G.R. No. 173120 - Spouses Yu Hwa Ping vs. Ayala Land, Inc.

The exclusion of the company’s sales personnel from the holiday pay award.
The change in the divisor used for computing benefits—from 251 to 261 days—which affected the computation of overtime, night differential, vacation, and sick leave benefits.

On November 8, 1985, Filipro, Inc. (now Nestle Philippines, Inc.) filed a petition with the National Labor Relations Commission (NLRC) seeking clarification on its rights concerning holiday pay for its monthly-paid employees, particularly in the light of the court’s earlier decision in Chartered Bank Employees Association v. Ople (138 SCRA 273 [1985]).

Both the Union of Filipro Employees (UFE) and Filipro, Inc. agreed to settle the dispute via voluntary arbitration and appointed Benigno Vivar, Jr. as the arbitrator.
On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro, Inc. to pay holiday pay to its monthly-paid employees pursuant to Article 94 of the Labor Code, with limitations under Article 82 and other applicable legal restrictions.
Filipro, Inc. subsequently filed a motion for clarification seeking:

Limitation of the award to three years.
Exclusion of sales personnel (including salesmen, sales representatives, truck drivers, merchandisers, and medical representatives) from the holiday pay benefit.
Deduction from the holiday pay award of amounts considered as overpayments for overtime, night differential, vacation, and sick leave—arising from the use of a divisor of 251 days.

The holiday pay award should be retroactive from the effectivity date of the Labor Code (i.e., November 1, 1974).
Their sales personnel are not “field personnel” (as defined in Article 82 of the Labor Code) and should be included in the holiday pay benefit.
The use of the divisor 251 is an established employee benefit that should not be diminished.

Their sales personnel qualify as field personnel whose work hours performed in the field cannot be determined with reasonable certainty.
Hence, under Article 82 and the corresponding implementing rules (especially Rule IV, Book III), these employees are excluded from the holiday pay award.
They further contended that, with the inclusion of 10 additional holidays, the divisor should change from 251 to 261, and any overpayment computed with 251 as the basis should be reimbursed.

The holiday pay award was declared retroactive to November 1, 1974.
Sales personnel were ruled as field personnel—thus ineligible for holiday pay.
With the award of 10 days of holiday pay, it was directed that the divisor be changed to 261, and reimbursement of overpayments made using 251 as divisor was ordered.

Both parties filed motions for partial reconsideration. The NLRC, however, remanded the case back to the arbitrator on the ground that it lacked jurisdiction in voluntary arbitration cases.
In a subsequent development, the respondent arbitrator refused to continue with the case on the basis that his jurisdiction had terminated upon his resignation from service effective May 1, 1986.
This led to the filing of the petition, raising the core issues for resolution.

Is it correct to classify the company’s sales personnel as "field personnel" under Article 82 of the Labor Code?
Do the practices—such as reporting to the office at 8:00 a.m. and returning at 4:00 or 4:30 p.m.—imply that their actual field work hours can be determined with reasonable certainty, thereby entitling them to holiday pay?

Should the computation of benefits continue using the divisor of 251 days, or must it change to 261 days to account for the inclusion of 10 holiday pay days?
Does the change in divisor, if applied, result in an overpayment (or underpayment) for overtime, night differential, vacation, and sick leave benefits, thus invoking the doctrine of solutio indebiti (payment by mistake)?

Whether the holiday pay award should be retroactively applied from the effectivity of the Labor Code (November 1, 1974), as maintained by the petitioner, or from a later date (such as 1985 or October 23, 1984) as argued by respondent Nestle?
How does the “operative fact” doctrine apply in determining the correct reckoning period for the application of holiday pay?