Title
Reotan vs. National Rice and Corn Corp.
Case
G.R. No. L-16223-25
Decision Date
Feb 27, 1962
Former NARIC guards sued for unpaid overtime; court ruled in their favor, affirming labor laws apply to government corporations, excluding leave periods from calculations.

Case Digest (G.R. No. L-16223-25)
Expanded Legal Reasoning Model

Facts:

  • Parties and Employment Background
    • Plaintiffs:
      • Fermin Reotan, Silvestre Reotan, and Praxedes Balane, employed as guards-watchmen.
      • Each served in different branches of the National Rice and Corn Corporation (NARIC) located in Naga (Camarines Sur), Tabaco (Albay), and Daet (Camarines Norte), respectively.
    • Employment Periods:
      • Fermin Reotan: December 1, 1946 – March 31, 1954.
      • Silvestre Reotan: July 12, 1949 – February 12, 1954.
      • Praxedes Balane: September 12, 1949 – March 31, 1952.
  • Nature of the Overtime Work
    • The agencies operated with only two guards-watchmen per branch, necessitating a two-shift system of 12 hours each on a daily basis (except during vacations or sick leaves).
    • Plaintiffs rendered overtime services as ordered by their immediate superiors, primarily to protect the NARIC properties and due to the inadequacy of authorized manpower.
    • Evidence of overtime work included certified time-records bearing the signatures of the officers-in-charge, as well as testimonies from both the plaintiffs and the corresponding officers.
  • Claims and Administrative Proceedings
    • Plaintiffs demanded payment of the overtime compensation corresponding to their additional hours worked.
    • Their claims were first filed with the Wage Administration Service on July 15, 1954.
    • On February 16, 1955, the Wage Administration Service rendered a decision in favor of the plaintiffs.
  • Litigation and Lower Court Proceedings
    • Subsequently, due to NARIC’s persistent refusal to pay the overtime compensation, the plaintiffs instituted separate actions, which were jointly tried and disposed of in one decision by the Court of First Instance of Manila.
    • The decision ordered the NARIC to pay specified sums to each plaintiff, together with interest, attorney’s fees, and costs.
    • It was established that while most time-records were preserved and authenticated, some documents had been destroyed, though other forms of evidence substantiated the rendering of overtime services.
  • NARIC’s Defense and Contentions
    • Internal Policy Defense:
      • NARIC argued that its President-Manager had issued an order (backed by Board Resolution No. 479) stating that overtime work would not be compensated unless prior approval was obtained from the General Manager.
    • Intervention of External Proceedings:
      • The defendant raised the issue of a petition by the NARIC Workers’ Union in another case (Case No. 746-V(8) before the Court of Industrial Relations) which purported to extend the benefits of differential pay to overtime work, Sunday work, and work on legal holidays.
      • It was contended that since the petition pertained primarily to employees in Manila and involved benefits already granted in a separate decision, this should bar or diminish the claims in the present cases.
    • Applicability of Labor Laws:
      • NARIC claimed that the Eight Hour Labor Law was inapplicable to its operations.
      • It also argued that periods during which the plaintiffs were on leave should not have been included in the computation of their overtime compensations.
  • Supporting Evidence and Precedents
    • Testimonies and time-record documentation provided compelling evidence that overtime services were ordered and duly rendered despite the lack of prior formal approval.
    • The evidentiary record was supported by previous case law (e.g., Manila Railroad Co. vs. CIR) affirming that overtime work, when performed under the order of an immediate superior, is compensable.

Issues:

  • Whether the internal policy of the NARIC—mandating prior approval before granting compensation for overtime work—can exempt the corporation from complying with the statutory requirement to pay overtime premiums.
    • The validity of the management resolution in light of Commonwealth Act No. 444 and related labor statutes.
    • If such internal circulars can be enforced against employees’ statutory rights.
  • Whether overtime work rendered under the orders of immediate superiors, even without prior managerial approval, should be regarded as compensable labor under the relevant labor laws.
    • The role of necessity and the protection of corporate property in justifying overtime without formal authorization.
    • Precedents establishing the compensability of mandatory overtime in similar factual circumstances.
  • The effect of the separate petition by the NARIC Workers’ Union (involving differential pay for overtime, night, and holiday work) on the present claims.
    • Whether the proceedings before the Court of Industrial Relations should have a res judicata effect on the claims of the plaintiffs in these cases.
    • The implications of timing and representation issues related to the petition by the union.
  • Whether the Eight Hour Labor Law is applicable to employees of the NARIC, considering its status as a government-owned corporation largely guided by the Civil Service Law.
    • Evaluation of previous decisions (e.g., Tabora vs. Montelibano, Price Stabilization Corporation cases) regarding the scope of such labor laws in government-related corporations.
    • The impact of the Corporate governance structure on the applicability of labor laws.
  • The proper computation of overtime compensation, especially considering periods of leave or absence by the plaintiffs.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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