NATIONAL RICE AND CORN CORPORATION (NARIC), PETITIONER, VS. NARIC WORKERS UNION, ET AL., RESPONDENTS.

NARIC versus NARIC Workers Union

The Case

This is a petition for review brought by the National Rice and Corn Corporation against the NARIC Workers Union and the Court of Industrial Relations. The corporation challenges the order and the en banc resolution of the industrial court approving the chief examiner's computation of additional compensation for night work, which the corporation claims was erroneous because it allowed a worker to be paid twice over the same hours — once as overtime and again as night work. The case matters because it fixes the meaning of night work and settles whether night work and overtime work are mutually exclusive, a question that goes to the heart of how the Eight Hour Labor Law interacts with the industrial court's power to fix wages for work performed at night.

Procedural History

In Case Number 746-V of the Court of Industrial Relations, entitled NARIC Workers Union against National Rice and Corn Corporation, the industrial court promulgated a decision dated February 15, 1956, directing the corporation to pay its workers 25 per cent additional compensation for night work rendered by them. On May 21, 1956, upon motion of the union, the industrial court ordered its chief examiner, or any of his assistants, to compute the additional compensation for night work covering the period from October 3, 1952 to February 16, 1953. The chief examiner submitted his report on August 1, 1956. On September 24, 1956, the union filed a petition for execution praying that the corporation be ordered to deposit the sum of 5,221.84 pesos. The corporation opposed the motion as premature. After hearing, the industrial court issued an order on December 28, 1956 approving the report and ordering the deposit. The corporation moved for reconsideration, but the Court of Industrial Relations en banc issued a resolution on February 13, 1957, finding no sufficient justification to alter or modify its previous order. Hence this petition for review before the Supreme Court.

Facts

The industrial court had earlier ordered the National Rice and Corn Corporation to pay its workers 25 per cent additional compensation for night work. To implement that decision, the court directed its chief examiner to compute the amounts due for the period from October 3, 1952 to February 16, 1953. The examiner reported that 163 workers and employees had rendered night work during that period, and that the 25 per cent additional compensation, computed on the basis of their respective monthly salaries, amounted to 5,221.84 pesos.

When the chief examiner was called to explain his report, he stated that he considered any and all work performed between 6:00 o'clock in the afternoon and 6:00 o'clock in the morning as night work, and awarded each employee 25 per cent additional compensation for it. He further stated that if an employee worked from 8:00 o'clock in the morning to 5:00 o'clock in the afternoon and then rendered overtime service from 5:00 o'clock to 7:00 o'clock in the evening, he considered the work from 5:00 to 6:00 in the afternoon as overtime work entitled to 25 per cent additional compensation, and the same work from 6:00 to 7:00 in the evening as both overtime work and night work, entitled to 25 per cent additional compensation as overtime and another 25 per cent as night work.

The corporation opposed the report, contending that this interpretation of night work ran counter to the definition given by the Supreme Court in Shell Company of the Philippines versus National Labor Union. The industrial court nonetheless approved the report and ordered the deposit. The corporation's motion for reconsideration was denied by the en banc resolution, leading to this petition for review.

Issues

• Whether or not an employee performing his regular eight hours of daytime work may be paid additional compensation for overtime work from 5:00 o'clock to 9:00 o'clock in the afternoon and at the same time be paid additional compensation for night work from 6:00 o'clock to 9:00 o'clock in the evening for the very same work.
• Whether or not the term night work, as interpreted by the industrial court, is erroneous for running counter to the definition given in Shell Company of the Philippines versus National Labor Union.

Applicable Provisions

Commonwealth Act Number 444, the Eight Hour Labor Law, is the law that mandates additional compensation for overtime work, as discussed by the Court:

One is paid for his work done during the night and the other is paid because it is in excess of the regular eight-hour work he may be legally required to do. One is done for reasons of health and the other because of an express mandate of the law (Commonwealth Act No. 444).

This provision bears on the case because it is the express statutory basis for the payment of overtime compensation, distinct from the industrial court's power to award additional compensation for night work.

Commonwealth Act Number 103 is the law under which the industrial court may determine the wages that night workers should receive, as the Court explained:

And this Court in that case said that while there was no law actually requiring payment of additional compensation for night work, the industrial court has the power to determine the wages that night workers should receive under Commonwealth Act No. 103, and so it justified the additional compensation given to night workers by the industrial court in the Shell case for "hygienic, medical, moral, cultural and sociological reasons."

This provision bears on the case because it supplies the authority for the additional compensation for night work, separate and apart from the overtime pay mandated by Commonwealth Act Number 444.

Article 13 of the New Civil Code is cited by the Court for the definition of night time:

Supposing that night work begins from 6:00 o'clock p.m. and ends at 6:00 o'clock a.m. (Article 13, New Civil Code.)

This provision bears on the case because it fixes the period that the industrial court and its examiner treated as night work.

Ruling

On the first issue, the Court held that the computation made by the chief examiner, as affirmed by the industrial court, is correct. The Court reasoned that while it is true that in the Shell case it made a comment distinguishing night work from daytime work, that comment does not convey the idea that work done at night cannot also be overtime work. The comment only served to emphasize that the demand made upon the laborers in the Shell case was not merely overtime work but night work, and so there was need to differentiate night work from daytime work. The Court explained that the Shell case cannot be invoked as authority for concluding that one who does night work cannot be paid additional compensation for the same work as overtime, because one is paid for work done during the night and the other is paid because it is in excess of the regular eight-hour work he may be legally required to do.

On the second issue, the Court held that the industrial court's interpretation of night work is not erroneous. The Court illustrated the logic with an example of workers in three shifts, and concluded that work done at night should be paid more than work done during the day. If a worker is required to work beyond his regular hours of duty, he should also be paid additional compensation for overtime work. This is what was done by the chief examiner, and the industrial court was therefore justified in affirming his report.

Doctrine

Night work and overtime work are not mutually exclusive. A worker who performs night work may also be entitled to overtime compensation for the same hours, because the two are paid for different reasons: night work is compensated for reasons of health, while overtime work is compensated because of the express mandate of Commonwealth Act Number 444. The industrial court has the power to determine the wages that night workers should receive under Commonwealth Act Number 103, and may justify additional compensation for night work for hygienic, medical, moral, cultural, and sociological reasons. The Shell case does not bar the payment of both night work and overtime compensation for the same hours; it merely distinguishes night work from daytime work.

Disposition

The order and resolution appealed from are affirmed, with costs against the petitioner, National Rice and Corn Corporation.

Remember This

Night work and overtime work are two distinct bases for additional compensation, and the same hour of work may be compensated under both without being double compensation for the same reason. Examiners like to use this case to test whether a reviewee understands that the Shell doctrine distinguishes night work from daytime work but does not prohibit the payment of overtime pay for hours that also qualify as night work.