PNB Vs PNB Employees Assn, 115 SCRA 507

56.
PNB vs PNB Employees Assn, 115 SCRA 507

- Waiver or quitclaim
FACTS
– PNB and PNB Employees Association (PEMA) had a dispute regarding the proper
computation of overtime pay. PEMA wanted the cost of living allowance (granted in
1958) and longevity pay (granted in 1961) to be included in the computation. PNB
disagreed and the 2 parties later went before the CIR to resolve the dispute.
– CIR decided in favor of PEMA and held that PNB should compute the overtime pay of
its employees on the basis of the sum total of the employee’s basic salary or wage plus
cost of living allowance and longevity pay. The CIR relied on the ruling in NAWASA v
NAWASA Consolidated Unions, which held that “for purposes of computing overtime
compensation, regular wage includes all payments which the parties have agreed shall
be received during the work week, including differentiated payments for working at
undesirable times, such as at night and the board and lodging customarily furnished the
employee.” This prompted PNB to appeal, hence this case.
ISSUE
WON the cost of living allowance and longevity pay should be included in the
computation of overtime pay as held by the CIR
HELD
NO
Ratio Overtime pay is for extra effort beyond that contemplated in the employment
contract; additional pay given for any other purpose cannot be included in the basis for
the computation of overtime pay.
– Absent a specific provision in the CBA, the bases for the computation of overtime pay
are 2 computations, namely:
1. WON the additional pay is for extra work done or service rendered
2. WON the same is intended to be permanent and regular, not contingent nor
temporary as a given only to remedy a situation which can change any time.
RULING
Reasoning
– Longevity pay cannot be included in the computation of overtime pay for the very
simple reason that the contrary is expressly stipulated in the CBA, which constitutes the
law between the parties.
– As regards cost of living allowance, there is nothing in Commonwealth Act 444 [or “the
8-hour Labor Law,” now Art. 87 Labor Code] that could justify PEMA’s posture that it
should be added to the regular wage in computing overtime pay. C.A. 444 prescribes
that overtime work shall be paid “at the same rate as their regular wages or salary, plus
at least 25% additional.” The law did not define what is a regular wage or salary. What
the law emphasized is that in addition to “regular wage,” there must be paid an
additional 25% of that “regular wage” to constitute overtime rate of pay. Parties were
thus allowed to agree on what shall be mutually considered regular pay from or upon
which a 25% premium shall be based and added to makeup overtime compensation.
– No rule of universal application to other cases may be justifiably extracted from the
NAWASA case. CIR relies on the part of the NAWASA decision where the SC cited
American decisions whose legislation on overtime is at variance with the law in this
jurisdiction. The US legislation considers work in excess of forty hours a week as
overtime; whereas, what is generally considered overtime in the Philippines is work in
excess of the regular 8 hours a day. It is understandably material to refer to precedents
in the US for purposes of computing weekly wages under a 40-hour week rule, since the
particular issue involved in NAWASA is the conversion of prior weekly regular earnings
into daily rates without allowing diminution or addition.
– To apply the NAWASA computation would require a different formula for each and
every employee. It would require reference to and continued use of individual earnings
in the past, thus multiplying the administrative difficulties of the Company. It would be
cumbersome and tedious a process to compute overtime pay and this may again cause
delays in payments, which in turn could lead to serious disputes. To apply this mode of
computation would retard and stifle the growth of unions themselves as Companies
would be irresistibly drawn into denying, new and additional fringe benefits, if not those
already existing, for fear of bloating their overhead expenses through overtime which,
by reason of being unfixed, becomes instead a veritable source of irritant in labor
relations.
**Overtime Pay Rationale Why is a laborer or employee who works beyond the regular
hours of work entitled to extra compensation called, in this enlightened time, overtime
pay?
Verily, there can be no other reason than that he is made to work longer than what is
commensurate with his agreed compensation for the statutorily fixed or voluntarily
agreed hours of labor he is supposed to do. When he thus spends additional time to his
work, the effect upon him is multi- faceted; he puts in more effort, physical and/or
mental; he is delayed in going home to his family to enjoy the comforts thereof; he might
have no time for relaxation, amusement or sports; he might miss important pre-arranged
engagements; etc. It is thus the additional work, labor or service employed and the
adverse effects just mentioned of his longer stay in his place of work that justify and are
the real reasons for the extra compensation that is called overtime pay.
**Overtime Pay Definition The additional pay for service or work rendered or performed
in excess of 8 hours a day by employees or laborers in employment covered by the 8
hour Labor Law [C.A. 444, now Art. 87 Labor Code] and not exempt from its
requirements. It is computed by multiplying the overtime hourly rate by the number of
hours worked in excess of eight.
Disposition decision appealed from is REVERSED

PNB Vs PNB Employees Assn, 115 SCRA 507

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56.

PNB vs PNB Employees Assn, 115 SCRA 507

Disposition decision appealed from is REVERSED

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