Title
Odango vs. National Labor Relations Commission
Case
G.R. No. 147420
Decision Date
Jun 10, 2004
Employees claimed wage differentials due to underpayment; courts ruled against them, citing procedural flaws and lack of legal basis, affirming "no work, no pay" principle.
wage differentials
no work no pay
equal protection clause
A

Case Summary (G.R. No. 147420)

Chronology of Material Procedural Events

On 10 September 1989, after a routine inspection, the Regional Branch of the Department of Labor and Employment (DOLE) directed ANTECO to pay wage differentials amounting to P1,427,412.75. ANTECO did not comply. Consequently, on various dates in 1995, thirty-three (33) monthly-paid employees filed complaints with the NLRC Sub-Regional Branch VI, Iloilo City, seeking payment of wage differentials, damages, and attorneys fees. The Labor Arbiters involved were consolidated before Labor Arbiter Rodolfo G. Lagoc. On 29 November 1996, the Labor Arbiter rendered a Decision in favor of petitioners, awarding wage differentials of P1,017,507.73 plus attorneys fees of 10%, while dismissing the claim of Florentino Tongson, whose case the Labor Arbiter found without merit. ANTECO appealed to the NLRC on 24 December 1996. On 27 November 1997, the NLRC reversed the Labor Arbiter’s Decision, and, in a Resolution dated 30 April 1998, denied petitioners’ motion for reconsideration. Petitioners then filed a petition for certiorari with this Court, which was initially dismissed for failure to comply with Section 11, Rule 13 of the Rules of Court; on petitioners’ motion for reconsideration, the Supreme Court on 13 January 1999 set aside the dismissal and referred the case to the Court of Appeals in line with St. Martin Funeral Home v. NLRC (356 Phil. 811 (1998)). The Court of Appeals later dismissed petitioners’ petition for certiorari on 27 September 2000 for failure to comply with Section 3, Rule 46 of the Rules of Court, and denied reconsideration on 7 February 2001, prompting the present petition.

Facts on Employment and the Origin of the Wage Differential Claim

Petitioners were monthly-paid employees of ANTECO whose scheduled workdays were from Monday to Friday, and half of Saturday. After the DOLE inspection, ANTECO was directed to pay wage differentials. When ANTECO failed to pay, petitioners pursued their claims before the NLRC. Their theory relied on the premise that monthly-paid employees are presumed paid for all days in the month whether worked or not, and that such presumption should extend beyond the ten legal holidays to cover un-worked days such as Sundays, and also the un-worked half of Saturdays. Petitioners further asserted that ANTECO’s own method of converting leave credits, particularly ANTECO’s use of a divisor of 304, demonstrated that ANTECO was effectively not paying for certain days they claimed were covered.

The Labor Arbiter’s Ruling

The Labor Arbiter held that ANTECO did not adequately refute petitioners’ core contention under Section 2, Rule IV of Book 3 of the Implementing Rules (referred to in the decision as Section 2, and quoted in the text). The Labor Arbiter accepted petitioners’ interpretation that monthly-paid employees should be deemed paid for all days in a month, and, consistent with petitioners’ formulation, that this included not only legal holidays but also other un-worked portions of the week. In assessing wage computations, the Labor Arbiter gave weight to petitioners’ computation of their wages based on ANTECO’s use of 304 as a divisor in converting leave credits. The Labor Arbiter treated ANTECO’s use of the divisor as an admission that ANTECO paid employees for only 304 days per year instead of 365 days. From this, the Labor Arbiter concluded that ANTECO owed employees wages corresponding to sixty-one (61) days, representing the difference between 365 and 304, for every year. The Labor Arbiter thus awarded petitioners wage differentials of P1,017,507.73 and attorneys fees of 10%, granting Florentino Tongson no relief due to the dismissal of his case.

The NLRC’s Ruling

On appeal, the NLRC reversed. It reasoned that the Labor Arbiter’s own computations demonstrated that ANTECO’s employees received daily wage rates above the minimum daily wage. It noted that the lowest paid employee then received a monthly wage of P3,788. Using the formula stated in Section 2—Daily Wage Rate = (Wage x 12)/365—the NLRC computed a daily wage rate of P124.54, which it characterized as clearly above the minimum wage. The NLRC also observed that although the Labor Arbiter’s discussion in the body of its Decision appeared to support the conclusion that ANTECO did not underpay employees, the Labor Arbiter ultimately reached the opposite finding. Finally, the NLRC ruled that ANTECO’s use of 304 as a divisor in converting leave credits operated more favorably to employees because a lower divisor yields a higher rate of pay. On that basis, the NLRC reversed the award of wage differentials and attorneys fees.

The Court of Appeals’ Ruling on Petitioners’ Certiorari Petition

The Court of Appeals dismissed petitioners’ petition for certiorari for being insufficient in both form and substance. It emphasized that petitioners did not allege the essential requisites of the extraordinary remedy of certiorari, particularly by failing to specify where and how the NLRC committed grave abuse of discretion. The Court of Appeals characterized the allegations as sweeping generalizations that fell short of the requirement of Section 3, Rule 46 of the Rules of Court.

Issues Raised Before the Supreme Court

Petitioners raised two principal issues: first, whether the Court of Appeals correctly dismissed the case; and second, whether petitioners were entitled to their money claim for wage differentials and related awards.

The Supreme Court’s Treatment of Procedural Sufficiency: Certiorari Requires Specific Grounds of Grave Abuse

The Supreme Court denied the petition and held that the petition had no merit. On the procedural issue, petitioners argued that the Court of Appeals erred in dismissing their petition because this Court had already ruled that their petition was sufficient in form and substance, relying on the Supreme Court’s Resolution dated 13 January 1999. The Supreme Court rejected the reliance. It explained that the earlier dismissal had been grounded on a different procedural defect: failure to comply with Section 11, Rule 13 due to an inadequate written explanation why service was made through registered mail instead of personally. The Supreme Court contrasted this with the ground for dismissal by the Court of Appeals: failure to comply with the first paragraph of Section 3, Rule 46 in relation to Rule 65, which focuses on the required contents of a petition for certiorari. The Supreme Court stressed that the deficiency then was not the petition’s content but the mode of service explanation; in the subsequent attempt, the defect lay in the petition’s allegations themselves.

The Supreme Court then addressed petitioners’ claim of specificity. It quoted the petition’s own “Reasons Relied Upon for Allowance of Petition,” which described, in general terms, alleged denial of rights to wages for Saturdays, rest days, and legal holidays; alleged arbitrary action by the NLRC “contrary to law” and in “grave abuse of discretion”; and asserted lack of appeal or plain, speedy, and adequate remedy. The Supreme Court concluded that these four paragraphs essentially comprised the entire argument. It held that under Section 3, Rule 46, a petition for certiorari must state the grounds relied upon for the relief sought. It further reiterated that review of NLRC decisions via certiorari is confined to issues of jurisdiction or grave abuse of discretion. Because certiorari is an extraordinary remedy reserved for truly exceptional cases, its office is limited to correcting errors of jurisdiction, including grave abuse amounting to lack or excess of jurisdiction. It does not extend to the correction of the NLRC’s evaluation of evidence or factual findings, which generally enjoy respect and finality. The petitioner bears the burden to show that the tribunal acted capriciously and whimsically, or in total disregard of material evidence.

The Supreme Court agreed with the Court of Appeals that the petition failed to demonstrate any acceptable showing that the NLRC acted with grave abuse of discretion or without or in excess of jurisdiction. The Court held that petitioners resorted largely to generalizations and conclusions of law instead of demonstrating the specific acts of capriciousness or jurisdictional error. The Supreme Court invoked Section 6, Rule 65 to sustain dismissal for failure to make the petition sufficient in form and substance.

The Supreme Court added that the lack of sufficiency in substance was adequate to end the inquiry. Nevertheless, it also discussed the second set of issues to illustrate the extent and manner in which petitioners had pursued their claim.

The Supreme Court’s Substantive Ruling: Petitioners’ Claim for Wage Differentials Lacked Legal Basis

On the merits, petitioners contended that they were entitled to wage differentials by invoking Section 2, Rule IV of Book III of the Omnibus Rules Implementing the Labor Code, arguing that monthly-paid employees must be deemed paid for all days in a month, thus entitling them to pay for all 365 days in a year. Petitioners tied this claim to ANTECO’s use of a 304-day divisor, arguing that such usage proved non-payment for sixty-one (61) days.

The Supreme Court rejected the claim. It first held that it had long declared void the cited Section 2, Rule IV of Book III. It relied on Insular Bank of Asia and America Employees Union (IBAAEU) v. Inciong (217 Phil. 629 (1984)), where the Court ruled that the implementing rule was null and void because, in the guise of clarifying holiday pay, it effectively amended the Labor Code by enlarging the scope of exclusion. The Court emphasized that the Labor Code itself was clear that monthly-paid employees were not excluded from holiday pay. Accordingly, petitioners could not base any enforceable right on a void implementing rule.

Even assuming arguendo that the provision were valid, the Supreme Court held that petitioners’ claim still failed. It reaffirmed the basic rule of no work, no pay, with t

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