Mercidar Fishing Corporation vs. NLRC & Fermin Agao, Jr.

G.R. No. 1112574

October 8, 1998

FACTS:
This case originated from a complaint filed on September 20, 1990 by private respondent FerminAgao, Jr.
against petitioner for illegal dismissal, violation of P.D. No. 851, and non-payment of five days service
incentive leave for 1990. Private respondent had been employed as a "bodegero" or ship's quartermaster
on February 12, 1988. He complained that he had been constructively dismissed by petitioner when the
latter refused him assignments aboard its boats after he had reported to work on May 28, 1990. Private
respondent alleged that he had been sick and thus allowed to go on leave without pay for one month from
April 28, 1990 but that when he reported to work at the end of such period with a health clearance, he
was told to come back another time as he could not be reinstated immediately. Thereafter, petitioner
refused to give him work. For this reason, private respondent asked for a certificate of employment from
petitioner on September 6, 1990. However, when he came back for the certificate on September 10,
petitioner refused to issue the certificate unless he submitted his resignation. Since private respondent
refused to submit such letter unless he was given separation pay, petitioner prevented him from entering
the premises. Petitioner, on the other hand, alleged that it was private respondent who actually
abandoned his work.

ISSUE:
Whether or not the fishing crew members are considered field personnel as classified in Art. 82 of the
Labor Code.

HELD:
Art. 82 of the Labor Code provides: The provisions of this title [Working Conditions and Rest Periods]
shall apply to employees in all establishments and undertakings whether for profit or not, but not to
government employees, field personnel, members of the family of the employer who are dependent on
him for support, domestic helpers, persons in the personal service of another, and workers who are paid
by results as determined by the Secretary of Labor in appropriate regulations. "Field personnel" shall
refer to non-agricultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. In contrast, in the case at bar, during the entire course of their
fishing voyage, fishermen employed by petitioner have no choice but to remain on board its vessel.
Although they perform non-agricultural work away from petitioner's business offices, the fact remains that
throughout the duration of their work they are under the effective control and supervision of petitioner
through the vessel's patron or master.
 Sime Darby v. NLRC (RL)
Topic: Management Prerogative; Change of Work Schedule
Relevant Provisions:

ART. 100 Prohibition Against Diminution or Elimination of Benefits.

G.R. No. 119205

April 15, 1998
Bellosillo, J.

Petitioners: Sime Darby Pilipinas, Inc.

Respondents: National Labor Relations Commission (2nd Division) and Sime Darby Salaried Employees
Association (ALU-TUCP)

SUMMARY:
Sime Darby Salaried Employees Association, an association of monthly salaried employees, filed a
complaint against Sime Darby Pilipinas. It alleged that the change in work schedule as well as the
removal of the 30-minute paid on call lunch break of the monthly salaried employees constitute unfair
labor practice and is discriminatory. The LA and the NLRC dismissed the complaint as this was a valid
exercise of management prerogative. Upon MR, the NLRC reversed its decision because it deprived the
workers of benefits resulting in an unjust diminution of company privileges. The SC held that the change
in work schedule is a valid exercise of management prerogative. It complies with the 8-hour work period
provided for in the Code and even gave the employees 1 full hour of break without interruption by the
employer. Further, it applied to all employees similarly situated. The SC also stated that so long as such
prerogative is exercised in good faith by the employer, the same will be upheld by the Courts.

FACTS:
Sime Darby Pilipinas, Inc. is engaged in the manufacture of automotive tires, tubes and other
rubber products.
Sime Darby Salaried Employees Association (ALU-TUCP) is an association of monthly salaried
employees of Sime Darby at its Marikina factory.
Prior to the present controversy, all company factory workers in Marikina including members of
private respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30 minute paid on call lunch
break.
On 14 August 1992, Sime Darby issued a memorandum to all factory-based employees advising
all its monthly salaried employees in its Marikina Tire Plant, except those in the
Warehouse and Quality Assurance Department working on shifts, a change in work
schedule effective 14 September 1992:
o 7:45 A.M. 4:45 P.M. (Monday to Friday)
o 7:45 A.M. 11:45 P.M. (Saturday).
o Coffee break time will be 10 mins only between: 9:30 A.M. 10:30 A.M. and 2:30 P.M.
3:30 P.M.
o Lunch break will be between: 12:00 NN 1:00 P.M. (Monday to Friday).
Since private respondent felt affected adversely by the change in the work schedule and
discontinuance of the 30-minute paid on call lunch break, it filed a complaint with the Labor
Arbiter for unfair labor practice, discrimination and evasion of liability.
The Labor Arbiter dismissed the complaint change in the work schedule and the elimination of
the 30-minute paid lunch break constituted a valid exercise of management prerogative and that
 the new work schedule did not have the effect of diminishing the benefits granted to factory
workers as the working time did not exceed eight (8) hours.
o It further held that the factory workers would be justly enriched if they continued to be
paid during their lunch break even if they were no longer on call.
o He also ruled that the decision in the earlier Sime Darby case was not applicable because
the former involved discrimination of certain employees who were not paid for their 30-
minute lunch break while the rest of the factory workers were paid.
The NLRC sustained the LAs decision.
Upon MR, with 2 new commissioners replacing those who earlier retired, reversed its earlier
decision.
o It considered the decision of this Court in the Sime Darby case of 1990 as the law of the
case wherein petitioner was ordered to pay the money value of these covered
employees deprived of lunch and/or working time breaks.
o The public respondent declared that the new work schedule deprived the employees of
the benefits of time-honored company practice of providing its employees a 30-minute
paid lunch break resulting in an unjust diminution of company privileges prohibited by Art.
100 of the Labor Code, as amended.
Hence this Petition.
The OSG commented that the memorandum, which contained the new work schedule, was not
discriminatory of the union members nor did it constitute unfair labor practice on the part of
petitioner.

ISSUE: W/N the act of management in revising the work schedule of its employees and discarding their
paid lunch break constitute unfair labor practiceNO. The right to fix work schedule rests primarily on the
employer.

HELD: Petition is GRANTED. The NLRC Decision (MR) is set aside. The LAs Decision is AFFIRMED.

RATIO:
The right to fix the work schedules of the employees rests principally on their employer. The new
work schedule fully complies with the daily work period of 8 hours without violating the Labor
Code.
Sime Darby reasons that the adjustment is for the efficient conduct of its business operations
and its improved production.
o While the old work schedule included a 30-minute paid lunch break, the employees could
be called upon to do jobs during that period as they were on call.
o Even if denominated as lunch break, it could be considered as working time because the
factory employees were required to work if necessary and were paid accordingly for
working.
The new work schedule gave the employees a one-hour lunch break without any
interruption from their employer.
o For a full one-hour undisturbed lunch break, the employees can freely and effectively use
this hour not only for eating but also for their rest and comfort which are conducive to
more efficiency and better performance in their work.
Since the employees are no longer required to work during this one-hour lunch break, there is no
more need for them to be compensated for this period.
Besides, the new schedule applies to all employees in the factory similarly situated
whether they are union members or not.
The ruling in the earlier Sime Darby case is not applicable in this case since the issue therein
involved a matter of granting lunch breaks to certain employees while depriving the other
employees of the same.
This case does not pertain to any controversy involving discrimination of employees but only the
issue of whether the change of work schedule, which management deems necessary to increase
production, constitutes unfair labor practice.
As shown by the records, the change effected by management is made to apply to all factory
employees engaged in the same line of work whether or not they are members of private
respondent union.
It cannot be said that the new scheme adopted by management prejudices the right of private
respondent to self-organization.

Employers are accorded the right to protect themselves and to exercise what are clearly
management prerogatives.
Every business enterprise endeavors to increase its profits. It may devise means to attain that
goal.
Thus, management is free to regulate, according to its own discretion and judgment, all aspects
of employment, including hiring, work assignments, working methods, time, place and manner
of work, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.
Management retains the prerogative, whenever exigencies of the service so require, to
change the working hours of its employees.
So long as such prerogative is exercised in good faith for the advancement of the employers
interest and not for the purpose of defeating or circumventing the rights of the employees
under special laws or under valid agreements, this Court will uphold such exercise.

PHILIPPINE AIRLINES, INC., Petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION, LABOR ARBITER ROMULUS PROTACIO and DR. HERMINIO A.
FABROS, Respondents.
GRN 132805 February 2, 1999
FACTS:
Private respondent was employed as flight surgeon at petitioner company. He was assigned at
the PAL Medical Clinic at Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight.

On February 17, 1994, at around 7:00pm, private respondent left the clinic to have his dinner at
his residence, which was about 5-minute drive away. A few minutes later, the clinic received an
emergency call from the PAL Cargo Services. One of its employees, Mr. Manuel Acosta, had suffered
a heart attack. The nurse on duty, Mr. Merlino Eusebio, called private respondent at home to inform
him of the emergency. The patient arrived at the clinic at 7:50pm and Mr. Eusebio immediately
rushed him to the hospital. When private respondent reached the clinic at around 7:51pm, Mr.
Eusebio had already left with the patient. Mr. Acosta died the following day.

Upon learning about the incident, PAL conducted an investigation. The Chief Flight Surgeon
required private respondent to explain why no disciplinary sanction should be taken against him.
 `Private respondent asserted that he was entitled to a 30-minute meal break; that he immediately
left his residence upon being informed by Mr. Eusebio about the emergency and he arrived at the
clinic a few minutes later; that Mr. Eusebio panicked and brought the patient to the hospital without
waiting for him. Finding private respondent's explanation unacceptable, the management charged
private respondent with abandonment of post while on duty. He was given ten days to submit a
written answer to the administrative charge. PAL decided to suspend private respondent for 3
months.
Private respondent filed a complaint for illegal suspension against petitioner. Labor Arbiter
rendered a decision declaring the suspension illegal and ordered petitioner to pay private respondent
the amount equivalent to all the benefits he should have received during his period of suspension
plus P500,000.00 moral damages. Petitioner appealed to the NLRC. The NLRC dismissed the
appeal. Hence, this petition.

ISSUE:
WON the suspension order was valid.

RULING:
1. No. public respondents did not err in nullifying the 3 month suspension of private respondent.
They, however, erred in awarding moral damages to private respondent.
The facts do not support, petitioner's allegation that private respondent abandoned his post on
the evening of February 17, 1994. Private respondent left the clinic that night only to have his dinner
at his house, which was only a few minutes' drive away from the clinic. His whereabouts were known
to the nurse on duty so that he could be easily reached in case of emergency. Upon being informed
of Mr. Acosta's condition, private respondent immediately left his home and returned to the clinic.
These facts belie petitioner's claim of abandonment.

Petitioner argues that being a full-time employee, private respondent is obliged to stay in the
company premises for not less than 8 hours. Hence, he may not leave the company premises during
such time, even to take his meals. This is not meritorious. It shall be the duty of every employer to
give his employees not less than 60 minutes time-off for their regular meals. Rest periods or coffee
breaks running from 5-20 minutes shall be considered as compensable working time.

Thus, the 8-hour work period does not include the meal break. Nowhere in the law may it be inferred
that employees must take their meals within the company premises. Employees are not prohibited
from going out of the premises as long as they return to their posts on time. Private respondent's act,
therefore, of going home to take his dinner does not constitute abandonment.

As to the grant of moral damages, not every employee who is illegally dismissed or suspended is
entitled to damages. As a rule, moral damages are recoverable only where the dismissal or
suspension of the employee was attended by bad faith fraud, or constituted an act oppressive to
labor, or was done in a manner contrary to morals, good customs or public policy. Bad faith does not
simply mean negligence or bad judgment. It involves a state of mind dominated by ill will or motive. It
implies a conscious and intentional design to do a wrongful act for a dishonest purpose or some
moral obliquity. The person claiming moral damages must prove the existence of bad faith by clear
and convincing evidence for the law always presumes good faith.

In the case at bar, there is no showing that the management of petitioner company was moved by
some evil motive in suspending private respondent. It suspended private respondent on an honest,
albeit erroneous, belief that private respondent's act of leaving the company premises to take his
meal at home constituted abandonment of post which warrants the penalty of suspension. Also,
petitioner gave private respondent all the opportunity to refute the charge against him and to defend
himself. These negate the existence of bad faith on the part of petitioner. Under the circumstances,
we hold that private respondent is not entitled to moral damages.
Petition is PARTIALLY GRANTED.