G.R. No. 111107 - Paat vs. Court of Appeals

On May 5, 1947, petitioner corporation, engaged in the shipping business, employed Eugenio Lopez as storekeeper aboard the M/V Luzon with a monthly salary of P122.00.
Claimant-respondent was later transferred to several vessels including M/V Edward, M/V Victoriano, and finally M/V Davao.

His services were terminated on October 13, 1962, when the M/V Davao was drydocked in Cebu.
Upon termination, he received separation pay amounting to P1,586.00.

On March 17, 1964—approximately one year, five months, and four days after his termination—claimant-respondent filed a petition before the Court of Industrial Relations (CIR).
His petition claimed salary differentials amounting to P2,816.00, premium pay for Sundays and holidays, daily overtime compensation, and sought reinstatement.

Petitioners (now respondents) filed a motion to dismiss the petition on grounds including the lack of CIR’s jurisdiction and the insufficiency of the cause of action.
The CIR denied the motion to dismiss, directing petitioners to file their answer.
In their answer, petitioners contended that the dismissal was lawful since the separation pay had been paid, argued that there were no grounds for premium pay due to their status as a public utility corporation, maintained that the claims were time-barred (prescribed), and asserted that overtime services were not rendered because the claimant’s work did not conform to a fixed eight-hour day.

In the decision dated September 24, 1970, with its subsequent en banc resolution on November 3, 1970, the CIR directed petitioners to either reinstate claimant-respondent (or assign him to an equivalent position) or, alternatively, pay overtime compensation at a rate of 2 hours per day based on his last salary rate for the duration of his employment.
Petitioners moved for reconsideration, but the CIR en banc denied the motion.

Petitioners questioned the jurisdiction of the CIR over post-termination claims and argued that mere assertion of reinstatement without alleging wrongful dismissal was insufficient.
They further contended that by accepting separation pay, the claimant forfeited the right to reinstatement.
Issues related to prescription, the evidentiary basis for overtime hour computation, and the applicability of statute of limitations for overtime claims were also raised.

Whether the CIR has jurisdiction over the money claims such as salary differentials, premium pay, and overtime compensation when the employment relationship has terminated.
Whether the claimant’s assertion of a right to reinstatement without supporting allegations of wrongful or illegal dismissal can confer jurisdiction on the CIR.

Whether the CIR could lawfully order the reinstatement of the claimant given that his dismissal was lawful and he had received his separation pay.

Whether prescription and laches have set in to bar the claimant’s alleged right to be reinstated.

Whether the CIR’s finding, based on the claimant’s testimony, that he worked no less than 10 hours a day is binding, considering the evidence presented.

Whether the overtime compensation claims, particularly those accruing for periods beyond three years, are barred under the applicable law.