Labstandlaw - Part 7

8/10/2019 Labstandlaw - Part 7

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LABOR August 16, 2014

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SECOND DIVISION

[G.R. No. L-48437. September 30, 1986.]

MANTRADE/FMMC DIVISION EMPLOYEES AND WORKERS UNION (represented by PHILIPPINE SOCIALSECURITY LABOR UNIONPSSLU Fed.TUCP), Peti t ioner, v. ARBITRATOR FROILAN M. BACUNGAN

and MANTRADE DEVELOPMENT CORPORATION,Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; VOLUNTARY ARBITRATORS; DECISIONS SUBJECTTO JUDICIAL REVIEW. The contentions of respondent corporation have been ruled against in the decision ofthis court in the case of Oceanic Bic Division (FFW) v. Romero, promulgated on July 16, 1984, wherein it stated: .. . "A voluntary arbitrator by the nature of her functions acts in a quasijudicial capacity. There is no reason why herdecisions involving interpretation of law should be beyond this courts review. Administrative officials arepresumed to act in accordance with law and yet we do not hesitate to pass upon their work where a question oflaw is involved or where a showing of abuse of discretion in their officials acts is properly raised in petitionsfor certiorari." (130 SCRA 392, 399, 400-401)

2. ID.; ID.; GRANT FOR HOLIDAY PAY MONTHLY PAID EMPLOYEES; ISSUE SETTLED IN THE CASES OFINSULAR BANK OF ASIA AND AMERICA EMPLOYEES UNION VS. INCIONG, [132 SCRA 633], ANDCHARTERED BANK EMPLOYEES UNION VS. OPLE [141 SCRA 9]. Respondent arbitrator opined thatrespondent corporation does not have any legal obligation to grant its monthly salaried employees holiday pay,unless it is argued that the pertinent section of the Rule and Regulations implementing Section 94 of the LaborCode is not in conformity with the law, and thus, without force and effect. This issue was subsequently decided onOctober 24, 1984 by a division of this court in the case of Insular Bank of Asia and American Employees Union(IBAAEU) v. Inciong, wherein it held as follows: "We agree with petitioners contention that Section 2, Rule IV,Book III of the implementing rules and Policy Instruction No. 9 issued by the then Secretary of Labor are null andvoid since in the guise of clarifying the Labor Codes provisions on holiday pay, they in effect amended themenlarging the scope of their exclusion (p. 11, rec.). . . . "From the above-cited provisions, it is clear that monthlypaid employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday

pay promulgated by the then Secretary of Labor excludes monthly paid employees from the said benefits byinserting under Rule IV, Book III of the implementing rules, section 2, which provides that: employees who areuniformly paid by the month, irrespective of the number of working days therein , with the salary of not less thanthe statutory or established minimum wage shall be presumed to be paid for all days in the month whether workedor not." (132 SCRA 663, 672-673) This ruling was reiterated by the court en banc on August 28, 1985 in the caseof Chartered Bank Employees Association v. Ople, wherein it added that: "The questioned Sec. 2, Rule IV, BookIII of the Integrated Rules and the Secretarys Policy Instruction No. 9 add another excluded group, namelyemployees who are uniformly paid by the month. While additional exclusion is only in the form of a presumptionthat all monthly paid employees have already been paid holiday paid, it constitutes a taking away or a deprivationwhich must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of labormore than what the statute delimits or withholds is obviously ultra vires." (138 SCRA 273, 282. See also CBTCEmployees Union v. Clave, January 7, 1986, 141 SCRA 9.)

3. REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; APPROPRIATE EQUITABLE REMEDY IN CASEAT BAR. Respondent corporation contends that mandamus does not lie to compel the performance of an actwhich the law does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce acontractual obligation, the remedy being an action for specific performance (Province of Pangasinan v.Reparations Commission, November 29, 1977, 80 SCRA 376). In the case at bar, however, in view of the above-cited subsequent decisions of this Court clearly defining the legal duty to grant holiday pay to monthly salariedemployees, mandamus is an appropriate equitable remedy (Dionisio v. Paterno, July 23, 1980, 98 SCRA 677;Gonzales v. Government Service Insurance System, September 10, 1981, 107 SCRA 492).


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D E C I S I O N

FERIA, J .

This is a petition for Certiorariand Mandamus filed by petitioner against arbitrator Froilan M. Bacungan andMantrade Development Corporation arising from the decision of respondent arbitrator, the dispositive part ofwhich reads as follows:jgc:chanrobles.com.ph

"CONSIDERING ALL THE ABOVE, We rule that Mantrade Development Corporation is not under legal obligationto pay holiday pay (as provided for in Article 94 of the Labor Code in the third official Department of Labor edition)to its monthly paid employees who are uniformly paid by the month, irrespective of the number of working daystherein, with a salary of not less than the statutory or established minimum wage, and this rule is applicable notonly as of March 2, 1976 but as of November 1, 1974."cralaw virtua1aw library

Petitioner questions the validity of the pertinent section of the Rules and Regulations Implementing the LaborCode as amended on which respondent arbitrator based his decision.

On the other hand, respondent corporation has raised procedural and substantive objections. It contends that

petitioner is barred from pursuing the present action in view of Article 263 of the Labor Code, which provides inpart that "voluntary arbitration awards or decisions shall be final, inappealable, and executory," as well as therules implementing the same; the pertinent provision of the Collective Bargaining Agreement between petitionerand respondent corporation; and Article 2044 of the Civil Code which provides that "any stipulation that thearbitrators award or decision shall be final, is valid, without prejudice to Articles 2038, 2039, and 2040."Respondent corporation further contends that the special civil action of certioraridoes not lie because respondentarbitrator is not an "officer exercising judicial functions" within the contemplation of Rule 65, Section 1, of theRules of Court; that the instant petition raises an error of judgment on the part of respondent arbitrator and not anerror of jurisdiction; that it prays for the annulment of certain rules and regulations issued by the Department ofLabor, not for the annulment of the voluntary arbitration proceedings; and that appeal by certiorariunder Section29 of the Arbitration Law, Republic Act No. 876, is not applicable to the case at bar because arbitration in labordisputes is expressly excluded by Section 3 of said law.chanrobles law library : red

These contentions have been ruled against in the decision of this Court in the case of Oceanic Bic Division (FFW)v. Romero, promulgated on July 16, 1984, wherein it stated:jgc:chanrobles.com.ph

"We agree with the petitioner that the decisions of voluntary arbitrators must be given the highest respect and asa general rule must be accorded a certain measure of finality. This is especially true where the arbitrator chosenby the parties enjoys the first rate credentials of Professor Flerida Ruth Pineda Romero, Director of the U.P. LawCenter and an academician of unquestioned expertise in the field of Labor Law. It is not correct, however, that thisrespect precludes the exercise of judicial review over their decisions. Article 262 of the Labor Code makingvoluntary arbitration awards final, inappealable and executory, except where the money claims exceedP100,000.00 or 40% of the paid-up capital of the employer or where there is abuse of discretion or grossincompetence refers to appeals to the National Labor Relations Commission and not to judicial review.

"In spite of statutory provisions making final the decisions of certain administrative agencies, we have taken

cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion, violationof due process, denial of substantial justice, or erroneous interpretation of the Law were brought to our attention. .. .

x x x

"A voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity. There is no reason why herdecisions involving interpretation of law should be beyond this Courts review. Administrative officials arepresumed to act in accordance with law and yet we do not hesitate to pass upon their work where a question of


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law is involved or where a showing of abuse of discretion in their official acts is properly raised in petitionsfor certiorari." (130 SCRA 392, 399, 400-401)

In denying petitioners claim for holiday pay, respondent arbitrator stated that although monthly salariedemployees are not among those excluded from receiving such additional pay under Article 94 of the Labor Codeof the Philippines, to wit:chanrobles virtual lawlibrary

ART. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays,except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paidcompensation equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, 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 ofDecember, and the day designated by law for holding a general election.

they appear to be excluded under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing saidprovision which reads thus:chanrob1es virtual 1aw library

SEC. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespectiveof the number of working days therein, with a salary of not less than the statutory or established minimum wageshall be presumed to be paid for all days in the month whether worked or not.

Respondent arbitrator further opined that respondent corporation does not have any legal obligation to grant itsmonthly salaried employees holiday pay, unless it is argued that the pertinent section of the Rules andRegulations implementing Section 94 of the Labor Code is not in conformity with the law, and thus, without forceand effect.

This issue was subsequently decided on October 24, 1984 by a division of this Court in the case of Insular Bankof Asia and America Employees Union (IBAAEU) v. Inciong, wherein it held as follows:jgc:chanrobles.com.ph

"WE agree with the petitioners contention that Section 2, Rule IV, Book III of the implementing rules and Policy

Instruction No. 9, issued by the then Secretary of Labor are null and void since in the guise of clarifying the LaborCodes provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion (p. 11,rec.)

"Article 94 of the Labor Code, as amended by P.D. 850, provides:chanrob1es virtual 1aw library

Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays,except in retail and service establishments regularly employing less than ten (10) workers . . .

"The coverage and scope of exclusion of the Labor Codes holiday pay provisions is spelled out under Article 82thereof which reads:chanrob1es virtual 1aw library

Art. 82. Coverage. The provision of this Title shall apply to employees in all establishments and undertakings,

whether for profit or not, but not to government employees, managerial employees, field personnel, members ofthe family of the employer who are dependent on him for support, domestic helpers, persons, in the personalservice of another, and workers who are paid by results as determined by the Secretary of Labor in appropriateregulations.

x x x

"From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits ofholiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor


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excludes monthly paid employees from the said benefits by inserting under Rule IV, Book III of the implementingrules, Section 2, which provides that: employees who are uniformly paid by the month, irrespective of the numberof working days therein, with a salary of not less than the statutory or established minimum wage shall bepresumed to be paid for all days in the month whether worked or not." (132 SCRA 663, 672-673).

This ruling was reiterated by the Court en banc on August 28, 1985 in the case of Chartered Bank EmployeesAssociation v. Ople, wherein it added that:chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

"The questioned Sec. 2, Rule IV, Book III of the Integrated Rules and the Secretarys Policy Instruction No. 9 addanother excluded group, namely employees who are uniformly paid by the month. While the additional exclusionis only in the form of a presumption 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 administrativeinterpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviouslyultra vires." (138 SCRA 273, 282. See also CBTC Employees Union v. , Clave, January 7, 1986, 141 SCRA 9.)

Lastly, respondent corporation contends that mandamus does not lie to compel the performance of an act whichthe law does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce a contractualobligation, the remedy being an action for specific performance (Province of Pangasinan v. ReparationsCommission, November 29, 1977, 80 SCRA 376). In the case at bar, however, in view of the above citedsubsequent decisions of this Court clearly defining the legal duty to grant holiday pay to monthly salaried

employees, mandamus is an appropriate equitable remedy (Dionisio v. Paterno, July 23, 1980, 98 SCRA 677;Gonzales v. Government Service Insurance System, September 10, 1981, 107 SCRA 492).

WHEREFORE, the questioned decision of respondent arbitrator is SET ASIDE and respondent corporation isordered to GRANT holiday pay to its monthly salaried employees. No costs.

SO ORDERED.

Fernan, Alampay, Gutierrez, Jr. and Paras, JJ., concur.

FIRST DIVISION

[G.R. No. 118289. December 13, 1999]

TRANS-ASIA PHILS. EMPLOYEES ASSOCIATION (TAPEA) and ARNEL GALVEZ , peti t ioners, vsNATIONAL LABOR RELATIONS COMMISSION, TRANS-ASIA (PHILS.) and ERNESTO S. DECASTRO, respondents.

D E C I S I O N

KAPUNAN, J .:

This petition for certiorariunder Rule 65 of the Rules of Court seeks to reverse and set aside theResolutions, dated 23 November 1993 and 13 September 1994 of the National Labor Relations Commission(NLRC) which dismissed petitioners appeal from the adverse decision of the labor arbiter and deniedpetitioners motion for reconsideration, respectively.


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The antecedents of this case are as follows:

On 7 July 1988, Trans-Asia Philippines Employees Association (TAPEA), the duly-recognized collectivebargaining agent of the monthly-paid rank-and-file employees of Trans-Asia (Phils.), entered into a CollectiveBargaining Agreement (CBA) with their employer. The CBA, which was to be effective from 1 April 1988 up to31 March 1991, provided for, among others, the payment of holiday pay with a stipulation that if an employee ispermitted to work on a legal holiday, the said employee will receive a salary equivalent to 200% of the regular

daily wage plus a 60% premium pay.

Despite the conclusion of the CBA, however, an issue was still left unresolved with regard to the claim ofTAPEA for payment of holiday pay covering the period from January of 1985 up to December of 1987. Thus, theparties underwent preventive mediation meetings with a representative from the National Mediation andConciliation Board in order to settle their disagreement on this particular issue. Since the parties were not able toarrive at an amicable settlement despite the conciliation meetings, TAPEA, led by its President, petitioner ArnieGalvez, filed a complaint before the labor arbiter, on 18 August 1988, for the payment of their holiday pay inarrears. On 18 September 1988, petitioners amended their complaint to include the payment of holiday pay fothe duration of the recently concluded CBA (from 1988 to 1991), unfair labor practice, damages and attorneysfees.

In their Position Paper, petitioners contended that their claim for holiday pay in arrears is based on the non-inclusion of the same in their monthly pay. In this regard, petitioners cited certain circumstances which, according

to them, would support their claim for past due holiday pay. First, petitioners presented Trans-Asias EmployeesManual which requires, as a pre-condition for the payment of holiday pay, that the employee should have workedor was on authorized leave with pay on the day immediately preceding the legal holiday. Petitioners argued thaif the intention [of Trans-Asia] was not to pay holiday pay in addition to the employees monthly pay, then therewould be no need to impose or specify the pre-condition for the payment.[1]Second, petitioners proffered asevidence their appointment papers which do not contain any stipulation on the inclusion of holiday pay in theirmonthly salary. According to petitioners, the absence of such stipulation is an indication that the mandatedholiday pay is not incorporated in the monthly salary. Third, petitioners noted the inclusion of a provision in theCBA for the payment of an amount equivalent to 200% of the regular daily wage plus 60% premium pay toemployees who are permitted to work on a regular holiday. Petitioners claimed that this very generous provisionwas the remedy availed of by Trans-Asia to allow its employees to recoup the holiday pay in arrears and, as such,is a tacit admission of the non-payment of the same during the period prior to the current CBA.

Finally, petitioners cited the current CBA provision which obligates Trans-Asia to give holidaypay. Petitioners asserted that this provision is an acknowledgment by Trans-Asia of its failure to pay the same inthe past since, if it was already giving holiday pay prior to the CBA, there was no need to stipulate on the saidobligation in the current CBA.

With regard to the claim for the payment of holiday pay for the duration of the CBA, the accusation of unfairlabor practice and the claim for damages and attorneys fees, petitioners asserted that Trans -Asia is guilty of badfaith in negotiating and executing the current CBA since, after it recognized the right of the employees to receiveholiday pay, Trans-Asia allegedly refused to honor the CBA provision on the same.

In response to petitioners contentions, Trans-Asia refuted the same in seriatim. With regard to the precondition for the payment of holiday pay stated in the Employees Manual and t he absence of a stipulation onholiday pay in the employees appointment papers, Trans-Asia asserted that the above circumstances are notindicative of its non-payment of holiday pay since it has always honored the labor law provisions on holiday payby incorporating the same in the payment of the monthly salaries of its employees. In support of this claimTrans-Asia pointed out that it has long been the standing practice of the company to use the divisor of 286 daysin computing for its employees overtime pay and daily rate deductions for absences. Trans-Asia explained thathis divisor is arrived at through the following formula:

52 x 44---------- = 286 days

8

Where: 52 = number of weeks in a year
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44 = number of work hours per week

8 = number of work hours per day

Trans-Asia further clarified that the 286 days divisor already takes into account the ten (10) regular holidays in ayear since it only subtracts from the 365 calendar days the unworked and unpaid 52 Sundays and 26 Saturdays

(employees are required to work half-day during Saturdays). Trans-Asia claimed that if the ten (10) regularholidays were not included in the computation of their employees monthly salary, the divisor which they wouldhave used would only be 277 days which is arrived at by subtracting 52 Sundays, 26 Saturdays and the 10 Legaholidays from 365 calendar days. Furthermore, Trans-Asia explained that the 286 days divisor is based onRepublic Act No. 6640,[2]wherein the divisor of 262 days (composed of the 252 working days and the 10 legaholidays) is used in computing for the monthly rate of workers who do not work and are not considered paid onSaturdays and Sundays or rest days. According to Trans-Asia, if the additional 26 working Saturdays in a year isfactored-in to the divisor provided by Republic Act No. 6640, the resulting divisor would be 286 days.

On petitioners contention with regard to the CBA provision on the allegedly generous holiday pay rate of260%, Trans-Asia explained that this holiday pay rate was included in the CBA in order to comply with Section 4Rule IV, Book III of the Omnibus Rules Implementing the Labor Code. The aforesaid provision reads:

Sec. 4. Compensation for holiday work.Any employee who is permitted or suffered to work on any regularholiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular dailywage. If the holiday falls on the scheduled rest day of the employee, he shall be entitled to an additional premiumpay of at least 30% of his regular holiday rate of 200% based on his regular wage rate.

On the contention that Trans-Asias acquiescence to the inclusion of a holiday pay provision in the CBA is anadmission of non-payment of the same in the past, Trans-Asia reiterated that it is simply a recognition of themandate of the Labor Code that employees are entitled to holiday pay. It clarified that the companys firm belief inthe payment of holiday pay to employees led it to agree to the inclusion of the holiday pay provision in the CBA.

With regard to the accusation of unfair labor practice because of Trans-Asias act of allegedly bargaining inbad faith and refusal to give holiday pay in accordance with the CBA, Trans-Asia explained that what petitionerswould like the company to do is to give double holiday pay since, as previously stated, the company has alreadyincluded the same in its employees monthly salary and, yet, petitioners want it to pay a second set of holiday pay.

On 13 February 1989, the labor arbiter rendered a decision dismissing the complaint, to wit:

After considering closely the arguments of the parties in support of their respective claims and defenses, thisBranch upholds a different view from that espoused by the complainants.

Just like in the Chartered Bank Case (L-44717), August 28, 1985, 138 SCRA 273, which is cited by thecomplainants in their Position Paper, there appears to be no clear agreement between the parties in the instantcase, whether verbal or in writing, that the monthly salary of the employees included the mandated holiday pay. Inthe absence of such agreement, the Supreme Court in said Chartered Bank Case took into consideration existingpractices in the bank in resolving the issue, such as employment by the bank of a divisor of 251 days which is theresult of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar daysin a year. Further, the Court took note of the fact that the bank used conflicting or different divisors in computing

salary-related benefits as well as the employees absence from work. In the case at bar, not only did the CBAbetween the complainants and respondents herein provides (sic) that the ten (10) legal holidays are recognizedby the Company as full holiday with pay. What is more, there can be no doubt that since 1977 up to the executionof the CBA, the Trans-Asia, unlike that obtaining in the Chartered Bank Case, never used conflicting or differentdivisors but consistently employed the divisor of 286 days, which as earlier pointed out, was arrived at bysubtracting only the unworked 52 Sundays and the 26 half-day-worked Saturdays from the total number of days ina year. The consistency in the established practice of the Trans-Asia, which incidentally is not disputed bycomplainants, did not give rise to any doubt which could have been resolved in favor of complainants.
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Besides, the respondents unlike the respondent bank in the Chartered Bank Employees Association vs. Hon. BlasF. Ople, et al. (supra) citing also the case of IBAAEU vs. Hon,. Amado Inciong (132 SCRA 663) which case have(sic) invalidated Section 2, Rule IV, Book III of the Implementing Rules of the Labor Code and Policy InstructionNo. 9, have never relied on the said invalidated rule and Policy Instruction.

The complainants arguments and juxtapositions in claiming that they were denied payment of their holiday pay

paled in the face of the prevailing company practices and circumstances abovestated.

Also, for the reasons adverted to above, the complainants charge of unfair labor practice claiming thatrespondents in bad faith refused to comply with their contractual obligation under the CBA by not paying thecomplainants holiday pay, must fail. Since respondents have nothing more to pay by way of legal holiday pay asit has already been included in their monthly salaries, the provision in the CBA relative to holiday pay is just but arecognition of the complainants right to payment of legal holiday pay as mandated by the Labor Code.

WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered dismissing thecomplaint for lack of merit.

SO ORDERED.[3]

Petitioners appealed to the National Labor Relations Commission. In its Resolution, dated 23 November1993, the NLRC dismissed the appeal and affirmed the decision of the labor arbiter, to wit:

We find no cogent reason to change or disturb the decision appealed from, the same being substantiallysupported by the facts and evidence on record. "It is a well-settled rule that findings of facts of administrativebodies, if based on substantial evidence are controlling on the reviewing authority. (Planters Products, Inc. vs.NLRC, G. R. No. 78524 & 78739, January 20, 1989; 169 SCRA 328).

We find no abuse of discretion and/or error in the assailed decision.

WHEREFORE, the appeal are (sic) hereby DISMISSED for lack of merit and the decision appealed from isAFFIRMED.

SO ORDERED.[4]

Petitioners motion for reconsideration was, likewise, denied by the NLRC in its Resolution, dated 13September 1994.

Petitioners are now before us faulting the NLRC with the following assignment of errors:

I

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN UPHOLDING THE LABORARBITERS DECISION DESPITE THE LACK OF SUBSTANTIAL EVIDENCE TO SUPPORT IT

II

IN UPHOLDING THE LABOR ARBITERS DECISION DESPITE THE LACK OF SUBSTANTIAL EVIDENCETO SUPPORT IT, PUBLIC RESPONDENT NLRC VIOLATED THE CONSTITUTIONAL AND LEGALMANDATE TO RESOLVE ALL DOUBTS IN SOCIAL LEGISLATION IN FAVOR OF LABOR.[5]

Petitioners, in furtherance of their first assignment of error, assert that the NLRC blatantly an unshamedlydisregarded the numerous evidence in support of their claim and relied merely on the sole evidence presented byTrans-Asia, the 286 days divisor, in dismissing their appeal and, in so doing, is guilty of grave abuse odiscretion.[6]
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We do not agree.

Trans-Asias inclusion of holiday pay in petitioners monthly salary is clearly established by its consistent useof the divisor of 286 days in the computation of its employees benefits and deductions. The use by Trans-Asiaof the 286 days divisor was never disputed by petitioners. A simple application of mathematics would reveathat the ten (10) legal holidays in a year are already accounted for with the use of the said divisor. As explainedby Trans-Asia, if one is to deduct the unworked 52 Sundays and 26 Saturdays (derived by dividing 52 Saturdays

in half since petitioners are required to work half-day on Saturdays) from the 365 calendar days in a year, theresulting divisor would be 286 days (should actually be 287 days). Since the ten (10) legal holidays were neveincluded in subtracting the unworked and unpaid days in a calendar year, the only logical conclusion would bethat the payment for holiday pay is already incorporated into the said divisor. Thus, when viewed against this veryconvincing piece of evidence, the arguments put forward by petitioners to support their claim of non-payment ofholiday pay, i.e., the pre-condition stated in the Employees Manual for entitlement to holiday pay, the absence ofa stipulation in the employees appointment papers for the inclusion of holiday pay in their monthly salary, thestipulation in the CBA recognizing the entitlement of the petitioners to holiday pay with a concomitant provision forthe granting of an allegedly very generous holiday pay rate, would appear to be merely inferences andsuppositions which, in the apropos words of the labor arbiter, paled in the face of the prevailing co mpanypractices and circumstances abovestated.

Hence, it is on account of the convincing and legally sound arguments and evidence of Trans-Asia that thelabor arbiter rendered a decision adverse to petitioners. Acknowledging that the decision of the labor arbiter wasbased on substantial evidence, the NLRC affirmed the formers disposition. It is also with this acknowledgmenthat the Court affirms the questioned resolutions of the NLRC. As aptly put by the Solicitor General, citing SunseView Condominium Corporation vs. NLRC,[7]findings of fact of administrative bodies should not be disturbed inthe absence of grave abuse of discretion or unless the findings are not supported by substantial evidence.[8]Inthis regard, the Solicitor General observed: As said above, public respondent acted on the basis of substantiaevidence, hence, grave abuse of discretion is ruled out.

[9]

However, petitioners insist that the agreement of Trans-Asia in the CBA to give a generous 260% holidaypay rate to employees who work on a holiday is conclusive proof that the monthly pay of petitioners does notinclude holiday pay.[10]Petitioners cite as basis the case of Chartered Bank Employees Association vsOple,[11]which reads:

Any remaining doubts which may arise from the conflicting or different divisors used in the computation of

overtime pay and employees absences are resolved by the manner in which work actually rendered on holidaysis paid. Thus, whenever monthly paid employees work on a holiday, they are given an additional 100% base payon top of a premium pay of 50%. If the employees monthly pay already includes their salaries for holidays, theyshould be paid only premium pay but not both base pay and premium pay.[12]

We are not convinced. The cited case cannot be relied upon by petitioners since the facts obtaining inthe Chartered Bankcase are very different from those in the present case. In the Chartered Bankcase, the bankused different divisors in computing for its employees benefits and deductions. For computing overtimecompensation, the bank used 251 days as its divisor. On the other hand, for computing deductions due toabsences, the bank used 365 days as divisor. Due to this confusing situation, the Court declared that thereexisted a doubt as to whether holiday pay is already incorporated in the employees monthly salary. Since doubtsshould be resolved in favor of labor, the Court in the Chartered Bankcase ruled in favor of the employees andfurther stated that its conclusion is fortified by the manner in which the employees are remunerated for work

rendered on holidays. In the present case, however, there is no confusion with regard to the divisor used byTrans-Asia in computing for petitioners benefits and deductions. Trans-Asia consistently used a 286 daysdivisor for all its computations.

Nevertheless, petitioners cause is not entirely lost. The Court notes that there is a need to adjust the divisoused by Trans-Asia to 287 days, instead of only 286 days, in order to properly account for the entirety of regularholidays and special days in a year as prescribed by Executive Order No. 203[13]in relation to Section 6 of theRules Implementing Republic Act 6727.[14]

Section 1 of Executive Order No. 203 provides:
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SECTION 1. Unless otherwise modified by law, order or proclamation, the following regular holidays and specialdays shall be observed in the country:

A. Regular HolidaysNew Years Day - January 1Maundy Thursday - Movable Date

Good Friday - Movable DateAraw ng Kagitingan - April 9(Bataan and Corregidor Day)Labor Day - May 1Independence Day - June 12National Heroes Day - Last Sunday of AugustBonifacio Day - November 30Christmas Day - December 25Rizal Day - December 30B. Nationwide Special DaysAll Saints Day - November 1Last Day of the Year - December 31

On the other hand, Section 6 of the Implementing Rules and Regulations of Republic Act No. 6727 provides:

Section 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum Wage Rates.- Withoutprejudice from existing company practices, agreements or policies, the following formulas may be used as guidesin determining the equivalent monthly statutory minimum wage rates:

x x x x x x x x x

d) For those who do not work and are not considered paid on Saturdays and Sundays or rest days:

Equivalent Monthly = Average Daily Wage Rate x 262 daysRate (EMR) 12

Where 262 days =

250 daysOrdinary working days

10 daysRegular holidays

2 daysSpecial days (If considered paid; if actually worked, this is equivalent to 2.6 days)-----------

262 daysTotal equivalent number of days

Based on the above, the proper divisor that should be used for a situation wherein the employees do notwork and are not considered paid on Saturdays and Sundays or rest days is 262 days. In the present case, since

the employees of Trans-Asia are required to work half-day on Saturdays, 26 days should be added to the divisorof 262 days, thus, resulting to 288 days. However, due to the fact that the rest days of petitioners fall on aSunday, the number of unworked but paid legal holidays should be reduced to nine (9), instead of ten (10), sinceone legal holiday under E.O. No. 203 always falls on the last Sunday of August, National Heroes Day. Thus, thedivisor that should be used in the present case should be 287 days.

However, the Court notes that if the divisor is increased to 287 days, the resulting daily rate for purposes ofovertime pay, holiday pay and conversions of accumulated leaves would be diminished. To illustrate, if anemployee receives P8,000.00 as his monthly salary, his daily rate would be P334.49, computed as follows:


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P8,000.00 x 12 months------------------------- = P334.49/day

287 days

Whereas if the divisor used is only 286 days, the employees daily rate would be P335.66, computed as follows:

P8,000.00 x 12 months------------------------ = P335.66/day286 days

Clearly, this muddled situation would be violative of the proscription on the non-diminution of benefits undeSection 100 of the Labor Code. On the other hand, the use of the divisor of 287 days would be to the advantageof petitioners if it is used for purposes of computing for deductions due to the employees absences. In view othis situation, the Court rules that the adjusted divisor of 287 days should only be used by Trans-Asia forcomputations which would be advantageous to petitioners, i.e., deductions for absences, and not forcomputations which would diminish the existing benefits of the employees, i.e., overtime pay, holiday and leaveconversions.

For their second assignment of error, petitioners argue that, since they provided the NLRC withoverwhelming proof of their claim against Trans-Asia, the least that the NLRC could have done was to declarethat there existed an ambiguity with regard to Trans-Asias payment of holiday pay. Petitioners then posits that ithe NLRC had only done so, this ambiguity would have been resolved in their favor because of the constitutionalmandate to resolve doubts in favor of labor.

We are not persuaded. As previously stated, the decision of the labor arbiter and the resolutions of theNLRC were based on substantial evidence and, as such, no ambiguity or doubt exists which could be resolved inpetitioners favor.

WHEREFORE, premises considered, the Resolutions of the NLRC, dated 23 November 1993 and 13September 1994, are hereby AFFIRMED with the MODIFICATION that Trans-Asia is hereby ordered to adjust itsdivisor to 287 days and pay the resulting holiday pay in arrears brought about by this adjustment starting from 30June 1987, the date of effectivity of E.O. No. 203.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Pardo, andYnares-Santiago, JJ., concur.

[1] Position Paper of Complainants, Records, p. 22.[2] An Act Providing For An Increase In the Wage Of Public Or Government Sector On A Daily Wage Basis And InThe Statutory Minimum Wage And Salary Rates of Employees And Workers In The Private Sector And For OtherPurposes.[3] Decision, Rollo, pp. 35-37.[4] Resolution, Id., at 29-30.[5] Petition, Id., at 12-13.[6]

Id.,at 17.[7] 228 SCRA 466 (1993).[8] Comment of Solicitor General, Rollo, p. 79.[9]

Ibid.[10]

Supra, note 5 at 15.[11] 138 SCRA 273 (1985).[12]

Id., at 283.[13] Providing A List Of Regular Holidays And Special Days To Be Observed Throughout the Philippines And ForOther Purposes.[14] Wage Rationalization Act.
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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 114698 July 3, 1995

WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION, petitioner,vs.CRESENCIANO B. TRAJANO, Under-Secretary of Labor and Employment, ELMER ABADILLA, and 34others, respondents.

NARVASA, C.J.:

The basic issue raised by petitioner in this case is, as its counsel puts it, "whether or not a monthly-paidemployee, receiving a fixed monthly compensation, is entitled to an additional pay aside from his usual holidaypay, whenever a regular holiday falls on a Sunday."

The case arose from a routine inspection conducted by a Labor Enforcement Officer on August 6, 1991 of theWellington Flour Mills, an establishment owned and operated by petitioner Wellington Investment andManufacturing Corporation (hereafter, simply Wellington). The officer thereafter drew up a report, a copy of whichwas "explained to and received by" Wellington's personnel manager, in which he set forth his finding of "(n)on-payment of regular holidays falling on a Sunday for monthly-paid employees." 1

Wellington sought reconsideration of the Labor Inspector's report, by letter dated August 10, 1991. It argued that"the monthly salary of the company's monthly-salaried employees already includes holiday pay for all regular

holidays . . . (and hence)there is no legal basis for the finding of alleged non-payment of regular holidays fallingon a Sunday."2It expounded on this thesis in a position paper subsequently submitted to the Regional Director,asserting that it pays its monthly-paid employees a fixed monthly compensation "using the 314 factor whichundeniably covers and already includes payment for all the working days in a month as well as all the 10unworked regular holidays within a year."3

Wellington's arguments failed to persuade the Regional Director who, in an Order issued on July 28, 1992, ruledthat "when a regular holiday falls on a Sunday, an extra or additional working day is created and the employer hasthe obligation to pay the employees for the extra day except the last Sunday of August since the payment for thesaid holiday is already included in the 314 factor," and accordingly directed Wellington to pay its employeescompensation corresponding to four (4) extra working days.4

Wellington timely filed a motion for reconsideration of this Order of August 10, 1992, pointing out that it was in

effect being compelled to "shell out an additional pay for an alleged extra working day" despite its completepayment of all compensation lawfully due its workers, using the 314 factor. 5Its motion was treated as an appealand was acted on by respondent Undersecretary. By Order dated September 22, the latter affirmed thechallenged order of the Regional Director, holding that "the divisor being used by the respondent (Wellington)does not reliably reflect the actual working days in a year, " and consequently commanded Wellington to pay itsemployees the "six additional working days resulting from regular holidays falling on Sundays in 1988, 1989 and1990."6Again, Wellington moved for reconsideration, 7and again was rebuffed.8


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Wellington then instituted the special civil action of certiorariat bar in an attempt to nullify the orders abovementioned. By Resolution dated July 4, 1994, this Court authorized the issuance of a temporary restraining orderenjoining the respondents from enforcing the questioned orders. 9

Every worker should, according to the Labor Code, 10"be paid his regular daily wage during regular holidays,except in retail and service establishments regularly employing less than ten (10) workers;" this, of course, even if

the worker does no work on these holidays. The regular holidays include: "New Year's Day, Maundy Thursday,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 of December, and the day designated by law for holding a general election (or national referendumor plebiscite).11

Particularly as regards employees "who are uniformly paid by the month, "the monthly minimum wage shall not beless than the statutory minimum wage multiplied by 365 days divided by twelve." 12This monthly salary shall serveas compensation "for all days in the month whether worked or not," and "irrespective of the number of workingdays therein."13In other words, whether the month is of thirty (30) or thirty-one (31) days' duration, or twenty-eight(28) or twenty-nine (29) (as in February), the employee is entitled to receive the entire monthly salary. So, too, inthe event of the declaration of any special holiday, or any fortuitous cause precluding work on any particular dayor days (such as transportation strikes, riots, or typhoons or other natural calamities), the employee is entitled tothe salary for the entire month and the employer has no right to deduct the proportionate amount corresponding to

the days when no work was done. The monthly compensation is evidently intended precisely to avoidcomputations and adjustments resulting from the contingencies just mentioned which are routinely made in thecase of workers paid on daily basis.

In Wellington's case, there seems to be no question that at the time of the inspection conducted by the LaborEnforcement Officer on August 6, 1991, it was and had been paying its employees "a salary of not less than thestatutory or established minimum wage," and that the monthly salary thus paid was "not . . . less than thestatutory minimum wage multiplied by 365 days divided by twelve," supra. There is, in other words, no issue thatto this extent, Wellington complied with the minimum norm laid down by law.

Apparently the monthly salary was fixed by Wellington to provide for compensation for every working day of theyear including the holidays specified by law and excluding only Sundays. In fixing the salary, Wellington usedwhat it calls the "314 factor;" that is to say, it simply deducted 51 Sundays from the 365 days normally comprising

a year and used the difference, 314, as basis for determining the monthly salary. The monthly salary thus fixedactually covers payment for 314 days of the year, including regular and special holidays, as well as days when nowork is done by reason of fortuitous cause, as above specified, or causes not attributable to the employees.

The Labor Officer who conducted the routine inspection of Wellington discovered that in certain years, two orthree regular holidays had fallen on Sundays. He reasoned that this had precluded the enjoyment by theemployees of a non-working day, and the employees had consequently had to work an additional day for thatmonth. This ratiocination received the approval of his Regional Director who opined 14that "when a regularholiday falls on a Sunday, an extra or additional working day is created and the employer has the obligation to payits employees for the extra day except the last Sunday of August since the payment for the said holiday is alreadyincluded in the 314 factor."15

This ingenuous theory was adopted and further explained by respondent Labor Undersecretary, to whom the

matter was appealed, as follows:16

. . . By using said (314) factor, the respondent (Wellington) assumes that all the regular holidaysfell on ordinary days and never on a Sunday. Thus, the respondent failed to consider thecircumstance that whenever a regular holiday coincides with a Sunday, an additional working dayis created and left unpaid. In other words, while the said divisor may be utilized as proofevidencing payment of 302 working days, 2 special days and the ten regular holidays in acalendar year, the same does not cover or include payment of additional working days created asa result of some regular holidays falling on Sundays.


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He pointed out that in 1988 there was "an increase of three (3) working days resulting from regular holidays fallingon Sundays;" hence Wellington "should pay for 317 days, instead of 314 days." By the same process ofratiocination, respondent Undersecretary theorized that there should be additional payment by Wellington to itsmonthly-paid employees for "an increment of three (3) working days" for 1989 and again, for 1990. What he issaying is that in those years, Wellington should have used the "317 factor," not the "314 factor."

The theory loses sight of the fact that the monthly salary in Wellington which is based on the so-called "314factor" accounts for all365 days of a year; i.e., Wellington's "314 factor" leaves no day unaccounted for; it ispaying for all the days of a year with the exception only of 51 Sundays.

The respondents' theory would make each of the years in question (1988, 1989, 1990), a year of 368 days.Pursuant to this theory, no employer opting to pay his employees by the month would have any definite basis todetermine the number of days in a year for which compensation should be given to his work force. He would haveto ascertain the number of times legal holidays would fall on Sundays in all the years of the expected orextrapolated lifetime of his business. Alternatively, he would be compelled to make adjustments in his employees'monthly salaries every year, depending on the number of times that a legal holiday fell on a Sunday.

There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set byhim to take account of legal holidays falling on Sundays in a given year, or, contrary to the legal provisions

bearing on the point, otherwise to reckon a year at more than 365 days. As earlier mentioned, what the lawrequires of employers opting to pay by the month is to assure that "the monthly minimum wage shall not be lessthan the statutory minimum wage multiplied by 365 days divided by twelve," 17and to pay that salary "for all daysin the month whether worked or not," and "irrespective of the number of working days therein." 18That salary isdue and payable regardless of the declaration of any special holiday in the entire country or a particular placetherein, or any fortuitous cause precluding work on any particular day or days (such as transportation strikes,riots, or typhoons or other natural calamities), or cause not imputable to the worker. And as also earlier pointedout, the legal provisions governing monthly compensation are evidently intended precisely to avoid re-computations and alterations in salary on account of the contingencies just mentioned, which, by the way, areroutinely made between employer and employees when the wages are paid on daily basis.

The public respondents argue that their challenged conclusions and dispositions may be justified by Section 2,Rule X, Book III of the Implementing Rules, giving the Regional Director power 19

. . . to order and administer (in cases where employer-employee relations still exist), after duenotice and hearing, compliance with the labor standards provisions of the Code and the otherlabor legislations based on the findings of their Regulations Officers or Industrial SafetyEngineers (Labor Standard and Welfare Officers) and made in the course of inspection, and toissue writs of execution to the appropriate authority for the enforcement of his order, in line withthe provisions of Article 128 in relation to Articles 289 and 290 of the Labor Code, as amended. . ..

The respondents beg the question. Their argument assumes that there are some "labor standards provisions ofthe Code and the other labor legislations" imposing on employers the obligation to give additional compensationto their monthly-paid employees in the event that a legal holiday should fall on a Sunday in a particular month with which compliance may be commanded by the Regional Director when the existence of said provisions is

precisely the matter to be established.

In promulgating the orders complained of the public respondents have attempted to legislate, or interpret legalprovisions in such a manner as to create obligations where none are intended. They have acted without authority,or at the very least, with grave abuse of their discretion. Their acts must be nullified and set aside.

WHEREFORE, the orders complained of, namely: that of the respondent Undersecretary dated September 22,1993, and that of the Regional Director dated July 30, 1992, are NULLIFIED AND SET ASIDE, and theproceeding against petitioner DISMISSED.


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SO ORDERED.Regalado, Puno and Mendoza, JJ., concur.

Footnotes1 Rollo, pp. 13-24, 119; Annex D, petition.2 Id., pp. 14, 119; Annex E, petition. It maintains that "there is no law which orders the payment oan extra working day whenever a regular holiday falls on a Sunday." Rollo, p. 20.3 Id., pp. 5, 16, 119-120.4 Id., pp. 14-15, 120; Annex A, petition.5 Id., pp. 15, Annex F, petition.6 Id., pp. 16, 120-121; Annex B, petition.7 Id., pp. 16, 121; Annex G, petition.8 Id., pp. 16, 121; Annex C, petition (Order dtd. Feb. 24, 1994).9 Rollo, pp. 61-79.10 Article 94.11 "If the employer requires an employee to work on any holiday, he shall pay such employee "acompensation equivalent to twice his regular rate." And, according to the Omnibus RulesImplementing the Labor Code, 11 if "the holiday work falls on the scheduled rest day of theemployee, he shall be entitled to an additional premium pay of at least 30% of his regular holidayrate of 200% based on his regular wage rate." The Omnibus Rules further provide (Sec. 9) that "A

regular holiday falling on the employee's rest day shall be compensated accordingly . . . andwhere a regular holiday falls on a Sunday, the following day shall be considered a special holidayfor purposes of the Labor Code, unless said day is also a regular holiday."12 Sec. 1, Omnibus Rules Implementing the Labor Code.13 Ibid.14 Annex A, petition; SEE footnote 4, supra.15 "(T)he last Sunday of August being a regular holiday under Executive OrderNo. 203."16 Annex B, petition; SEE footnote 6, supra, and rollo, pp. 38-39.17 Sec. 1, Omnibus Rules Implementing the Labor Code.18 Ibid.19 Rollo, pp. 121-122.


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FIRST DIVISION

[G.R. No. 146775. January 30, 2002]

SAN MIGUEL CORPORATION, peti t ioner, vs. THE HONORABLE COURT OF APPEALS-FORMERTHIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE M. ESPAOL, JR., Hon. CRESENCIANOB. TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M. MACARAYA, respondents.

D E C I S I O N

KAPUNAN, J.:

Assailed in the petition before us are the decision, promulgated on 08 May 2000, and the resolutionpromulgated on 18 October 2000, of the Court of Appeals in CA G.R. SP-53269.

The facts of the case are as follows:

On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District Office, conducted aroutine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course othe inspection, it was discovered that there was underpayment by SMC of regular Muslim holiday pay to itsemployees. DOLE sent a copy of the inspection result to SMC and it was received by and explained to itspersonnel officer Elena dela Puerta.[1]SMC contested the findings and DOLE conducted summary hearings on 19November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof that it was payingregular Muslim holiday pay to its employees. Hence, Alan M. Macaraya, Director IV of DOLE Iligan District Officeissued a compliance order, dated 17 December 1993, directing SMC to consider Muslim holidays as regularholidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receiptof the order.

SMC appealed to the DOLE main office in Manila but its appeal was dismissed for having been filedlate. The dismissal of the appeal for late filing was later on reconsidered in the order of 17 July 1998 after it wasfound that the appeal was filed within the reglementary period. However, the appeal was still dismissed for lack ofmerit and the order of Director Macaraya was affirmed.

SMC went to this Court for relief viaa petition for certiorari, which this Court referred to the Court of Appealspursuant toSt. Martin Funeral Homes vs. NLRC.[2]

The appellate court, in the now questioned decision, promulgated on 08 May 2000, ruled, as follows:

WHEREFORE, the Order dated December 17, 1993 of Director Macaraya and Order dated July 17, 1998 ofUndersecretary Espaol, Jr. is hereby MODIFIED with regards the payment of Muslim holiday pay from 200% to150% of the employee's basic salary. Let this case be remanded to the Regional Director for the propercomputation of the said holiday pay.

SO ORDERED.[3]

Its motion for reconsideration having been denied for lack of merit, SMC filed a petition for certioraribeforethis Court, alleging that:

PUBLIC RESPONDENTS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHENTHEY GRANTED MUSLIM HOLIDAY PAY TO NON-MUSLIM EMPLOYEES OF SMC-ILICOCO ANDORDERING SMC TO PAY THE SAME RETROACTIVE FOR ONE (1) YEAR FROM THE DATE OF THE
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PROMULGATION OF THE COMPLIANCE ORDER ISSUED ON DECEMBER 17, 1993, IT BEING CONTRARYTO THE PROVISIONS, INTENT AND PURPOSE OF P.D. 1083 AND PREVAILING JURISPRUDENCE.

THE ISSUANCE OF THE COMPLIANCE ORDER WAS TAINTED WITH GRAVE ABUSE OF DISCRETION INTHAT SAN MIGUEL CORPORATION WAS NOT ACCORDED DUE PROCESS OF LAW; HENCE, THEASSAILED COMPLIANCE ORDER AND ALL SUBSEQUENT ORDERS, DECISION AND RESOLUTION OF

PUBLIC RESPONDENTS WERE ALL ISSUED WITH GRAVE ABUSE OF DISCRETION AND ARE VOID ABINITIO.

THE HON. COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT DECLARED THATREGIONAL DIRECTOR MACARAYA, UNDERSECRETARY TRAJANO AND UNDERSECRETARY ESPAOL,JR., WHO ALL LIKEWISE ACTED WITH GRAVE ABUSE OF DISCRETION AND WITHOUT OR IN EXCESS OFTHEIR JURISDICTION, HAVE JURISDICTION IN ISSUING THE ASSAILED COMPLIANCE ORDER ANDSUBSEQUENT ORDERS, WHEN IN FACT THEY HAVE NO JURISDICTION OR HAS LOST JURISDICTIONOVER THE HEREIN LABOR STANDARD CASE.[4]

At the outset, petitioner came to this Court viaa petition for certiorari under Rule 65 instead of an appeaunder Rule 45 of the 1997 Rules of Civil Procedure. InNational Irrigation Administration vs. Court oAppeals,

[5]the Court declared:

x x x (S)ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committedby it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and notby a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and thedecision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicamentbeing the effect of his deliberate inaction.

The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a specialcivil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of CivilProcedure. Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in anycase, i.e.,regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing apetition for review, which would be but a continuation of the appellate process over the original case. Under Rule45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for

reconsideration.

x x x

For the writ of certiorariunder Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain,speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy isconsidered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of thejudgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedyand adequate remedy.[6]

Well-settled is the rule that certioraricannot be availed of as a substitute for a lost appeal.[7]For failure opetitioner to file a timely appeal, the questioned decision of the Court of Appeals had already become final andexecutory.

In any event, the Court finds no reason to reverse the decision of the Court of Appeals.

Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No1083,[8]otherwise known as the Code of Muslim Personal Laws, which states:

Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays:

(a)Amun Jadd(New Year), which falls on the first day of the first lunar month of Muharram;
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(b)Maulid-un-Nab(Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunarmonth of Rabi-ul-Awwal;

(c)Lailatul Isr Wal Mirj(Nocturnal Journey and Ascension of the Prophet Muhammad), which falls onthe twenty-seventh day of the seventh lunar month of Rajab;

(d)d-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal,commemorating the end of the fasting season; and

(e) d-l-Adh(Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dhl-Hijja.Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially observed in theProvinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian,and Zamboanga and in such other Muslim provinces and cities as may hereafter be created;

(2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed inother provinces and cities.

The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides:

Art. 94. Right to holiday pay. -

(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail

and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shallbe paid a compensation equivalent to twice his regular rate; x x x.

Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that (t)he provisions of thisCode shall be applicable only to Muslims x x x. However, there should be no distinction between Muslims andnon-Muslims as regards payment of benefits for Muslim holidays. The Court of Appeals did not err in sustainingUndersecretary Espaol who stated:

Assuming arguendo that the respondents position is correct, then by the same token, Muslims throughoutthe Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. Wemust remind the respondent-appellant that wages and other emoluments granted by law to the working man aredetermined on the basis of the criteria laid down by laws and certainly not on the basis o f the workers faith orreligion.

At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that x x x nothing herein shall beconstrued to operate to the prejudice of a non-Muslim.

In addition, the 1999 Handbook on Workers Statutory Benefits, approved by then DOLE SecretaryBienvenido E. Laguesma on 14 December 1999 categorically stated:

Considering that all private corporations, offices, agencies, and entities or establishments operating within thedesignated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christiansworking within the Muslim areas may not report for work on the days designated by law as Muslimholidays.[9]

On the question regarding the jurisdiction of the Regional Director Allan M. Macaraya, Article 128, Section Bof the Labor Code, as amended by Republic Act No. 7730, provides:

Article 128. Visitorial and enforcement power. -

x x x
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(b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary, and in caseswhere the relationship of employer-employee still exists, the Secretary of Labor and Employment orhis duly authorized representatives shall have the power to issue compliance orders to give effect tothe labor standards provisions of this Code and other labor legislation based on the findings of laboremployment and enforcement officers or industrial safety engineers made in the course of theinspection. The Secretary or his duly authorized representative shall issue writs of execution to theappropriate authority for the enforcement of their orders, except in cases where the employercontests the findings of the labor employment and enforcement officer and raises issues supportedby documentary proofs which were not considered in the course of inspection.

x x x

In the case before us, Regional Director Macaraya acted as the duly authorized representative of theSecretary of Labor and Employment and it was within his power to issue the compliance order to SMC. Inaddition, the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslimholiday pay to its non-Muslim employees. Indeed, petitioner merely contends that its non-Muslim employees arenot entitled to Muslim holiday pay. Hence, the issue could be resolved even without documentary proofs. In anycase, there was no indication that Regional Director Macaraya failed to consider any documentary proofpresented by SMC in the course of the inspection.

Anent the allegation that petitioner was not accorded due process, we sustain the Court of Appeals in finding

that SMC was furnished a copy of the inspection order and it was received by and explained to its PersonneOfficer. Further, a series of summary hearings were conducted by DOLE on 19 November 1992, 28 May1993 and 4 and 5 October 1993. Thus, SMC could not claim that it was not given an opportunity to defend itself.

Finally, as regards the allegation that the issue on Muslim holiday pay was already resolved in NLRC CA No.M-000915-92 (Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga),[10]theCourt notes that the case was primarily for illegal dismissal and the claim for benefits was only incidental to themain case. In that case, the NLRC Cagayan de Oro City declared, in passing:

We also deny the claims for Muslim holiday pay for lack of factual and legal basis. Muslim holidays are legallyobserved within the area of jurisdiction of the present Autonomous Region for Muslim Mindanao (ARMM),particularly in the provinces of Maguindanao, Lanao del Sur, Sulu and Tawi-Tawi. It is only upon PresidentialProclamation that Muslim holidays may be officially observed outside the Autonomous Region and generally

extends to Muslims to enable them the observe said holidays.

[11]

The decision has no consequence to issues before us, and as aptly declared by Undersecretary Espaol, itcan never be a benchmark nor a guideline to the present case x x x.

[12]

WHEREFORE, in view of the foregoing, the petition is DISMISSED.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

[1]Also Elena de Fuerta.[2]295 SCRA 494 (1998)[3]Rollo, p. 61.[4]Rollo, pp. 17-18.[5]318 SCRA 255 (1999).[6]Id., at 264-265.[7]SeeGSIS vs. Olisa,304 SCRA 421 (1999);Mathay, Jr. vs. Civil Service Commission,312 SCRA 91

(1999);Republic vs. Court of Appeals,313 SCRA 376 (1999).[8]A Decree to Ordain and Promulgate a Code Recognizing the System of Filipino Muslim Laws, Codifying Muslim

Personal Laws, and Providing for Its Administration and for Other Purposes.[9]Emphasis supplied.[10]Resolution, promulgated on 21 July 1993 of the NLRC Cagayan de Oro City.[11]Rollo, p. 93.
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[12]Id., at 49.Republic of the Philippines

SUPREME COURTManila

THIRD DIVISION

G.R. Nos. 83380-81 November 15, 1989

MAKATI HABERDASHERY, INC., JORGE LEDESMA and CECILIO G. INOCENCIO, petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION, CEFERINA J. DIOSANA (Labor Arbiter, Department ofLabor and Employment, National Capital Region), SANDIGAN NG MANGGAGAWANG PILIPINO(SANDIGAN)-TUCP and its members, JACINTO GARCIANO, ALFREDO C. BASCO, VICTORIO Y.LAURETO, ESTER NARVAEZ, EUGENIO L. ROBLES, BELEN N. VISTA, ALEJANDRO A. ESTRABO,VEVENCIO TIRO, CASIMIRO ZAPATA, GLORIA ESTRABO, LEONORA MENDOZA, MACARIA G. DIMPAS,MERILYN A. VIRAY, LILY OPINA, JANET SANGDANG, JOSEFINA ALCOCEBA and MARIAANGELES, respondents.

Ledesma, Saludo & Associates for petitioners.

Pablo S. Bernardo for private respondents.

FERNAN, C.J.:

This petition for certiorari involving two separate cases filed by private respondents against herein petitionersassails the decision of respondent National Labor Relations Commission in NLRC CASE No. 7-2603-84 entitled"Sandigan Ng Manggagawang Pilipino (SANDIGAN)-TUCP etc., et al. v. Makati Haberdashery and/or ToppersMakati, et al." and NLRC CASE No. 2-428-85 entitled "Sandigan Ng Manggagawang Pilipino (SANDIGAN)-TUCP

etc., et al. v. Toppers Makati, et al.", affirming the decision of the Labor Arbiter who jointly heard and decidedaforesaid cases, finding: (a) petitioners guilty of illegal dismissal and ordering them to reinstate the dismissedworkers and (b) the existence of employer-employee relationship and granting respondent workers by reasonthereof their various monetary claims.

The undisputed facts are as follows:

Individual complainants, private respondents herein, have been working for petitioner Makati Haberdashery, Inc.as tailors, seamstress, sewers, basters (manlililip) and "plantsadoras". They are paid on a piece-rate basis exceptMaria Angeles and Leonila Serafina who are paid on a monthly basis. In addition to their piece-rate, they aregiven a daily allowance of three (P 3.00) pesos provided they report for work before 9:30 a.m. everyday.

Private respondents are required to work from or before 9:30 a.m. up to 6:00 or 7:00 p.m. from Monday to

Saturday and during peak periods even on Sundays and holidays.

On July 20, 1984, the Sandigan ng Manggagawang Pilipino, a labor organization of the respondent workers, fileda complaint docketed as NLRC NCR Case No. 7-2603-84 for (a) underpayment of the basic wage; (b)underpayment of living allowance; (c) non-payment of overtime work; (d) non-payment of holiday pay; (e) non-payment of service incentive pay; (f) 13th month pay; and (g) benefits provided for under Wage Orders Nos. 1, 2,3, 4 and 5.1
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During the pendency of NLRC NCR Case No. 7-2603-84, private respondent Dioscoro Pelobello left withSalvador Rivera, a salesman of petitioner Haberdashery, an open package which was discovered to contain a"jusi" barong tagalog. When confronted, Pelobello replied that the same was ordered by respondent CasimiroZapata for his customer. Zapata allegedly admitted that he copied the design of petitioner Haberdashery. But inthe afternoon, when again questioned about said barong, Pelobello and Zapata denied ownership of the same.Consequently a memorandum was issued to each of them to explain on or before February 4, 1985 why no actionshould be taken against them for accepting a job order which is prejudicial and in direct competition with thebusiness of the company. 2Both respondents allegedly did not submit their explanation and did not report forwork. 3Hence, they were dismissed by petitioners on February 4, 1985. They countered by filing a complaint forillegal dismissal docketed as NLRC NCR Case No. 2-428-85 on February 5, 1985. 4

On June 10, 1986, Labor Arbiter Ceferina J. Diosana rendered judgment, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in NLRC NCR Case No. 2-428-85 findingrespondents guilty of illegal dismissal and ordering them to reinstate Dioscoro Pelobello andCasimiro Zapata to their respective or similar positions without loss of seniority rights, with fullbackwages from July 4, 1985 up to actual reinstatement. The charge of unfair labor practice isdismissed for lack of merit.

In NLRC NCR Case No. 7-26030-84, the complainants' claims for underpayment re violation ofthe minimum wage law is hereby ordered dismissed for lack of merit.

Respondents are hereby found to have violated the decrees on the cost of living allowance,service incentive leave pay and the 13th Month Pay. In view thereof, the economic analyst of theCommission is directed to compute the monetary awards due each complainant based on theavailable records of the respondents retroactive as of three years prior to the filing of the instantcase.

SO ORDERED. 5

From the foregoing decision, petitioners appealed to the NLRC. The latter on March 30, 1988 affirmed saiddecision but limited the backwages awarded the Dioscoro Pelobello and Casimiro Zapata to only one (1) year. 6

After their motion for reconsideration was denied, petitioners filed the instant petition raising the following issues:

I

THE SUBJECT DECISIONS ERRONEOUSLY CONCLUDED THAT AN EMPLOYER-EMPLOYEERELATIONSHIP EXISTS BETWEEN PETITIONER HABERDASHERY AND RESPONDENTS WORKERS.

II

THE SUBJECT DECISIONS ERRONEOUSLY CONCLUDED THAT RESPONDENTS WORKERS AREENTITLED TO MONETARY CLAIMS DESPITE THE FINDING THAT THEY ARE NOT ENTITLED TO MINIMUM

WAGE.

III

THE SUBJECT DECISIONS ERRONEOUSLY CONCLUDED THAT RESPONDENTS PELOBELLO ANDZAPATA WERE ILLEGALLY DISMISSED. 7

The first issue which is the pivotal issue in this case is resolved in favor of private respondents. We haverepeatedly held in countless decisions that the test of employer-employee relationship is four-fold: (1) the


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selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) thepower to control the employee's conduct. It is the so called "control test" that is the most important element. 8Thissimply means the determination of whether the employer controls or has reserved the right to control theemployee not only as to the result of the work but also as to the means and method by which the same is to beaccomplished. 9

The facts at bar indubitably reveal that the most important requisite of control is present. As gleaned from theoperations of petitioner, when a customer enters into a contract with the haberdashery or its proprietor, the latterdirects an employee who may be a tailor, pattern maker, sewer or "plantsadora" to take the customer'smeasurements, and to sew the pants, coat or shirt as specified by the customer. Supervision is activelymanifested in all these aspects the manner and quality of cutting, sewing and ironing.

Furthermore, the presence of control is immediately evident in this memorandum issued by Assistant ManagerCecilio B. Inocencio, Jr. dated May 30, 1981 addressed to Topper's Makati Tailors which reads in part:

4. Effective immediately, new procedures shall be followed:

A. To follow instruction and orders from the undersignedRoger Valderama, Ruben Delos Reyesand Ofel Bautista. Other than this person (sic) must ask permission to the above mentioned

before giving orders or instructions to the tailors.

B. Before accepting the job orders tailors must check the materials, job orders, due dates andother thingsto maximize the efficiency of our production. The materials should be checked (sic) ifit is matched (sic) with the sample, together with the number of the job order.

C. Effective immediately all job orders must be finished one day before the due date. This can bedone by proper scheduling of job order and if you will cooperate with your supervisors. If youhave many due dates for certain day, advise Ruben or Ofel at once so that they can makenecessary adjustment on due dates.

D. Alteration-Before accepting alteration person attending on customs (sic) must ask first or mustadvise the tailors regarding the due dates so that we can eliminate what we call 'Bitin'.

E. If there is any problem regarding supervisors or co-tailor inside our shop, consult with me atonce settle the problem. Fighting inside the shop is strictly prohibited. Any tailor violating thismemorandum will be subject to disciplinary action.

For strict compliance. 10

From this memorandum alone, it is evident that petitioner has reserved the right to control its employees not onlyas to the result but also the means and methods by which the same are to be accomplished. That privatere

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