MANILA PORT SERVICE AND MANILA RAILROAD COMPANY, PETITIONERS, VS. COURT OF INDUSTRIAL RELATIONS AND ASSOCIATED WATERFRONT SUPERVISORS UNION (PTWO), RESPONDENTS.

Manila Port Service versus Court of Industrial Relations

The Case

This is a petition for review by writ of certiorari brought by the Manila Port Service and the Manila Railroad Company against the Court of Industrial Relations and the Associated Waterfront Supervisors Union, known as the PTWO. The Union had asked the Industrial Court to order the companies to pay its members overtime compensation for work rendered on Saturdays. The case matters because it fixes the rule on how the forty-hour weekly minimum under the law is computed, and it settles that Saturday is not, by force of law alone, a non-working day.

Procedural History

The Union filed its petition with the Court of Industrial Relations, and the companies answered, denying the material averments and setting up special affirmative defenses. After due hearing, the Industrial Court issued an order on the last day of March 1960, directing the companies to comply with Commonwealth Act Number 444 and Republic Act Number 1880 and to pay the listed members overtime compensation for work rendered from the first of July to the thirtieth of September 1957. The companies moved for reconsideration, and the Industrial Court, sitting en banc, denied the motion. The companies then came to the Supreme Court by petition for review by writ of certiorari.

Facts

On the tenth of December 1958, the Associated Waterfront Supervisors Union filed a petition against the Manila Port Service and the Manila Railroad Company for the recovery of overtime compensation for work rendered by its members on Saturdays, from the twenty-second of June 1957 to the thirtieth of September 1957, invoking Republic Act Number 1880 in conjunction with Commonwealth Act Number 444. The Union alleged that the companies' continued refusal to satisfy the claim had resulted in a labor dispute likely to cause a strike.

Earlier, on the seventeenth of July 1957, the companies and the Union had entered into a collective bargaining contract fixing the hours of labor from eight o'clock in the morning to twelve o'clock noon and from one o'clock to four o'clock in the afternoon, Monday to Friday, and from eight o'clock in the morning to one o'clock in the afternoon on Saturdays. The contract also provided that work beyond these hours would be paid overtime equivalent to one hundred fifty per cent of regular wages.

On the thirtieth of October 1957, the Board of Directors of the Manila Railroad Company adopted a resolution granting additional overtime pay, effective the first of October 1957, to Union members with fixed allowances who might be required to work on Saturdays. The Union contended that this benefit should be made to retroact to the first of July 1957, when Republic Act Number 1880 took effect, on the ground that the law and the implementing executive order had made Saturdays non-working days.

Issues

• Whether or not the Court of Industrial Relations had jurisdiction over the Union's claim for overtime compensation.
• Whether or not the Union's members are entitled to overtime compensation for work rendered on Saturdays from the first of July to the thirtieth of September 1957.
• Whether or not the resolution of the Manila Railroad Company granting overtime pay for Saturday work should be given retroactive effect.

Applicable Provisions

Section 562 of the Administrative Code, as amended by Republic Act Number 1880, provides:

SEC. 562. Legal hours of labor—minimum requirement.—The Chiefs of Bureau and Office in every branch of the Government service shall require of all employees of whatever grade or class not less than the legal number of hours of labor. Such hours, except for schools, courts, hospitals and health clinics, or where the exigencies of service so require, shall be as prescribed in the Civil Service Rules, and as otherwise from time to time disposed in temporary executive orders in the discretion of the President of the Philippines, but shall be eight (8) hours a day, for five (5) days a week, or a total of forty (40) hours a week, exclusive of time for lunch.

This is the basic statute applied to the case, and the Court reads it as fixing a weekly minimum of forty hours, not as declaring Saturday a holiday.

Presidential Executive Order Number 251, Series of 1957, implementing Republic Act Number 1880, provides:

The office hours of all bureaus and offices of the government including government owned and controlled corporations, but except schools, courts, hospitals, and health clinics, shall be from eight o'clock in the morning to twelve o'clock noon, and from one o'clock to five o'clock in the afternoon, Monday to Friday: Provided, That when the interests of the public service so require, the head of any department, bureau or office may extend the daily hours of labor for any or all of them to do overtime work not only on work days but also on holidays.

The Court relies on this order to show that neither the law nor the order declares Saturday a non-working day.

Ruling

On the first issue, the Court held that the Industrial Court had jurisdiction. It is now settled that whenever a claim for overtime compensation is made and there exists an employer and employee relationship between the claimant and the respondent, the case comes within the exclusive jurisdiction of the Court of Industrial Relations. The Court also maintained the rule that the existence of a labor dispute likely to cause a strike places the labor question within the proper cognizance of the Industrial Court.

On the second issue, the Court ruled for the companies. Under the legal provisions, office hours are eight hours a day for five days, Monday to Friday, or a total of forty hours a week, but neither the law nor the executive order declares Saturday a non-working day. That result is produced only if, during the five preceding days, the employees have worked the minimum of forty hours. Since under their contract the Union's members were called upon to work only seven hours a day, they worked only thirty-five hours from Monday to Friday, five hours less than the minimum prescribed by law. Logically, they could lawfully be required to work another five hours on Saturday; otherwise they would not be working forty hours per week.

The Court added that the law fixes work of eight hours a day for five days, or forty hours per week, as a minimum requirement, and the contract clearly recognizes that the laborers should work said number of hours, evidently because of the exigencies of the service. As to the Union's argument that its members in fact worked eight hours a day from Monday to Friday, as shown by the payroll, the Court answered that the last hour of each day was already paid for as overtime and cannot be counted toward the forty-hour weekly minimum. To require the companies to pay for the five hours of Saturday work on an overtime basis as well would be to declare that the Union's members are entitled to work only thirty-five hours a week, which plainly cannot be legally equivalent to a minimum of forty hours a week.

On the third issue, the Court held that the resolution of the Railroad Company dated the thirtieth of October 1957 granting overtime pay for Saturday work was a concession beyond the terms of the law, which cannot be extended beyond its words and intent, nor given retroactive effect without the company's consent.

The Court also addressed the reasoning of the Industrial Court, which had predicated its order on the fact that security guards were paid additional compensation for Saturday work while the Union's members were not, and viewed the difference as discriminatory. The Court found that no facts showed the number of hours actually rendered by the guards from Monday to Friday, or that their work was substantially the same as that of the Union's members; without such a showing of identical circumstances, the alleged discrimination was not substantiated. Besides, discrimination was not part of the original charge, nor is it material where unfair labor practice is not at issue.

Doctrine

The law fixes eight hours a day for five days, or forty hours a week, as a minimum requirement, and neither the law nor the implementing executive order declares Saturday a non-working day. Saturday becomes a non-working day only if the employee has already completed the forty-hour weekly minimum from Monday to Friday. Hours already paid as overtime cannot be counted toward that weekly minimum. A grant of overtime pay for Saturday work made by company resolution is a concession beyond the terms of the law, which cannot be extended beyond its words and intent nor given retroactive effect without the employer's consent. Finally, a claim for overtime compensation between an employer and employee falls within the exclusive jurisdiction of the Court of Industrial Relations, as does a labor dispute likely to cause a strike.

Disposition

The Court reversed the order of the Industrial Court and dismissed the claim for differential overtime pay, with costs against the Associated Waterfront Supervisors Union.

Remember This

The single line worth memorizing is that the forty-hour weekly minimum, not the calendar, makes Saturday a non-working day, and overtime already paid cannot be counted toward that minimum. Examiners like to use this case on the computation of the weekly minimum and on the jurisdiction of the Industrial Court over overtime claims.