Case Summary (G.R. No. 138400)
Key Individuals and Context
- Alfonso Gatchalian: owner/manager of New Life Drug Store in Zamboanga City
- Expedite Fernandez: salesman employed by Gatchalian, alleged underpaid
- Court of First Instance of Zamboanga: trial court below
- Supreme Court of the Philippines: issuing court under the 1935 Constitution
Petitioner and Respondent
- Petitioner: The People of the Philippines (represented by the City Attorney of Zamboanga)
- Respondent: Alfonso Gatchalian
Key Dates
- Alleged underpayment period: August 4, 1951 to December 31, 1953
- Arraignment: June 19, 1956 (plea: not guilty)
- Motion to dismiss filed: August 29, 1956
- Trial court order dismissing informations: December 3, 1956
- Supreme Court decision: September 30, 1958
Applicable Law
- Republic Act No. 602 (Minimum Wage Law)
• Section 3 – Establishes prescribed minimum daily wage rates
• Section 15 – Prescribes criminal penalties for wilful violations and civil remedies for unpaid wages - Philippine Constitution of 1935 (governing charter at time of decision)
Procedural History
Gatchalian was charged in four informations under Section 3 of R.A. 602 for willfully paying wages (P60–P90 monthly) below the statutory minimum, resulting in an alleged P1,016.64 underpayment. After pleading not guilty, his counsel moved to dismiss on the grounds that the statute imposed only civil liability and that Section 3 carried no penalty. The trial court granted the motion, dismissed the informations with costs, and ordered a civil suit for unpaid wages. The People appealed.
Provisions of Republic Act No. 602
- Section 3(a): Requires employers outside Metro Manila to pay at least P3/day for one year, thereafter P4/day.
- Section 15(a): Imposes a fine of up to P2,000, or upon second conviction up to one year’s imprisonment (or both) for any wilful violation of the Act.
- Section 15(e): Grants civil remedies for underpayment—recovery of unpaid wages with interest and attorney’s fees.
Penal Clause and Civil Liability under R.A. 602
The Court emphasized that Section 15(a) encompasses “any wilful violation of any of the provisions of this Act,” including the fundamental duty in Section 3 to pay the prescribed minimum wage. Section 15(e) concurrently creates civil liability for unpaid wages, ensuring both criminal and civil sanctions operate together.
Comparative Analysis with the U.S. Fair Labor Standards Act
The Court noted that R.A. 602 was modeled after the U.S. Fair Labor Standards Act (FLSA) of 1938. Although both laws impose criminal penalties and civil liabilities for wage violations, R.A. 602 differs in dispersing unlawful acts across multiple sections rather than consolidating them, and in extending criminal sanction to any statutory provision—including minimum‐wage requirements—whereas the FLSA criminalizes only expressly enumerated acts.
Interpretation of the Penal Clause under R.A. 602
Given the law’s remedial and protective purpose, a restrictive construction of Section 15(a) that excludes Section 3 would undermine enforcement. The Court held that the statutory phrase “any of the provisions of this Act” clearly covers the nonpayment of the minimum wage. This interpretation aligns with legislative intent to provide an effective deterrent beyond mere civil recovery.
Appellee’s Argument on Scope of Section 15(a)
Gatchalian argued that Section 15(a) should apply only to offenses expressly declared unlawful (e.g., payment in coupons, discrimination, false records), not to administrative duties of officials or to the substantive minimum‐wage requirement. He warned that a broader reading would expose enforcement officials and local government employers to criminal prosecution.
Court’s Rejection of Appellee’s Construction
The Court distinguished substantive employer obligations (e.g., Section 3) from administrative duties of officials (enforced by removal under Section 18(c)). It held that administrative provisions are enforced by administrative sanction, whereas substantive provisions carry criminal liability under Section 15(a). The
Case Syllabus (G.R. No. 138400)
Facts of the Case
- Alfonso Gatchalian, owner/manager of New Life Drug Store in Zamboanga City, employed Expedite Fernandez as salesman.
- Between August 4, 1951 and December 31, 1953, Gatchalian paid Fernandez P60–P90 monthly, below the statutory minimum wage.
- The underpayment totaled P1,016.64 over the period.
- Gatchalian was charged under Section 3 of Republic Act No. 602 (the Minimum Wage Law) in four informations (Criminal Cases Nos. 2206–2209).
- On arraignment (June 19, 1956), he pleaded not guilty.
Procedural History
- August 29, 1956: Gatchalian’s counsel moved to dismiss, arguing Section 3 imposes only civil liability or lacks penal sanction.
- September 25, 1956: City Attorney answered, invoking Section 15 of RA 602 for criminal penalties on willful violations.
- December 3, 1956: Court of First Instance of Zamboanga granted the motion, dismissed informations with costs, cancelled bail, and directed civil action for unpaid wages.
- Motion for reconsideration denied; the People appealed.
Statutory Provisions Involved
- Section 3, RA 602: Employers must pay non-agricultural employees outside Manila at least P3/day initially, P4/day after one year.
- Section 15(a)–(g), RA 602:
• (a) Willful violation of any provision incurs up to P2,000 fine; second conviction up to one year imprisonment or both.
• (e) Employer underpaying wages is civilly liable for unpaid amount plus interest; employees may sue with attorney’s fees.
• Other subsections provide corporate liability, Secretary of Labor’s enforcement powers, recovery actions, and limitations.
Legal Issues
- Whether non-payment of the statutory minimum wage under Section 3 constitutes a crime punishable under Section 15(a).
- Whether the court a quo erred in ruling that Section 3 carries only civil liability.
- Proper interpretation and scope of the penal clause in Section 15(a) relative to Section 3.
Arguments of the Parties
- Appellant (People):
• Section 15(a) penalizes “willful violation of any provisions of this Act,” encompassing Sec