CONCERNED ORGANIZATION OF PASAR PROGRESSIVE EMPLOYEES FOR REFORM [COPPER], REPRESENTED BY ITS PRESIDENT, FEDERICO E. JERUSALEM, PETITIONER, VS. PHILIPPINE ASSOCIATED SMELTING AN…

Concerned Organization of Pasar Progressive Employees for Reform versus Philippine Associated Smelting and Refining Corporation

The Case

This is a labor case about what a worker is still owed on a day he is not supposed to work. The Concerned Organization of Pasar Progressive Employees for Reform, called COPPER, is the sole bargaining representative of the rank-and-file employees of the Philippine Associated Smelting and Refining Corporation, called PASAR. After a legal strike over a bargaining deadlock, COPPER demanded two things for its members: the rest day pay for two rest days that fell within the strike period, which PASAR had deducted from their salaries, and the Perfect Attendance Bonus under their collective bargaining agreement. The case matters because the Supreme Court draws a precise line: the principle of a fair day's wage for a fair day's labor governs pay given in consideration of work done, but not benefits given for mere attendance or for a day of rest, and a justified absence does not forfeit them. It also reminds us that a union can waive a demand, and that a waiver, once made, is binding.

Procedural History

COPPER brought its claims to voluntary arbitration before the Voluntary Arbitrator of the National Conciliation and Mediation Board, Regional Office Number Eight, in Tacloban City. The Voluntary Arbitrator dismissed the complaint in a decision dated May 10, 2021. COPPER then filed a petition for review with the Court of Appeals, which denied the petition and affirmed the Voluntary Arbitrator in a decision dated February 23, 2023, and later denied reconsideration in a resolution dated September 14, 2023. COPPER elevated the matter to the Supreme Court through a petition for review on certiorari under Rule 45 of the Rules of Court.

Facts

COPPER and PASAR failed to reach agreement on their collective bargaining agreement for the years 2017 to 2022. Because of that bargaining deadlock, COPPER staged a strike from August 3 to August 18, 2020. On August 19, 2020, the day after the strike ended, the parties executed a Memorandum of Agreement settling their dispute. In it, the parties agreed that the agreement would finally settle any and all issues raised during the CBA negotiations and in the notice of strike, and that all other claims and demands of the union, and all issues raised in the negotiations and conciliation-mediation conferences that were not approved by PASAR, were deemed withdrawn and waived by the union.

When the covered employees received their pay slips for September 2020, they discovered that their rest day pay for two days during the strike had been deducted from their salaries. The union president, Federico Jerusalem, invited PASAR's grievance panel to a meeting to demand the two-day rest day pay and the Perfect Attendance Bonus for the period November 1, 2019 to October 31, 2020. PASAR refused, arguing that the employees did not raise these matters to their immediate superior within five working days from their occurrence, so the grievance was deemed waived.

COPPER sought the assistance of the National Conciliation and Mediation Board, which conducted mediation meetings, but the parties still failed to agree. The issues were then submitted for voluntary arbitration. Before the Voluntary Arbitrator, PASAR also argued that the claim for Perfect Attendance Bonus had already been waived in the Memorandum of Agreement, pointing out that COPPER had proposed a provision stating that members who joined the strike would not be considered absent and would remain entitled to all CBA benefits, and that PASAR rejected this proposal, so it did not appear in the final agreement.

Issues

• Whether or not the covered employees are entitled to rest day pay for the two rest days falling within the period of the strike, despite their absence from work during the six working days prior to those rest days.
• Whether or not the covered employees are entitled to the Perfect Attendance Bonus despite their absence from work during the legal strike.
• Whether or not the covered employees waived their right to the Perfect Attendance Bonus through the Memorandum of Agreement.

Applicable Provisions

Article 6 of the Civil Code of the Philippines provides:

Article 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law.

This is the basis for holding that the union validly waived the Perfect Attendance Bonus demand when it signed the Memorandum of Agreement.

Article 91 of the Labor Code provides:

ARTICLE 91. Right to Weekly Rest Day. — (a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than 24 consecutive hours after every six consecutive normal work days. (b) The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds.

This shows that the rest day is a mandated day of rest, not a day of work, so rest day pay is not compensation for services rendered.

Article 93 of the Labor Code provides:

ARTICLE 93. Compensation for Rest Day, Sunday or Holiday Work. — (a) Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least 30% of his regular wage.

This confirms that extra pay attaches only when the employee chooses to work on a rest day; if he does not work, he still receives his regular rest day pay under the CBA.

Article XIII, Section 3 of the 1987 Constitution provides:

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law.

This anchors the ruling that attendance in a legal strike is a justified absence that cannot disqualify an employee from the Perfect Attendance Bonus.

Ruling

On the first issue, the Court ruled in favor of the employees. The principle of a fair day's wage for a fair day's labor applies only to compensation paid in consideration of work done or services rendered. Rest day pay is not such compensation, because on a rest day the employee is not supposed to work at all. The CBA provision is clear and unconditional:

Section 3. REST DAY. The COMPANY agrees to grant all its employees within the bargaining unit a scheduled one day rest day with pay every week.

The Court held that this does not require six days of attendance in a week; had the parties intended that condition, they could have written it into the CBA. Neither the Labor Code nor the CBA provides for forfeiture of rest day pay because of absence during the work week, more so when the absence is justified. The employees already bear the consequence of their absence, since they receive no wages for the working days they did not work.

On the second issue, the Court also ruled for the employees. The Perfect Attendance Bonus is granted in consideration of mere attendance, not work done. Justified absences do not affect entitlement. The CBA itself implies this, since employees are disqualified only for invalid sick leave or leave without pay, which means valid sick leave and leave with pay do not disqualify them. Attendance in a legal strike, a constitutional right, is an even stronger reason not to disqualify them. The strike arose from a bargaining deadlock, and there was no allegation or proof that it was illegal.

On the third issue, however, the Court ruled for PASAR. Rights under a contract may be validly waived under Article 6 of the Civil Code, provided there is a right, knowledge of it, and an intention to relinquish it, and the waiver is couched in clear and unequivocal terms. COPPER had raised the Perfect Attendance Bonus during negotiations by proposing that strikers not be considered absent and remain entitled to all CBA benefits. PASAR rejected that proposal, and the Memorandum of Agreement deemed withdrawn and waived all issues not approved by PASAR. The waiver was therefore valid.

Doctrine

The principle of a fair day's wage for a fair day's labor, or no work no pay, applies only to compensation and benefits paid in consideration of work done or services rendered. Where a benefit is paid not for work done but for mere attendance or for a day of rest, the employee remains entitled to it even if absent, provided the absence is justifiable. Rest day pay under a CBA is unconditional and is not forfeited by absence during the preceding work week, since the employee already loses wages for the days not worked. A legal strike grounded on a bargaining deadlock is a justified absence and does not disqualify an employee from a Perfect Attendance Bonus. Finally, under Article 6 of the Civil Code, a union may validly waive a CBA demand, and a waiver couched in clear and unequivocal terms, made with knowledge of the right, binds the union and its members.

Disposition

The petition was partly granted. The Court affirmed the Court of Appeals with modification, ordering PASAR to pay the covered employees their rest day pay for two days within the strike period, with legal interest of six percent per annum from finality of the decision until full satisfaction, and remanded the case to the Voluntary Arbitrator for computation of the total monetary award.

Remember This

Memorize this line: a fair day's wage for a fair day's labor covers only pay for work done, so rest day pay and attendance-based bonuses survive a justified absence such as a legal strike. Examiners use this case to test the no work no pay principle against unconditional CBA benefits, and to test the requisites of a valid waiver of a union demand.