NATIONAL SHIPYARD AND STEEL CORPORATION, PETITIONER, VS. COURT OF INDUSTRIAL RELATION AND DOMINADOR MALONDRAS, RESPONDENTS.

National Shipyard and Steel Corporation versus Court of Industrial Relations and Malondras

The Case

This is a petition brought by the National Shipyards and Steel Corporation, commonly known as NASSCO, a government owned and controlled corporation engaged in shipbuilding and repair, against the Court of Industrial Relations and its own bargeman, Dominador Malondras. NASSCO asks the Supreme Court to review the orders of the Industrial Court directing it to pay Malondras overtime compensation computed at sixteen hours a day for two overlapping periods, from January 1954 to December 1956 and from January to April 1957. The case matters because it fixes the test for overtime pay of seamen and bargemen who are required to live aboard their vessels: the criterion is not mere presence on board beyond eight hours, but actual service rendered in excess of eight hours.

Procedural History

Thirty nine crew members of NASSCO's tugboat service, including Dominador Malondras, filed a complaint for overtime compensation with the Court of Industrial Relations. The parties entered into a stipulation of facts, and on the strength of that stipulation the Industrial Court ordered the court examiner to compute the overtime due the claimants. The examiner submitted a first partial report covering the year 1957, crediting an average of five overtime hours a day, and all claimants including Malondras were paid. A second partial report covered January 1954 to December 1956, again at five hours a day, but Malondras was excluded because his time sheets could not then be found. After his time sheets were located, Malondras filed petitions in the same case for computation and payment of his overtime for both periods. Over NASSCO's opposition, the Industrial Court ordered the examiner to examine the logbooks, daily time sheets, and other records. The chief examiner reported 4,349 overtime hours at five hours a day, but later, on re-examination ordered by the court and without deducting the subsistence allowance, submitted an amended report crediting sixteen overtime hours a day and recommending payment of 15,242 pesos and 15 centavos. The Industrial Court approved this report over NASSCO's vigorous objections, denied reconsideration en banc with one judge dissenting, and NASSCO appealed to the Supreme Court.

Facts

NASSCO owned several barges and tugboats used to transport cargoes and personnel in connection with its shipbuilding and repair business. So that its bargemen could be called to duty immediately whenever needed, they were required to stay in their respective barges, and for this reason they were given living quarters on board as well as a subsistence allowance of one peso and fifty centavos a day while on board. Upon prior authority of their superior officers, however, they could leave their barges when these were idle.

In the complaint filed on April 15, 1957, the parties stipulated that to meet the exigencies of the service the claimants had to work when so required in excess of eight hours a day or during Sundays and legal holidays, and that they were paid their regular salaries and subsistence allowance without additional compensation for overtime work. Acting on this stipulation, the examiner's reports credited the crewmen, including Malondras for 1957, with an average of five overtime hours a day, and they were paid.

Malondras was left out of the second report only because his daily time sheets were not then available. When they were found, he asked for his overtime for January 1954 to December 1956 and January to April 1957. The examiner, interpreting the entries "Detail" or "Detailed on Board" to mean that Malondras was in the boat for twenty four hours, credited him with sixteen overtime hours a day. NASSCO objected that the time sheets did not show actual hours worked, and that presence on board did not mean work.

Issues

• Whether or not the Industrial Court erred in awarding Malondras sixteen hours of overtime pay daily for every hour in excess of eight that he was on board his barge, regardless of whether he actually worked during those hours.
• Whether or not the subsistence allowance received by Malondras should be deducted from his overtime compensation.
• Whether or not the examiner erred in computing Malondras' overtime for the whole of 1954 at six pesos and sixteen centavos a day, when he was appointed to the tugboat service only on October 1, 1954, and before that received six pesos daily as a derrick man.

Applicable Provisions

Section 1 of Commonwealth Act Number 444, the Eight-Hour Labor Law, provides:

Section 1. The legal working day for any person employed by another shall be of not more than eight hours daily. When the work is not continuous, the time during which the laborer is not working and can leave his working place and can rest completely, shall not be counted.

This is the provision the Court construes to define when hours spent on board count as compensable work, turning on the meaning of "working place."

Ruling

On the first issue, the Court held that the criterion for overtime pay of seamen is not whether they were on board and could not leave the ship beyond the regular eight working hours, but whether they actually rendered service in excess of eight hours. It rejected the examiner's reading of "Detail" or "Detailed on Board" as equivalent to sixteen hours of work, reasoning that seamen are required to stay on board by the very nature of their duties, which is why they are given free living quarters and subsistence allowances, and that the law could not have intended to pay overtime even when they are resting or sleeping in their bunks. Construing the statute, the Court said:

As we understand this term, a laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he cease to work, may rest completely and leave or may leave at his will the spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be counted.

Because the parties had stipulated that Malondras rendered service beyond eight hours when required, and because his co-claimants under the same conditions were paid five overtime hours a day, the Court fixed his overtime at five hours daily.

On the second issue, the Court held that the subsistence allowance should not be deducted, since the stipulation showed it was independent of and had nothing to do with overtime compensation, and since Malondras' companions were paid without such deduction.

On the third issue, the Court held that the records must be reexamined to determine Malondras' exact daily wage from January 1954 to September 1954, and his overtime for those months computed on that basis.

Doctrine

Under Section 1 of the Eight-Hour Labor Law, the correct criterion in determining whether seamen are entitled to overtime pay is not whether they were on board and could not leave the ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of eight hours. Time spent on board but not working, during which the laborer may rest completely and leave the spot where he works at will, is not counted as work. Subsistence allowances given because the crew must stay aboard are independent of overtime compensation and are not deductible from it.

Disposition

The order appealed from was modified: Malondras was credited five overtime hours instead of sixteen hours a day, the Industrial Court was ordered to determine his exact daily wage from January 1954 to September 1954 and compute his overtime accordingly, and in all other respects the judgment was affirmed, without costs.

Remember This

The line to memorize is that for seamen, overtime means actual service beyond eight hours, not mere presence on board. Examiners use this case to test the "working place" concept under the Eight-Hour Labor Law and the non-deductibility of subsistence allowances from overtime pay.