RED V COCONUT PRODUCTS, LTD.

, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, TANGLAW NG PAGGAWA, ALBERTO
DELA CRUZ, ET AL., respondents.

Issue:

WON Court of Industrial Relations has no jurisdiction over the case for the reason that the
claim asserted in the petition is a simple money claim and that an interpretation of a contract
the collective bargaining agreement is involved, which pertains to the regular courts.

Facts:

Red V Coconut Products, Ltd. is a corporation with principal office and place of business at
Lucena City. It has in that city a desiccated coconut factory. In said factory, it has several
hundred workers. About 800 of said workers are members of Tanglaw ng Paggawa labor
union.

Tanglaw ng Paggawa and Red V Coconut Products, Ltd. entered into a collective bargaining
agreement on July 15, 1958. Subsequently, however, on October 5, 1961, the
aforementioned company and union entered into another collective bargaining agreement, to
expire on October 31, 1965.

The 1958 collective bargaining agreement provided among other things for payment of
differentials to night shift workers in the desiccated coconut factory.1äwphï1.ñët
The 1961 collective bargaining agreement retained the same arrangement. It stated:
The present shift differential will remain in effect, namely, 35¢ for the second shift and 55¢
for the third Shift.

On January 17, 1962, Tanglaw ng Paggawa and some 300 workers in the above-stated
factory, members of the said union, who belong to Group B, filed a petition in the Court of
Industrial Relations. Petitioners therein alleged that the petitioners-workers are shellers,
parers, counters and haulers in the two shifts (Group B) consisting of 12 hours each shift,
the first shift from 4: 00 A.M. to 4: 00 P.M. and the second shift from 4 P.M. to 4 A.M.; that
said workers change shift assignments every week; that, accordingly, all of them work from 4
A.M. to 4 P.M. (first shift) for two alternate weeks per month and from 4 P.M. to 4 A.M.
(second shift) likewise for two alternate weeks in a month; that although said workers
perform work from 4 P.M. to 4 A.M., they receive only P.55 differential pay for the
corresponding hours of night work; that their nightwork is equivalent to the nightwork of the
2nd and 3rd shifts of Group A combined, so that they should receive what the 2nd and 3rd
shifts of Group A, combined, receive as differential pay, namely, P.90 (P.75 plus P.35); that,
therefore, they are entitled to payment of P.35 more as differential pay, since up to the time
of the petition, they received only P.55 per night as differential pay.

Said additional P.35 was asked by the petitioners-workers of Group B f or work done by
them from 4 P.M. to 4 A.M. Their claim referred to the time from July 15, 1958 to the date of
the petition, allegedly at P186.90 per sheller, parer, counter and hauler, or a total sum of
P65,228.10 more or less.

The Court of Industrial Relations denied said motion by resolution of February 17, 1962
ruling that the claim is for unpaid overtime pay of laborers still employed by the company.

The Court of Industrial Relations, on January 19, 1963 after trial, rendered its decision on the
petition for differential pay (CIR Case No. 1642-V). It found therein that the petitioners-
workers are engaged on pakiao or piece-work basis, and, therefore, are not entitled to
overtime pay under the Eight-Hour Labor Law (Sec. 2, CA 444)

Red V Coconut Products, Ltd. moved for reconsideration of said decision on January 29,
1963. The Court of Industrial Relations en banc denied said motion by resolution of February
25, 1963. And, hence, Red V Coconut Products, Ltd. filed this petition for review herein.
Petitioner herein contends that the present case involves a mere money claim over which
the Court of Industrial Relations has no jurisdiction.

Held:

The petition for shift differential in the present case, it is true, did not expressly mention the
Eight-Hour Labor Law. Nonetheless, it clearly asserted that (1) petitioners-laborers "are
working in the Red V Coconut Products, Ltd." and (2) they "work in two (2) shifts (Blue and
Red shifts) consisting of approximately 12 hours each shift."

Accordingly, from the said allegations, it is proper to regard the petition, as the Court of
Industrial Relations did, as one for overtime pay by workers still employed by the company.
As such it falls within the jurisdiction of the Court of Industrial Relations. For the same is in
effect an assertion not of a simple money claim but, as respondent court rightly held, of a
claim for overtime pay by workers who are employees of the company.

During the trial, as stated, evidence was adduced to the effect that the aforesaid petitioners-
workers were engaged on a piece-work basis. The same, however, does not appear from
the petition or complaint filed with the respondent court. It therefore cannot affect its
jurisdiction over the case, which was already acquired. For jurisdiction, once acquired,
continues until final adjudication of the litigation.

Furthermore, although the Eight-Hour Labor Law provides that it does not cover those
workers who prefer to be paid on piece-work basis (Sec. 2, CA 444), nothing in said law
precludes an agreement for the payment of overtime compensation to piece-workers.

And, finally, the laborers in question are not strictly under the full concept of piece-workers
as contemplated by law for the reason that their hours of work — that is, 12 hours per shift
— are fixed by the employer. As ruled by this Court in Lara v. Del Rosario, 94 Phil. 780, 781-
782, the philosophy underlying the exclusion of piece workers from the Eight-Hour
Labor Law is that said workers are paid depending upon the work they do
"irrespective of the amount of time employed" in doing said work.
Thus it cannot be said that for all purposes these workers fall outside the law
requiring payment of compensation for work done in excess of eight hours. At least for
the purpose of recovering the full differential pay stipulated in the bargaining agreement as
due to laborers who perform 12 hours of work under the night shift, said laborers should be
deemed pro tanto or to that extent within the scope of the afore-stated law.

Wherefore, the decision and resolution of the Court of Industrial Relations under review
are affirmed. So ordered.

Davao Fruits Corporation vs Associated Labor Unions,

G.R. No. 85073, August 24, 1993; 225 SCRA 562

(Labor Standards – Fringe benefits not included in 13th month pay)

Issue:

WON in the computation of the 13th month pay under PD No. 851, payments for sick,
vacation and maternity leaves, premiums for work done on rest days and special holidays,
and pay for regular holidays may be excluded in the computation and payment thereof.

Facts:

On December 28, 1982 respondent Associated Labor Unions (ALU), for and in behalf of all the
rank-and-file workers and employees of petitioner, filed a complaint (NLRC Case No. 1791-MC-
XI-82) before the Ministry of Labor and Employment, Regional Arbitration Branch XI, Davao City,
against petitioner, for "Payment of the Thirteenth-Month Pay Differentials."

Respondent ALU for and in behalf of all the rank-and-file workers and employees of
petitioner sought to recover from the latter the 13th month pay differential for 1982 of said
employees, equivalent to their sick, vacation and maternity leaves, premium for work done
on rest days and special holidays, and pay for regular holidays which petitioner, allegedly in
disregard of company practice since 1975, excluded from the computation of the 13th month
pay for 1982.

In its answer, petitioner claimed that it erroneously included items subject of the complaint in the
computation of the thirteenth month pay for the years prior to 1982, upon a doubtful and difficult
question of law.

A decision was rendered on March 7, 1984 by Labor Arbiter Pedro C. Ramos, in favor of
respondent ALU. The dispositive portion of the decision reads as follows:
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered
ordering respondent to pay the 1982 — 13th month pay differential to all its rank-and-file
workers/employees herein represented by complainant Union (Rollo, p. 32).
Petitioner appealed the decision of the Labor Arbiter to the NLRC, which affirmed the said
decision accordingly dismissed the appeal for lack of merit.

Petitioner elevated the matter to this Court in a petition for review under Rule 45 of the
Revised Rules of Court. This error notwithstanding and in the interest of justice, this Court
resolved to treat the instant petition as a special civil action for certiorari under Rule 65 of the
Revised Rules of Court.

Held:

Yes. Basic salary does not merely exclude the benefits expressly mentioned but all
payments which may be in the form of fringe benefits or allowances.

Sec. 4 of the Supplementary Rules and Regulations Implementing PD No. 851 provides that
“overtime pay, earnings and other remunerations which are not part of the basic salary shall
not be included in the computation of the 13th month pay.

Whatever compensation an employee receives for an 8 hour work daily or the daily wage
rate is the basic salary. Any compensation or remuneration other than the daily wage rate is
excluded. It follows therefore, that payments for sick, vacation and maternity leaves,
premiums for work done on rest days and special holidays, as well as pay for regular
holidays, are likewise excluded in computing the basic salary for the purpose of determining
the 13th month pay.

A company practice favorable to the employees had indeed been established and the payments
made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement
being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by
the employer, by virtue of Section 10 of the Rules and Regulations Implementing P.D. No. 851,
and Article 100 of the labor of the Philippines, which prohibit the diminution or elimination by the
employer of the employees' existing benefits (Tiangco v. Leogardo, Jr., 122 SCRA 267, [1983]).

Petitioner cannot invoke the principle of solutio indebiti which as a civil law concept that is not
applicable in Labor Law. Besides, in solutio indebiti, the obligee is required to return to the
obligor whatever he received from the latter (Civil Code of the Philippines, Arts. 2154 and 2155).

Petitioner in the instant case, does not demand the return of what it paid respondent ALU from
1975 until 1981; it merely wants to "rectify" the error it made over these years by excluding
unilaterally from the thirteenth month pay in 1982 the items subject of litigation. Solutio indebiti,
therefore, is not applicable to the instant case.

WHEREFORE, finding no grave abuse of discretion on the part of the NLRC, the petition is
hereby DISMISSED, and the questioned decision of respondent NLRC is AFFIRMED
accordingly.

Letran Calamba Faculty v. NLRCGR No. 15622529 January 2008

Austria-Martinez, J
ISSUE:

W/N the CA can review the factual findings and legal conclusions of the NLRC in a special
civil action for
certiorari

W/N a teacher’s overload pay should be considered in the computation of his or her 13th
month pay.

FACTS:

In 1992, the Letran Calamba Faculty and Employees Association filed with the NLRC a
complaint against Colegio de San Juan de Letran, Calamba for collection of various
monetary claims due to its members. In 1994, the Association held a strike.The Labor Arbiter
dismissed the Association’s money claims, and also dismissed Letran’s petition to declare
the strike illegal. The NLRC affirmed the Labor Arbiter on appeal. The CA also affirmed the
NLRC.

Prior to the filing of the above-mentioned complaint, petitioner filed a separate complaint
against the respondent for money claims with Regional Office No. IV of the Department of
Labor and Employment (DOLE).

On the other hand, pending resolution of NLRC Case No. RAB-IV-10-4560-92-L, respondent
filed with Regional Arbitration Branch No. IV of the NLRC a petition to declare as illegal a
strike staged by petitioner in January 1994.

Subsequently, these three cases were consolidated. The case for money claims originally
filed by petitioner with the DOLE was later docketed as NLRC Case No. RAB-IV-11-4624-
92-L, while the petition to declare the subject strike illegal filed by respondent was docketed
as NLRC Case No. RAB-IV-3-6555-94-L.

On September 28, 1998, the Labor Arbiter (LA) handling the consolidated cases rendered a
Decision with the following dispositive portion:

WHEREFORE, premises considered, judgment is hereby rendered, as follows:

1. The money claims cases (RAB-IV-10-4560-92-L and RAB-IV-11-4624-92-L) are hereby

dismissed for lack of merit;

2. The petition to declare strike illegal (NLRC Case No. RAB-IV-3-6555-94-L) is hereby
dismissed, but the officers of the Union, particularly its President, Mr. Edmundo F.
Marifosque, Sr., are hereby reprimanded and sternly warned that future conduct similar to
what was displayed in this case will warrant a more severe sanction from this Office.

Both parties appealed to the NLRC.

On July 28, 1999, the NLRC promulgated its Decision[6] dismissing both appeals. Petitioner
filed a Motion for Reconsideration[7] but the same was denied by the NLRC in its
Resolution[8] dated June 21, 2000.

Petitioner then filed a special civil action for certiorari with the CA assailing the above-
mentioned NLRC Decision and Resolution.

On May 14, 2002, the CA rendered the presently assailed judgment dismissing the petition.

Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution
promulgated on November 28, 2002.

HELD:

NO. The Court finds no error in the ruling of the CA that since nowhere in the petition is
there any acceptable demonstration that the LA or the NLRC acted either with grave abuse
of discretion or without or in excess of its jurisdiction, the appellate court has no reason to
look into the correctness of the evaluation of evidence which supports the labor tribunals’
findings of fact. NO. Overload pay should be excluded in the computation of the 13
th
month pay of the Association’s members. The peculiarity of an overload lies in the fact that it
may be performed within the normal eight-hour working day. This is the only reason why the
DOLE, in its explanatory bulletin, finds it proper to include a teacher’s overload pay in the
determination of his or her 13th month pay.

However, the DOLE loses sight of the fact that even if it is performed within the normal eight-
hour working day, an overload is still an additional or extra teaching work which is performed
after the regular teaching load has been completed. Hence, any pay given as compensation
for such additional work should be considered as extra and not deemed as part of the
regular or basic salary

RATIONALE:
The appellate court’s jurisdiction to review a decision of the NLRC in a petition for
Certiorari is confined to issues of jurisdiction or grave abuse of discretion. An extraordinary
remedy, a petition for certiorari is available only and restrictively in truly exceptional cases.
The sole office of the writ of certiorari is the correction of errors of jurisdiction including the
commission of grave abuse of discretion amounting to lack or excess of jurisdiction. The Writ
of certiorari does not include correction of the NLRC’s evaluation of the evidence or of its
factual findings. Such findings are generally accorded not only respect but also finality.

A party assailing such findings bears the burden of showing that the tribunal acted capricious
and whimsical or in total disregard of evidence material to the controversy, in order that the
extraordinary writ of Certiorari will lie.

Settled is the rule that the findings of the LA, when affirmed by the NLRC and the CA, are
binding on the Supreme Court, unless patently erroneous.The Supreme Court is not a trier of
facts, and this applies with greater force in labor cases. Findings of fact of administrative
agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction
is confined to specific matters, are generally accorded not only great respect but evenfinality.
Basic wage means all remuneration or earnings paid by an employer to a worker for services
rendered on normal working days and hours but does not include cost of living allowances,
13th month pay or other monetary benefits which are not considered as part of or integrated
into the regular salary of the workers.

Overload vs. Overtime: Overtime work is work rendered in excess of normal working hours
of eight in a day. Overload work is additional work after completing the regular workload,
may be performed either within or outside eight hours in a day, and may or may not be
considered overtime work.What are deemed not part of the basic salary:a.

Cost of living allowances granted pursuant to PD 525 and LOI 174; b.Profit sharing
payments;c.All allowances and monetary benefits which are not considered or integrated as
part of the regular basic salary of the employee at the time of the promulgation of the
Decree;Overtime pay, earnings, and other remunerations as provided for by PD 851’s IRR.

G.R. No. 107225

ARCHILLES MANUFACTURING CORPORATION, ALBERTO YU and ADRIAN YU vs.

NATIONAL LABOR RELATIONS COMMISSION, GERONIMO MANUEL, ARNULFO DIAZ,
JAIME CARUNUNGAN and BENJAMIN RINDON
June 2, 1995

Issue:

Whether or not a writ of execution is still necessary to enforce the Labor Arbiter's order of
immediate reinstatement of employees who were terminated from service even when
pending appeal.

Facts:

Archilles Manufacturing Corporation, Alberto Yu and Adrian Yu are the petitioners, the latter
two (2) being the Chairman and the VicePresident of ARCHILLES, respectively. Private
respondents Geronimo Manuel, Arnulfo Diaz, Jaime Carunungan and Benjamin Rindon were
employed by ARCHILLES as laborers in its steel factory located in Barangay Pandayan,
Meycauayan, Bulacan, each receiving a daily wage of P96.00.

ARCHILLES was maintaining a bunkhouse in the work area which served as resting place
for its workers including private respondents. In 1988 a mauling incident nearly took place
involving a relative of an employee. As a result ARCHILLES prohibited its workers from
bringing any member of their family to the bunkhouse. But despite this prohibition, private
respondents continued to bring their respective families to the bunkhouse, causing
annoyance and discomfort to the other workers.

This was brought to the attention of ARCHILLES. On 11 May 1990 the management ordered
private respondent to remove their families from the bunkhouse and to explain their violation
of the company rule. Private respondents remove their families from the premises but failed
to report to the management as required; instead, they absented themselves from 14 to 18
May 1990. Consequently, on 18 May 1990, ARCHILLES terminated their employment for
abandonment and for violation of the company rule regarding the use of the bunkhouse.

Private respondents filed a complaint for illegal dismissal and with public respondent
National Labor Relations Commission a motion for the issuance of a writ of execution for
their immediate reinstatement, pending appeal, either physically or in the company payroll.

On 19 September 1991 ARCHILLES opposed the motion. NLRC reordered ARCHILLES to

pay private respondents their "withheld" salaries from 19 September 1991 on the ground that
the order of reinstatement of the Labor Arbiter was immediately executory, even pending
appeal. Since ARCHILLES in its opposition alleged that actual reinstatement was no longer
possible as it would affect the peace and order situation in the steel factory, clearly,
ARCHILLES had opted for payroll reinstatement of private respondents.

Held:

Yes. It must be stressed that although the reinstatement aspect of the decision is
immediately executory pursuant to Article 223 of the Labor Code, it does not follow that it is
self-executory. There must be a writ of execution which may be issued motu proprio or on
motion of an interested party.

Article 224 of the Labor Code provides: Art. 224. Execution of decisions, orders or awards.
— (a) The Secretary of Labor and Employment or any Regional Director, the Commission or
any Labor Arbiter, or med-Arbiter or voluntary arbitrator may, motu proprio or on motion of
any interested party, issue a writ of execution on a judgment within five (5) years from the
date it becomes final and executory.

In the absence of an order for the issuance of a writ of execution on the reinstatement
aspect of the decision of the Labor Arbiter, the petitioner was under no legal obligation to
admit back to work the private respondent under the terms and conditions prevailing prior to
her dismissal or, at the petitioner's option, to merely reinstate her in the payroll.

An option is a right of election to exercise a privilege, and the option in Article 223 of the
Labor code is exclusively granted to the employer. The event that gives rise for its exercise
is not the reinstatement decree of the Labor Arbiter, but the writ for its execution
commanding the employer to reinstate the employee, while the final act which compels the
employer to exercise the option is the service upon it of the writ of execution when, instead
of admitting the employee back to his work, the employer chooses to reinstate the employee
in the payroll only. If the employer does not exercise this option, it must forthwith admit the
employee back to work, otherwise it may be punished for contempt.