who had been laid off and paid his severance pay, considering that there
was no proof whatsoever presented by claimant that his dismissal was illegal or wrongful;
(The burden of proof that there was illegal dismissal devolves upon Lopez, he failed to discharge
said burden. An employee may be dismissed without just cause. He was duly notified of the
severance, in the alternative he accepted separation pay.)
3. Whether or not prescription and laches had set in to bar herein Lopez’ alleged right to reinstatement;
(no right to reinstatement exists, it is unnecessary to discuss)

4. Whether or not the CIR's finding of fact as to the number of claimant's working hours during his
employment is binding upon this ... Court, considering that such finding was not at all supported
by the evidence submitted in the instant case;
(it is not true that there is no evidence to support the CIR's finding of the hours of Lopez’ work..
basis is the testimony of Lopez)

5. Whether or not the claim for overtime compensation of claimant, at least insofar as those that
have accrued for more than 3 years, has already prescribed under C.A. 444, as amended by R.A.
1993 and R.A. 2377.
(Similar claims which accrued prior to the 3-year period or before March 17, 1961 have already
prescribed, and can no longer be enforced in this action)

Issues Nos. 1, 2 and 3 — These issues are interrelated and will be discussed and resolved jointly.

With respect to the first issue, William Lines’ position is that it is the regular courts, not the CIR, which
have jurisdiction over claimant-respondent's claim; that the CIR has jurisdiction over the same only if "the
employer-employee relationship is still existing or the employee seeks reinstatement"; that claimant-
respondent's employment had already been terminated; that "a new claim for reinstatement by the
employee in his petition is not sufficient to confer jurisdiction on the CIR if there is no averment made by
the employee in his petition that his dismissal was wrongful or illegal and that to allow such an anomalous
situation, i.e. the conferment of jurisdiction on the CIR by mere claim of reinstatement in the petition
without questioning the validity of the dismissal "would practically leave the matter of jurisdiction of the
court at the mercy of the whims and caprices of the employee" and is "violative of the well-established
rule that money claims in cases where the employer-employee relationship is, terminated and no
reinstatement is sought, already fall within the jurisdiction of the regular courts."

We held in Sy Huan v. Bautista 9 that —

The jurisdiction of the Court of Industrial Relations under the law and ... jurisprudence extends only to
cases involving — (a) labor disputes affecting an industry which is indispensable to the national interest
and is so certified by the President to the Court, Section 10, Republic Act No. 875; (b) controversy about
the Minimum Wage Law, Republic Act No. 602; (c) hours of employment under the Eight-Hour Labor Law,
Commonwealth Act No. 444; and (d) unfair labor practice, Sec. 5-(a) Republic Act No. 875," citing cases.
10

We further held in the same case that —

... such disputes and controversies ... must arise while the employer-employee relationship between the
parties exists, or the employee seeks reinstatement. When such relationship is over and the employee
does not seek reinstatement, all claims become money claims that fall under the jurisdiction of the regular
courts," also citing cases. 11

In the particular case of Price Stabilization Corporation v. Court of Industrial Relations, et al., 12 We held
that —

... where the employer-employee relationship is still existing or is sought to be reestablished

because of its wrongful severance (as where the employee seeks reinstatement) the Court of Industrial
Relations has jurisdiction over all claims arising out of, or in connection with employment, such as those
related to the Minimum Wage Law and the Eight-Hour Labor Law. After the termination of the relationship
and no reinstatement is sought, such claims become mere money claims, and come within the jurisdiction
of the regular courts. (Emphasis supplied.)

In the case at bar, allegations were made by Lopez in the petition claiming, inter alia, the right to
be reinstated to his former work, with back wages ... on the basis of which allegations, the
jurisdiction asserted by the CIR appears to be in accord with Sy Huan v. Bautista and Price
Stabilization Corporation v. Court of Industrial Relations, et al. supra.

And the records sustain that the dismissal of Lopez was not wrongful. It is not controverted that his
employment with petitioners was without a definite period. Under R.A. No. 1052 (otherwise known as the
Termination Pay Law), an employee may be dismissed by the employer without just cause by serving at
least one month advance notice to the employee, or by giving the said employee one-half month for every
year of service of the employee, whichever is longer, a fraction of at least six months being considered as
one whole year." William Lines contend that Lopez was duly notified of the termination. Although
disputed, the question of actual notice becomes immaterial in view of William Line’s compliance
with the alternative requirement, as found by the CIR, that Lopez accepted separation pay in the
amount of P1,586.00. Additionally, the CIR also found that there was no substantial evidence to show
that the dismissal was illegal. Since the burden of proof of illegal dismissal devolved upon claimant-
Lopez himself, his failure to discharge this burden defeats his allegation that he was illegally dimissed. In
the absence of such proof, there is no basis for the CIR to order the reinstatement of claimant-
respondent. Thus, under the circumstances, that court (now defunct) could not have lawfully directed the
reinstatement of claimant-respondent even if it had jurisdiction over the subject matter of this action.

Section 1. In cases of employment, without a definite period, in a commercial. industrial. or agricultural

establishment or enterprise, the employer or the employee may eliminate at any time the employment
with just cause; or without just cause in the case of an employee by serving notice on the employer at
least one month in advance, or in the case of an employer, by serving such notice to the employee at
least one month in advance or one-half month for every year of service of the employee, whichever is
longer, a fraction of at least six months being considered as one whole year.

And, having concluded that no right to reinstatement exists, it becomes unnecessary to resolve the third
issue — i.e. whether or not prescription and laches had set in to bar Lopez’ alleged right to be reinstated.

Issues Nos. 4 and 5 — With respect to the fourth issue, it is not true that there is no evidence to support
the CIR's finding that Lopez worked at an average of "no less than 10 hours a day, 2 hours more than the
maximum requirement specified on the Eight-Hour Labor Law."

Lopez’ testimony is to the effect that his main duties were — (a) to clean the storeroom and (b) to serve
food to the Passengers; that although there was "(N)o exact number of hours" for either of these duties,
he would "estimate" that 2 hours, more or less, were spent each time in cleaning the storeroom, morning
and afternoon, while 2 hours, more or less, were also needed to serve food, which he did 3 times a day —
at 4:30 a.m., 10:00 a.m. and 3 p.m.19 This clearly averaged 10 hours a day.

On the basis of the foregoing testimony, the trial court's finding that he had been working no less than 10
hours daily is justified. At any rate, doubts should be resolved in his favor to pursue the ends of the Eight-
Hour Labor Law (R.A. No. 444), as amended, which is a social legislation.

But, since Sec. 7-A of the Eight-Hour Labor Law allows the enforcement of an action " within three years
after the cause of action accrued, otherwise, such action shall be forever barred", Lopez can collect only
the overtime compensation for the 2 hours in excess of the regular 8 hours a day which accrued within 3
years immediately before the filing of the petition on March 17, 1964. Similar claims which accrued
prior to the 3-year period or before March 17, 1961 have already prescribed, and can no longer be
enforced in this action. However, since Lopez’ services were terminated on October 13, 1962, the
computation of the 2-hour daily overtime will cover the period from March 17, 1961 to October 13,
1962, or a period of 1 year, 6 months and 26 days, from which shall be excluded Sundays and
legal holidays based on the principle that being on board the vessel on these days were "part and
parcel of" and "inherent" in his work.