Case Summary (G.R. No. 167798)
Background of the Case
On November 8, 1985, Filipro, Inc. filed a petition for declaratory relief with the NLRC concerning holiday pay claims for its monthly-paid employees, influenced by the decision in Chartered Bank Employees Association v. Ople. The parties agreed to submit the case to voluntary arbitration, appointing Benigno Vivar, Jr. as the arbitrator. Vivar ruled on January 2, 1986, that holiday pay was owed to monthly-paid employees per Article 94 of the Labor Code, with certain exclusions. Subsequently, Filipro questioned the entitlement of sales personnel to holiday pay and sought to change the divisor used in pay calculations.
Issues Raised
The UFE contested the arbitrator's findings regarding the exclusion of sales personnel from holiday pay and the divisor change. The central issues include: (1) whether Nestle's sales personnel qualify for holiday pay under Article 82 of the Labor Code; and (2) if the divisor should change from 251 to 261 days upon granting 10 days of holiday pay.
Definition of Field Personnel
According to Article 82 of the Labor Code, field personnel, who are typically excluded from holiday pay benefits, are defined as non-agricultural employees who regularly perform duties outside the employer's primary place of business and whose working hours cannot be determined with reasonable certainty. The Court discussed the interpretive nuances of what constitutes actual work done "in the field" and highlighted that, despite the sales personnel's office reporting hours, the nature of their work made it impractical to supervise or ascertain actual hours spent engaging in fieldwork.
Determination of Hours Worked
The Court sided with the arbitrator’s reasoning that the requirement for employees to report to the office does not equate to actual field duty and is indicative of managerial oversight rather than substantive control over work hours. As such, the Court found that the sales personnel's flexibility and the nature of their job rendered the determination of actual fieldwork hours problematic, thus affirming their classification as field personnel and thereby justifying their exclusion from holiday pay.
Computation of Holiday Pay
The respondent arbitrator ruled that with the award of holiday pay, the divisor should be adjusted to reflect the inclusion of these holiday benefits. The rationale provided was that retaining the 251-day divisor would lead to inflated benefits, where employees would receive holiday compensation while calculating overtime and other benefits based on the same divisor would negate this entitlement. The adjustment aimed to preserve the integrity of benefit calculations.
Legal Implications of Divisor Changes
The Court examined the implications of changing the divisor from 251 to 261 days and concluded that this could diminish employees' benefits contrary to the prohibition against non-diminution found in Article 100 of the Labor Code. It emphasized that changing the divisor while keeping the salary constant would likely l
...continue readingCase Syllabus (G.R. No. 167798)
Case Overview
- Case Citation: 282 PHIL. 217 EN BANC [ G.R. No. 79255. January 20, 1992 ]
- Parties Involved:
- Petitioner: Union of Filipro Employees (UFE)
- Respondents: Benigno Vivar, Jr., National Labor Relations Commission, Nestle Philippines, Inc. (formerly Filipro, Inc.)
- Nature of the Case: Labor dispute concerning holiday pay eligibility and divisor computation for benefits.
Background of the Case
- The dispute originated from the exclusion of sales personnel from holiday pay and a change in the divisor used to calculate employee benefits from 251 to 261 days.
- On November 8, 1985, Nestle Philippines, Inc. (previously Filipro, Inc.) filed a petition with the National Labor Relations Commission (NLRC) for declaratory relief regarding holiday pay claims of its monthly paid employees.
- Both Nestle and UFE submitted to voluntary arbitration, appointing Benigno Vivar, Jr. as the arbitrator.
Decision of the Voluntary Arbitrator
- On January 2, 1986, Vivar ordered Nestle to pay holiday pay to monthly paid employees, with the award effective retroactively from November 1, 1974.
- The arbitrator excluded sales personnel from the holiday pay award, stating they were considered field personnel, thus not entitled to the benefits.
Motions for Reconsideration
- Both Nestle and UFE filed motions for partial reconsideration regarding the decisions made by the arbitrator.
- The NLRC remanded the case back to the arbitrator, asserting it lacked jurisdiction to review voluntary arbitration decisions.
Issues Presented
- Are Nestle's sales personnel entitled to ho ...continue reading