G.R. No. 159119 - Uy vs. Bueno

Petitioners (Daniel Manalo, Aurelio Dimson, Joaquin Arceo, Santiago Villafuerte, Joaquin Viray, Pedro Lingat, Pastor Sioco, Pedro David, and Urbano Mercado) were employees of Pampanga Sugar Development Company, Inc. (PASUDECO).
The nature of their employment required them to work continuously, including Sundays and legal holidays.
The controversy centers on the interpretation of Section 4 of Commonwealth Act No. 444, as amended (commonly known as the Eight-Hour Labor Law), which mandates that work done on Sundays and legal holidays must be compensated with an additional sum of at least 25% of the regular remuneration.

Petitioners claimed that PASUDECO unlawfully failed to pay the premium pay due for work rendered on 276 Sundays and legal holidays, from 1 January 1954 to 18 August 1958 and continuously thereafter.
The computation presented by petitioners was based on the premise that for an eight-hour work shift on a Sunday or legal holiday, an employee deserves 125% of his or her regular daily wage. This implied that the premium pay component should be an extra 25% on top of a daily wage equivalent distinct from the monthly salary already received.
The total claim amounted to approximately P15,647.68 in premium pay plus attorney’s fees of P2,000.00.

PASUDECO denied any failure to pay the premium pay, asserting that it had already been providing an additional 25% compensation over and above the monthly salary.
Records, including payrolls verified by the Department of Labor and confirmed through collective bargaining agreements, indicated that this 25% additional compensation had been consistently applied since 1946.
The payment practice was acknowledged and commended by the Department of Labor’s examiners.

The petition was initially filed with the Pangasinan branch of the Court of Industrial Relations (CIR) on 9 May 1962.
On 28 July 1966, the CIR issued a decision, through Associate Judge Joaquin M. Salvador, dismissing the petitioners’ claim by holding that the existing practice—providing the 25% premium on top of the monthly salary—satisfied the statutory requirement of Section 4.
A subsequent motion for reconsideration before the CIR was denied en banc.

The conflict revolves around the proper interpretation of the term “premium pay” as stipulated in Section 4, which the petitioners contend should amount to 125% of the basic daily wage for work on Sundays and legal holidays.
Conversely, PASUDECO and the CIR maintained that the statutory mandate only requires payment of an additional 25% of the daily wage, the base daily wage being already encompassed in the monthly salary.
The Department of Labor’s formula for computing the daily wage of monthly-salaried employees further supports the interpretation that premium pay is calculated as 25% of the daily wage and is distinct from the base salary.

Whether the phrase “an additional sum of at least twenty-five per centum of his regular remuneration” under Section 4 of Commonwealth Act No. 444 is to be understood as a supplemental 25% of the daily wage, separate from the base monthly or yearly salary.
Whether the term “premium pay” should be computed as 125% of the daily wage for Sundays and legal holidays (implying the base daily wage plus an extra 25%) or merely as an extra 25% added to the salary that already covers ordinary work, including work on such special days.

Whether the monthly or yearly salary agreed upon in employment contracts is intended to compensate for work performed exclusively on ordinary working days, thereby necessitating an extra premium for work on Sundays and legal holidays, or whether it inherently covers such work.
Whether the prior practice established by PASUDECO and confirmed by collective bargaining agreements satisfies the statutory requirement, thereby precluding any additional or alternative computation advocated by the petitioners.

Whether the collective bargaining agreements, which include provisions equivalent to the 25% additional compensation, can be interpreted as valid and binding when juxtaposed with the explicit statutory directive in Section 4 and Section 6 of the Act.
Whether any agreement that deviates from the statutory minimum of a 25% premium is null and void ab initio as mandated by Section 6.