[01] Manila Terminal Co. v.

CIR
G.R. No. L-4148 | July 16, 1952| Hours of work | Sha
apprehensive in asserting any claim which may cause the employer to devise a
Petitioner: MANILA TERMINAL COMPANY, INC way for exercising his right to terminate the employment.
Respondents: THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL
RELIEF AND MUTUAL AID ASSOCIATION If the principle of estoppel and laches is to be applied, it may bring about a
situation, whereby the employee or laborer, who cannot expressly renounce their
right to extra compensation under the Eight-Hour Labor Law, may be compelled to
Recit-Ready Facts:
accomplish the same thing by mere silence or lapse of time, thereby frustrating the
purpose of law by indirection.
Manila Terminal employed some 30 watchmen for 12-hour shifts. Despite working for 12 hours
a day, no overtime pay was afforded to the watchmen, thus compelling them to file an action for
money claims before the DOLE. Manila Terminal thereafter reduced the shifts into an 8-hour FACTS: (disclaimer: medj magulo yung case for me huhu )
shifts. A petition was also filed before the CIR for the money claims. The CIR rendered a
decision in favor of the watchmen.
1. Manila Terminal Company, Inc. (petitioner) undertook the arrastre service in
WON agreement under which its police force were paid certain specific wages for some of the piers in Manila's Port Area at the request and under the control
of the US Army.
twelve-hour shifts, included overtime compensation (NO)
a. It hired some 30 men as watchmen on 12-hour shifts at a
compensation of P3 per day for the day shift and P6 per day for the
The Manila Terminal argued that the daily wage included the overtime compensation. However,
night shift.
the record does not bear out these allegations. Manila Terminal has relied merely on the facts
2. Manila Terminal began the postwar operation of the arrastre service at the
that its watchmen had worked on 12-hour shifts at specific wages per day and that, initially, no request and under the control of the Bureau of Customs.
complaint was made about the matter.
3. Several member of the Manila Terminal Relief and Mutual Aid Association,
sent a letter to the Department of Labor, requesting that the matter of
After the petition had instituted the strict eight-hour shifts, no reduction was made overtime pay be investigated, but nothing was done by the Department.
in the salaries which its watchmen received under the twelve hour arrangement. 4. Manila Terminal instituted the system of strict 8-hour shifts.
Although it may be argued that the salary for the night shift was somewhat 5. The Manila Terminal Relief and Mutual Aid Association (Association) was
lessened, the fact that the rate for the day shift was increased in a sense tends to organized, having been granted certificate by the Department of Labor.
militate against the contention that the salaries given during the twelve-hour a. The association filed an amended petition with the CIR praying that the
shifts included overtime compensation. Manila Terminal be ordered to pay its watchmen or police force
overtime pay from the commencement of their employment.
WON the Association is barred from recovery by estoppel and laches (NO) 6. By virtue of Customs Administrative Order No. 81 and E.O. No. 228, the
entire police force of the petitioner was consolidated with the Manila Harvor
Manila Terminal argued that the watchmen are now estopped from claiming their overtime pay Police of the Customs Patrol Service.
since they did not demand nor act upon it for 18 months. By reason of the watchmen’s inaction, 7. CIR: ordered Manila Terminal to pay to its police force
Manila Terminal is arguing that the watchmen waived their rights to the overtime pay. a. Regular or base pay corresponding to four hours' overtime plus 25% as
additional overtime compensation for the period from September 1,
In the first place, it would be contrary to the spirit of the Eight Hour Labor Law, 1945 to May 24, 1947;
under which as already seen, the laborers cannot waive their right to extra b. Additional compensation of 25% to those who worked from 6:00 p.m.
compensation. In the second place, the law principally obligates the employer to to 6:00 a.m. during the same period;
observe it, so much so that it punishes the employer for its violation and leaves c. Additional compensation of 50% for work performed on Sundays and
the employee or laborer free and blameless. In the third place, the employee or legal holidays during the same period;
laborer is in such a disadvantageous position as to be naturally reluctant or even
 d. Additional compensation of 50% for work performed on Sundays and The record does not bear out these allegations. The petitioner has relied merely
legal holidays from May 24, 1947 to May 9, 1949; and on the facts that its watchmen had worked on twelve-hour shifts at specific
e. Additional compensation of 25% for work performed at night from May wages per day and that no complaint was made about the matter until, first on
29, 1947 to May 9, 1949. March 28, 1947 and, secondly, on April 29, 1947.
8. The petitioner and the association filed a MR. This was denied.
9. With respect to overtime compensation, Judge Lanting ruled: In times of acute unemployment, the people, urged by the instinct of self-
a. The decision under review should be affirmed in so far it grants preservation, go from place to place and from office to office in search for any
compensation for overtime on regular days (not Sunday and employment, regardless of its terms and conditions, their main concern in the
legal holidays)during the period from the date of entrance to first place being admission to some work. Specially for positions requiring no
duty to May 24, 1947, such compensation to consists of the special qualifications, applicants would be good as rejected if they ever try to be
amount corresponding to the four hours' overtime at the regular inquisitive about the hours of work or the amount of salary, ever attempt to
rate and an additional amount of 25% dictate their terms. The petitioner's watchmen must have railroaded themselves
b. As to the compensation for work on Sundays and legal holidays, into their employment, so to speak, happy in the thought that they would then
the petitioner should pay the compensation that corresponds to have an income on which to subsist.
the overtime (in excess of 8 hours) at the regular rate only, that
is, without any additional amount As was aptly said in Floyd vs. Du Bois Soap Co., "A contract of employment, which
c. The watchmen are not entitled to night differential pay for past provides for a weekly wage for a specified number of hours, sufficient to cover
services both the statutory minimum wage and overtime compensation, if computed on
the basis of the statutory minimum wage, and which makes no provision for a
ISSUES: fixed hourly rate or that the weekly wage includes overtime compensation, does
not meet the requirements of the Act."
1. WON agreement under which its police force were paid certain specific
wages for twelve-hour shifts, included overtime compensation (NO) Moreover, we note that after the petition had instituted the strict eight-hour shifts,
2. WON the Association is barred from recovery by estoppel and laches no reduction was made in the salaries which its watchmen received under the
(NO) twelve hour arrangement. Although it may be argued that the salary for the night
shift was somewhat lessened, the fact that the rate for the day shift was
3. WON the nullity or invalidity of the employment contract precludes any
increased in a sense tends to militate against the contention that the salaries
recovery by the Association (NO)
given during the twelve-hour shifts included overtime compensation.
4. WON Commonwealth Act No. 4444 does not authorize recovery of back
overtime pay. In  Detective & Protective Bureau, Inc. vs., in which the facts were as follows:
"XXXX The employment called for daily tours of duty for more than eight hours,
RATIO: in addition to work on Sundays and holidays. Nonetheless the members
performed their labors without receiving extra compensation." In the case, the SC
(IMPT) THE AGREEMENT WITH THE WATCHMEN DID NOT INCLUDE held:
OVERTIME COMPENSATION- They are not barred by estoppel & laches.
It appears that the Bureau had been granting the members of the
The important point stressed by the petitioner is that the contract between it and Association, every month, "two days off" days in which they rendered
the Association upon the commencement of the employment of its watchman no service, although they received salary for the whole month. Said
was to the certain rates of pay, including overtime compensation namely, P3 per Bureau contended below that the pay corresponding to said 2 day
day for the day shift and P6 per day for night shift beginning September 1, 1945, vacation corresponded to the wages for extra work. The court rejected
and P4 per day shift and P6.25 per day for the night shift since February, 1946. the contention, quite properly we believe, because in the contract there
was no agreement to that effect; and such agreement, if any, would
 probably be contrary to the provisions of the Eight-Hour Law and from liability for extra compensation. This conclusion is further supported by the
would be null and void ab initio. fact that the law makes only the employer criminally liable for any violation. It
cannot be pretended that, for the employer to commit any violation of the Eight-
In the first place, it would be contrary to the spirit of the Eight Hour Labor Law, Hour Labor Law, the participation or acquiescence of the employee or laborer is
under which as already seen, the laborers cannot waive their right to extra indispensable, because the latter in view of his need and desire to live, cannot be
compensation. In the second place, the law principally obligates the employer to considered as being on the same level with the employer when it comes to the
observe it, so much so that it punishes the employer for its violation and leaves question of applying for and accepting an employment.
the employee or laborer free and blameless. In the third place, the employee or
laborer is in such a disadvantageous position as to be naturally reluctant or Sections 3 and 5 of Commonwealth Act 444 expressly provides for the payment
even apprehensive in asserting any claim which may cause the employer to of extra compensation in cases where overtime services are required, with the
devise a way for exercising his right to terminate the employment. result that the employees or laborers are entitled to collect such extra
compensation for past overtime work. To hold otherwise would be to allow an
If the principle of estoppel and laches is to be applied, it may bring about a employer to violate the law by simply, as in this case, failing to provide for and
situation, whereby the employee or laborer, who cannot expressly renounce their pay overtime compensation.
right to extra compensation under the Eight-Hour Labor Law, may be compelled
to accomplish the same thing by mere silence or lapse of time, thereby It is high time that all employers were warned that the public is interested in the
frustrating the purpose of law by indirection. strict enforcement of the Eight-Hour Labor Law. This was designed not only to
safeguard the health and welfare of the laborer or employee, but in a way to
The nullity or invalidity of the employment contract does not preclude recovery minimize unemployment by forcing employers, in cases where more than 8-hour
by the association of any overtime pay. operation is necessary, to utilize different shifts of laborers or employees
working only for eight hours each.
The argument, based on the supposition that the parties are in  pari delicto, was in
effect turned down in Gotamo Lumber Co. vs. CIR wherein we ruled: "The
petitioner maintains that as the overtime work had been performed without a Disposition of the Court
permit from the Department of Labor, no extra compensation should be
authorized. Several decisions of this court are involved. But those decisions were Wherefore, the appealed decision, in the form voted by Judge Lanting, is
based on the reasoning that as both the laborer and employer were duty bound affirmed, it being understood that the petitioner's watchmen will be entitled to
to secure the permit from the Department of Labor, both were in pari delicto. extra compensation only from the dates they respectively entered the service of
However the present law in effect imposed that duty upon the employer (C.A. the petitioner, hereafter to be duly determined by the Court of Industrial
No. 444). Such employer may not therefore be heard to plead his own neglect as Relations. So ordered, without costs.
exemption or defense.

The employee in rendering extra service at the request of his employer

Moreover, the Eight-Hour Law, in providing that "any agreement or contract