LABOR CONGRESS OF THE

PHILIPPINES vs NLRC
GR No. 123938 21 May 1998

FACTS
Private petitioners who are being
represented by the Labor Congress of the
Philippines are ranl-and-file employees of
respondent Empire Food Products
Petitioners filed a complaint against
Empire praying for money claims and for
violation of labor standard laws

 They also filed a petition for direct

certification of petitioner LCP as their
bargaining representative
In October of 1990, LCP and Empire
entered into a Memorandum of Agreement
providing, among others, the following:

 A. That LCP is recognized as the sole

bargaining representative of the rank-andfile employees of Empire
B. To adjust the wages of employees
C. To deduct Union dues to the payroll

.
In November 1990, LCP submitted to
Empire a proposal
for collective
bargaining
In January 1991, LCP filed a complaint
against Empire, alleging the following:

A. Unfair labor practices

B. Union busting
C. Violation of MOA
D. Underpayment of wages
E. Other damages

 The Labor Arbiter ruled in favor of Empire,

but ordered the reinstatement of the
employees who resigned and those who
signed quitclaims and releases
Upon appeal, NLRC remanded the case
back to the Labor Arbiter

 The Labor Arbiter, and affirmed by the

NLRC, ruled that:
No prima facie evidence of existence of unfair
labor practice
Employees were piece-rate workers, hence
not entitled to benefits
Not underpaid

ISSUES
1. Whether the petitioners who are piecerate workers are entitled to benefits
2. Whether they are considered regular
employees

HELD / RATIO
Employees are piece-rate employees who
are entitled to benefits as regular
employees
They are entitled to backwages, however,
the amount is indeterminate. Thus, there
is a need to determine the varying
degrees of production and days worked by
each employee

 They are regular employees although they

are paid in piece-rate basis based on the
following factors:
a. their job is necessary and desirable in the usual
business of Empire
b. petitioners work for them throughout the year
c. the length of time they worked for Empire

.
While petitioners' mode of compensation was on
a per piece basis, the status and nature of their
employment was that of regular employees
The Court reversed the ruling in the Makati
Haberdashery case with respect to entitlement
of piece-rate employees whose work is
supervised by their employer, to service
incentives, leave pay and holiday pay.

 The piece-workers labored under the

control of their employer and, therefore,
did not fall under the exception provided in
the Omnibus Rules
The Court recognized that the real basis of
the exception is the lack of supervision by
the employer of certain workers, including
those who are paid a fixed amount for
performing work irrespective of the time
construed in the performance thereof, and
not the fact that their wages are paid in the
latter manner

 The operative phrase for purposes of exception

s "time and performance are unsupervised by
the employer"
With respect to overtime pay, the Court ruled
that the subject piece-work employees were
entitled to this benefit because there was no
showing of adherence to the standards set forth
in Sec 8, Rule VII Book III of the Omnibus Rules
nor with the rates prescribed by the Secretary

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