Cases: Holiday pay

1. Covered and excluded

Clientlogic Philippines, Inc. v. Castro

G.R. No. 186070, 11 April 2011

[RESOLUTION]

[The employers] argue in the main that, as a team supervisor, [the employee] was a member of the managerial staff; hence, he is not entitled to overtime pay, rest day pay, holiday pay, and service incentive leave pay.

x x x

In his Position Paper, [the employee] states that he worked from 8:00 p.m. to 10:00 a.m. or 4 p.m. to 12:00 p.m. of the following day; he was also required to work during his rest days and during holidays but he was not paid; he was also not paid overtime pay; night shift differentials, and service incentive leave. He was employed as call center agent on 14 February 2005, then promoted as “Mentor” in August 2005, and again promoted to “Coach” position in September 2005, which was the position he had when he was terminated. A “coach” is a team supervisor who is in charge of dealing with customer complaints which could not be dealt with by call center agents, and if a call center agent could not meet the needs of a customer, he passes the customer’s call to the “coach.” Clearly, (respondent) is not a managerial employee as defined by law. Thus, he is entitled to his money claims.

As correctly found by Executive Labor Arbiter Bose:

Employees are considered occupying managerial positions if they meet all of the following conditions, namely:

1) Their primary duty consists of management of the establishment in which they are employed or of a department or subdivision thereof;

2) They customarily and regularly direct the work of two or more employees therein;

3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight.

They are considered as officers or members of a managerial staff if they perform the following duties and responsibilities:

1) The primary duty consists of the performance of work directly related to management of policies of their employer;

2) Customarily and regularly exercise discretion and independent judgment;

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute, under general supervision, special assignment and tasks xxx.

[The employee’s] duties do not fall under any of the categories enumerated above. His work is not directly related to management policies. Even the circumstances shown by the instant case reveal that (respondent) does not regularly exercise discretion and independent judgment. [The employers] submitted a list of the responsibilities of “HR Manager/Supervisor” and “Division Manager/Department Manager/Supervisors” but these do not pertain to [the employee] who does not have any of the said positions. He was just a team Supervisor and not (an) HR or Department Supervisor.

We find no reversible error in the above ruling. The test of “supervisory” or “managerial status” depends on whether a person possesses authority to act in the interest of his employer and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. The position held by respondent and its concomitant duties failed to hurdle this test.

As a coach or team supervisor, respondent’s main duty was to deal with customer complaints which could not be handled or solved by call center agents. If the members of his team could not meet the needs of a customer, they passed the customer’s call to respondent.

This job description does not indicate that respondent can exercise the powers and prerogatives equivalent to managerial actions which require the customary use of independent judgment. There is no showing that he was actually conferred or was actually exercising the following duties attributable to a “member of the managerial staff,” viz.:

1) The primary duty consists of the performance of work directly related to management of policies of their employer;

2) Customarily and regularly exercise discretion and independent judgment;

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute, under general supervision, special assignment and tasks; and

4) Who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above.

According to [the employers], [the employee] also performed the following duties, as shown in the company’s Statement of Policy on Discipline:

a. Know and understand in full the Policy on Discipline including their underlying reasons.

b. Implement strictly and consistently the Policy on Discipline.

c. Ensure that the said Policy on Discipline is communicated to and understood by all employees.

d. Monitor compliance by employees with the said Policy.

e. Advise HR Manager on the state of discipline in their respective departments; problems, if any, and recommend solution(s) and corrective action(s).

As correctly observed by the CA and the LA, these duties clearly pertained to “Division Managers/Department Managers/ Supervisors,” which [the employee] was not, as he was merely a team supervisor. [The employers] themselves described respondent as “the superior of a call center agent; he heads and guides a specific number of agents, who form a team.”

From the foregoing, [the employee] is thus entitled to his claims for holiday pay, service incentive leave pay, overtime pay and rest day pay, pursuant to Book Three of the Labor Code, specifically Article 82,19 in relation to Articles 87,20 93,21 and 9522 thereof.

2. Double holiday

Asian Transmission Corporation v. CA

G.R. No. 144664, 15 March 2004

[BACKGROUND]

The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The bulletin reads:

“On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng Kagitingan.”

Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan x x x x

Despite the explanatory bulletin, [the employer] opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.

x x x

[RESOLUTION: The employees are entitled to double holiday pay or 200%.]

… Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten [currently at 13] paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday [currently at 13] pay benefits a worker is entitled to receive.

It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.

3. Faculty paid by the hour

Jose Rizal College v. NLRC, National Alliance of Teachers

G.R. No. L-65482, 01 December 1987

[The employer] is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on actual days worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on the basis of student contract hour. Before the start of the semester they sign contracts with the college undertaking to meet their classes as per schedule.

Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977, private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against the college for said alleged non-payment of holiday pay, docketed as Case No. R04-10-81-72. Due to the failure of the parties to settle their differences on conciliation, the case was certified for compulsory arbitration…

x x x

The sole issue in this case is whether or not the school faculty who according to their contracts are paid per lecture hour are entitled to unworked holiday pay.

[The Labor Arbiter] found that faculty and personnel employed by petitioner who are paid their salaries monthly, are uniformly paid throughout the school year regardless of working days, hence their holiday pay are included therein while the daily paid employees are renumerated for work performed during holidays per affidavit of [the employer’s] treasurer…

There appears to be no problem therefore as to the first two classes or categories of [the employer’s] workers.

The problem, however, lies with its faculty members, who are paid on an hourly basis, for while the Labor Arbiter sustains the view that said instructors and professors are not entitled to holiday pay, his decision was modified by the National Labor Relations Commission holding the contrary. Otherwise stated, on appeal the NLRC ruled that teaching personnel paid by the hour are declared to be entitled to holiday pay.

[The employer’s] maintains the position among others, that it is not covered by Book V of the Labor Code on Labor Relations considering that it is a non- profit institution and that its hourly paid faculty members are paid on a “contract” basis because they are required to hold classes for a particular number of hours. In the programming of these student contract hours, legal holidays are excluded and labelled in the schedule as “no class day.” On the other hand, if a regular week day is declared a holiday, the school calendar is extended to compensate for that day. Thus petitioner argues that the advent of any of the legal holidays within the semester will not affect the faculty’s salary because this day is not included in their schedule while the calendar is extended to compensate for special holidays. Thus the programmed number of lecture hours is not diminished…

The Solicitor General on the other hand, argues that under Article 94 of the Labor Code (P.D. No. 442 as amended), holiday pay applies to all employees except those in retail and service establishments. To deprive therefore employees paid at an hourly rate of unworked holiday pay is contrary to the policy considerations underlying such presidential enactment, and its precursor, the Blue Sunday Law (Republic Act No. 946) apart from the constitutional mandate to grant greater rights to labor (Constitution, Article II, Section 9)…

In addition, respondent National Labor Relations Commission in its decision promulgated on June 2, 1982, ruled that the purpose of a holiday pay is obvious; that is to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn. That is his holiday pay. It is no excuse therefore that the school calendar is extended whenever holidays occur, because such happens only in cases of special holidays…

x x x

Under the foregoing provisions, apparently, [the employer’s], although a non-profit institution is under obligation to give pay even on unworked regular holidays to hourly paid faculty members subject to the terms and conditions provided for therein.

We believe that the aforementioned implementing rule is not justified by the provisions of the law which after all is silent with respect to faculty members paid by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a fortuitous event or a national need calls for the declaration of special holidays). Regular holidays specified as such by law are known to both school and faculty members as “no class days;” certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts.

On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to payment on Special Public Holidays.

It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the employees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered.

x x x

PREMISES CONSIDERED, the decision of respondent National Labor Relations Commission is hereby set aside, and a new one is hereby RENDERED:

(a) exempting [the employer] from paying hourly paid faculty members their pay for regular holidays, whether the same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations;

(b) but ordering [the employer] to pay said faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly rates should they teach during said extensions.

References

⦁ Book III, Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

⦁ Book IIII, Omnibus Rules Implementing the Labor Code

⦁ 2022 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits

Related

⦁ Holiday pay

⦁ Computation of holiday pay

⦁ FAQ: Holiday pay

⦁ Cases on: Holiday pay