University of the Philippines College of Law

JEAF, 2-D

Topic DIRECT PAYMENT OF WAGES

Case No. G.R. No. L-11606 / February 28, 1959
Case Name BERMISO vs. ESCAÑO
Ponente LABRADOR, j.

RELEVANT FACTS
 Hijos de F. Escano, Inc. is engaged in the business of carrying or transporting passengers and goods by
water for compensation within the Phils.
 Meanwhile, Katubsanan sa Mamumuo is a labor organization, composed mainly of laborers from Visayas
and Mindanao. Respondents Jose Muana and Vitaliano Sabay are its general president and general
treasurer, respectively. Its members in Cebu are numerous and divided into several groups. One of them
is headed by respondent Vitaliano Sabay (Sabay group). To this group, in which there are no less than 50
men, formerly belonged some or all of the 45 petitioners.
 The work of the group is as follows:
o Their work is similar to that done by laborers of stevedoring and arrastre firms. They load and
unload vessels in the port of Cebu and haul or transport discharged cargo to the consignees as
well as cargo to be shipped out of Cebu from the shippers’ warehouses to the port.
o One of the carriers for whom the Sabay men regularly serve as stevedores is the Escano.
o The Sabay group were not paid by Escano for its loading/unloading services but instead it
collects from the shippers and consignees the charges for handling of the cargo.
o The group has a collector, timekeeper, paymaster and several capataces and subcapataces.
o As for the workers’ pay, the net income of the group is divided into equal shares in accordance
with their sharing plan:
 Each common laborer is entitled to 1 share
 The subcapatacaces, capataces, Sabay and other officers get 1 ¼, 1 ½, 1 ¾, 2, 3 or more
each depending on the length of membership and importance of the position held in the
group
 Division of group’s income is done every Saturday and the shares received by the
members constitute their wages for the week
o Before the Minimum Wage Law took effect, the number of hours each laborers worked was not
taken into account. But when the law took effect, the share was given a fixed value – P0.50/hr. of
work or service.
 On August 5, 1952, petitioners (originally 45 but the 40 later on desisted => 5 left) instituted this action
before the CIR praying for direct payment of wages to laborers instead of through the union,
reinstatement with backwages, payment of OT, wage differentials, etc.
 CIR ordered reinstatement of 5 laborers to their former work and positions in the Sabay group but w/o
backwages. Their other claims were dismissed.
 They appealed to CA. Petition denied.
o CA ruled that petitioners failed to establish any reasonable basis for all their claims except that
for their reinstatement.
o The labor standards they are asking should be the subject of collective bargaining, cannot ask
thru the court.
o With respect to the direct payment of wages to the laborers, CA found that there was no
reason for changing the practice of apportioning the wages for their joint labor and sharing
therein because of the 150 members, only 5 were dissatisfied.
ISSUE AND RATIO DECIDENDI

Issue Ratio

W/N the decision of the CA
violates the law on direct
payment of wages?
W/N Escano should pay the
stevedoring charges?
W/N Escano should pay
backwages?
The decision subject of review is hereby affirmed. Without costs.
University of the Philippines College of Law
JEAF, 2-D
NO.
1. Petitioners argue that the decision violates the law on direct payment
of wages, relying on Sec. 10, par. (b) of RA 602.
2. SC held that the work of stevedoring was undertaken by the laborers,
not in their individual capacities but as a group. The contract to
perform the service was made by the leader of the group, for and on
behalf of the latter, not for each and every one of them individually.
 For the sake of convenience, it was necessary that the group must
be large enough to be able to perform the task of loading and
unloading in as short time as possible.
 As the group undertook to render service for vessels other than
those of the Hijos de F. Escaño, it was absolutely necessary that
some sort of leadership be instituted in the group to determine
which of the members will work for one vessel and which for
another.
 Leadership is also essential to obtain work for the group as
employers naturally prefer to deal with a leader of a group than
with each member individually. Leadership was, therefore,
essential not only to secure work for the group but to arrange the
laborers who are to perform the service.
 The leadership must be paid for and it was not shown that the
head of the groups got the lion's share of the cost of the service
rendered.
3. SC said that they are not prepared to say that the law on direct
payment of wages has been violated.
4. The lower court did not find sufficient evidence to show that
racketeering was employed by the leaders.
NO.
1� SC said that it was the group itself who collects these charges from
the shippers. Escano should not be made to pay.
NO.
1. SC noted that Escano did not deal with petitioners individually. It dealt
with the group thru its leaders.
2. If the group, thru its leaders, did not allow petitioners to work and
share in the income, the one responsible is not Escano but the leader
thru whom the group itself made the contract for work and
apportioned the time of work for each member and the pay therefor.
3. SC also said that the remedy must be sought not in the tribunals of
the country but in the laborers themselves who should organized and
thru such organization, as they may establish, secure the privileges
demanded.
RULING